Metro Inc. is reporting strong revenue and profit growth in its fourth quarter as the grocery company benefited from improvements at its own operations as well as its investment in Alimentation Couche-Tard Inc..
Its net income was up 75.9 per cent compared with the same time last year, rising to $145.1-million or $1.46 per share from $84.4-million or 83 cents per share.
Part of that increase was due to Metro's investment in Couche-Tard, a Montreal-area company that operates convenience stores and gas bars in Canada, the United States and northern Europe.
Couche-Tard contributed $25-million to Metro's net profit in the quarter.
Metro's adjusted net earnings after excluding a one-time item from Couche-Tard were up 27.8 per cent to $123.4-million or $1.24 per share from $98.9-million or 97 cents per share.
That was six cents a share better than a consensus estimate compiled by Thomson Reuters.
"We are very pleased with our strong fourth quarter and fiscal 2012 performance, resulting from our team's excellent execution, effective cost control, and sustained investments in our network. While we expect competitive activity will remain strong in 2013, we will continue(2) to emphasize our customer first strategies to driveour future growth," stated Eric R. La Fleche, President and Chief Executive Officer.
In the fourth quarter last year, Metro's adjusted net earnings included $14.5-million or 14 cents per share of costs associated with closures.
Metro's overall sales in the 13 weeks ended Sept. 29 were up 11.1 per cent to $2.9-billion, while same-store sales from locations open at least a year were up 1.1 per cent.
Analysts had expected metro's adjusted earnings to increase to $1.18 per share on $2.88-billion of revenues in the fourth quarter of its fiscal year, according to analysts polled by Thomson Reuters.
Metro was deemed to have sold some of its shares when Couche-Tard issued more stock. Metro actually kept its shares but allowed its share of Couche-Tard fall slightly to 11.6 per cent from 11.1 per cent.
The supermarket chain is selling its Distagro foodservice division, which supplies restaurants and gas station convenience stores, to Sysco Canada for an undisclosed price.
The transaction is slated to close in mid-December and will see 140 employees at its warehouse in Boucherville, Que., transferred to the subsidiary of Sysco Corp.
Metro will retain its warehouse in St-Jean-Port-Jolie, Que., which employs less than 100 people and provides food to a series of small convenience and grocery store banners.
It has rolled out its new "fresh" food program in an attempt to boost sales.
Metro is Quebec's leading grocery chain with nearly 34 per cent market share. It has more than 65,000 employees in Quebec and Ontario.
The Montreal-based company operates a network of close to 600 food stores under several banners including Metro, Metro Plus, GP, Super C and Food Basics, as well as over 250 drugstores under the Brunet, Brunet Plus, Clini Plus, The Pharmacy and Drug Basics banners.