Metro Q4 Sales Decline, Profit Increases


Metro (MRU) reported higher profits despite lower sales in the fourth quarter of 2021 than a year earlier.

Last year’s sales were fueled by shoppers stocking up for the pandemic. The food and pharmacy retailer owns banners including Metro, Super C, and Food Basics. (See Insiders’ Hot Stocks on TipRanks)

Sales & Earnings

Sales came in at C$4.09 billion for the quarter ended September 25, a decrease of 1.2% from C$4.14 billion in the prior-year quarter. In addition, food same-store sales decreased by 2.9%, while pharmacy same-store sales increased by 4.1%.

Q4 2021 profit was C$194 million (C$0.79 per diluted share), compared to a profit of C$186.5 million (C$0.74 per share) in Q4 2020.

On an adjusted basis, Metro earned C$200.6 million (C$0.81 per diluted share) for the quarter, compared to adjusted earnings of C$193.1 million (C$0.77 per diluted share) a year ago. COVID-19 spending totaled C$9 million in the fourth quarter, down from C$27 million in the same quarter last year.

For the fiscal year ended September 25, Metro’s net earnings reached C$825.7 million (C$3.33 per share), compared to C$796.4 million (C$3.14 per share) in 2020. Sales increased 1.6% to C$18.28 billion.

CEO Commentary

Metro president and CEO Eric La Flèche said, “We ended the 2021 fiscal year on a strong note with net earnings growth in the fourth quarter, despite lower sales as we cycled exceptional sales last year. As government restrictions eased over the summer, a portion of food consumption transferred back to restaurants however, our food sales continue to compare favourably to pre-pandemic levels.

“We continue to invest in the modernization of our supply chain, our network of stores, and our omnichannel strategy, with a record level of capital expenditures this year. I want to thank all our colleagues for their unwavering daily commitment to serve our customers during the pandemic while also successfully executing on our long-term strategic priorities.”

Wall Street’s Take

TD Securities analyst Michael Van Aelst recently maintained a Hold rating on MRU with a price target of C$70. This implies 7% upside potential.

The rest of the Street has given a Moderate Buy rating on MRU based on two Buys and three Holds. The average Metro price target of C$69 implies 5.5% upside potential to current levels.

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