Metro (TSE:MRU) Announces Earnings Results

Metro (TSE:MRU) announced its earnings results on Wednesday. The company reported C$1.24 earnings per share (EPS) for the quarter, FiscalAI reports. The business had revenue of C$6.97 billion for the quarter. Metro had a net margin of 4.52% and a return on equity of 14.38%.

Here are the key takeaways from Metro’s conference call:

• The Quebec produce-distribution-center strike materially weakened Q3 results: adjusted EBITDA fell 11.3% and adjusted EPS declined 18.4% to CAD 1.24, including an estimated CAD 90 million profit impact or CAD 0.32 per share. Food same-store sales remained down 1.5% after four weeks of Q4, and management expects significant continued pressure while the strike persists.
• Pharmacy remained a key source of strength, with same-store sales up 4.8%, prescription sales up 6.4%, and total pharmacy sales up 5%. Management expects the GLP-1 category to deliver low-teen contribution-dollar growth despite price deflation from generic semaglutide.
• Metro will convert 10 Ontario Metro stores to Food Basics and expects improved store contribution beginning in fiscal 2027. The company also plans to close its Montreal dark store and shift to store-based fulfillment with third-party delivery, which should expand same-day capacity and reduce fixed costs.
• The network initiatives generated CAD 42.6 million of after-tax restructuring and impairment charges in Q3, but are expected to produce CAD 15 million in recurring annual after-tax earnings by the end of fiscal 2028. Metro also expects CAD 90 million in proceeds from selling Première Moisson’s bakery manufacturing facility while retaining the brand and bakery-store network.

Metro Price Performance

Shares of MRU stock opened at C$89.98 on Thursday. The stock’s fifty day simple moving average is C$92.23 and its 200 day simple moving average is C$92.91. Metro has a one year low of C$86.63 and a one year high of C$104.06. The firm has a market cap of C$18.98 billion, a price-to-earnings ratio of 19.19, a P/E/G ratio of 4.06 and a beta of 0.18. The company has a debt-to-equity ratio of 69.30, a current ratio of 1.43 and a quick ratio of 0.41.

Analyst Ratings Changes

A number of analysts have weighed in on the stock. TD Securities raised shares of Metro to a “strong-buy” rating in a report on Wednesday, July 29th. Desjardins dropped their price objective on shares of Metro from C$99.00 to C$97.00 and set a “hold” rating on the stock in a report on Thursday, April 23rd. Canadian Imperial Bank of Commerce cut their price objective on shares of Metro from C$101.00 to C$97.00 and set a “neutral” rating for the company in a research report on Thursday, April 23rd. BMO Capital Markets cut shares of Metro from an “outperform” rating to a “hold” rating and reduced their target price for the company from C$105.00 to C$95.00 in a research note on Monday, July 20th. Finally, Scotia decreased their target price on Metro from C$103.00 to C$96.00 and set a “sector perform” rating on the stock in a research report on Thursday, April 23rd. One research analyst has rated the stock with a Strong Buy rating and seven have assigned a Hold rating to the company. According to data from MarketBeat.com, the stock has an average rating of “Hold” and a consensus target price of C$102.38.

Metro Company Profile

With annual sales of more than $22 billion, METRO Inc is a food and pharmacy leader in Québec and Ontario, providing employment to more than 97,000 people. Its purpose is to Nourish the health and well-being of our communities. As a retailer, franchisor, distributor, manufacturer, and provider of eCommerce services, the company operates or services a network of some 1,000 food stores under several banners including Metro, Metro Plus, Super C, Food Basics, Adonis and Première Moisson, and some 640 pharmacies primarily under the Jean Coutu, Brunet, Metro Pharmacy and Food Basics Pharmacy banners.