Metro (TSE:MRU) Issues Earnings Results

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

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 Trading Down 0.8%

Shares of TSE MRU traded down C$0.69 during midday trading on Friday, hitting C$88.80. The stock had a trading volume of 100,514 shares, compared to its average volume of 532,171. Metro has a 1-year low of C$86.63 and a 1-year high of C$102.71. The company has a fifty day moving average price of C$92.24 and a 200 day moving average price of C$92.84. The company has a quick ratio of 0.41, a current ratio of 1.43 and a debt-to-equity ratio of 69.30. The company has a market capitalization of C$18.73 billion, a price-to-earnings ratio of 18.93, a PEG ratio of 4.06 and a beta of 0.18.

Wall Street Analysts Forecast Growth

A number of research firms have recently weighed in on MRU. Royal Bank Of Canada cut their price target on Metro from C$111.00 to C$110.00 and set a “sector perform” rating for the company in a report on Thursday. BMO Capital Markets lowered shares of Metro from an “outperform” rating to a “hold” rating and cut their price objective for the company from C$105.00 to C$95.00 in a research report on Monday, July 20th. TD boosted their price target on Metro from C$106.00 to C$108.00 and gave the company a “buy” rating in a report on Thursday. TD Securities upgraded Metro to a “strong-buy” rating in a report on Wednesday, July 29th. Finally, National Bank Financial reduced their target price on Metro from C$105.00 to C$102.00 and set a “sector perform” rating on the stock in a research report on Thursday. One equities research analyst has rated the stock with a Strong Buy rating, one has given a Buy rating and seven have given a Hold rating to the company’s stock. According to data from MarketBeat.com, Metro presently has a consensus rating of “Hold” and an average target price of C$102.33.

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.