Metro Inc. Raises Dividend, Q1 Profit Down

Grocery and drugstore retailer Metro Inc. raised its dividend as it reported its first-quarter profit fell compared with a year ago, weighed down by costs related to the temporary closure of its frozen food distribution centre in Toronto.

The company says it will pay a quarterly dividend of 40.75 cents per share, up from 37 cents per share.

The increased payment to shareholders came as Metro says it earned $226.3 million or $1.05 per diluted share for the 12-week period ended Dec. 20, compared with a profit of $259.5 million or $1.16 per diluted share in the same quarter a year earlier.

On an adjusted basis, Metro says it earned $1.16 per diluted share for the quarter, up from $1.10 per diluted share.

“We delivered sales and earnings per share growth in a challenging operating environment, marked by the temporary closure of our freezer in Toronto and persistent food inflation,” Metro chief executive Eric La Flèche said in a statement.

“We are pleased with our new discount store openings and our growing market share in a very competitive market.”

Metro was forced to stop work at its Toronto frozen food distribution centre on Sept. 12 due to an issue with its refrigeration system and resumed operations on Nov. 10.

In its outlook, the company said the challenges related to the disruption at the frozen distribution centre are now behind it.

Metro said its focus is on realizing efficiency gains throughout its supply chain and store network while it continues its plan to accelerate the development of its discount banners with the planned opening of about a dozen new or converted stores in this financial year.

Sales for the quarter totalled $5.29 billion, up from $5.12 billion a year earlier.

The increase came as food same-store sales were up 1.6 per cent, while pharmacy same-store sales rose 3.9 per cent with a 5.1 per cent increase in prescription drugs and a 1.3 per cent increase in front-store sales.

Metro said sales were negatively impacted by the transfer of one significant pre-Christmas shopping day to the second quarter this year and by the temporary shutdown of the frozen food distribution centre.

Adjusting for the Christmas shift, Metro says same-store food sales were up 1.9 per cent, while pharmacy front-store sales were up 1.7 per cent.