Metro (TSE:MRU) Posts Earnings Results

Metro (TSE:MRU) posted its quarterly earnings results on Tuesday. The company reported C$1.16 earnings per share (EPS) for the quarter, FiscalAI reports. The business had revenue of C$5.29 billion during the quarter. Metro had a net margin of 4.50% and a return on equity of 13.80%.

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

• Temporary shutdown of the Toronto frozen distribution center is fully resolved, but the company incurred CAD 21.6M pre?tax (CAD 15.9M post?tax) of direct costs which were adjusted out of results and were covered by a contingency plan that secured store supply.
• Reported Q1 sales were CAD 5.3B (+3.3% YoY), with Adjusted EBITDA of CAD 504.2M (+4.7% YoY) and adjusted EPS of CAD 1.16 (+5.5% YoY) after excluding the freezer costs.
• Management flagged persistent food inflation—notably in meat—and sustained promo/discount competition that is pressuring margins and forcing tougher supplier negotiations.
• The company plans ~CAD 550M in F26 CapEx, expects about a dozen discount store openings (including conversions), and reported online sales growth of 25.8%, supporting growth and omnichannel expansion.
• Shareholder returns were boosted as the board raised the quarterly dividend by 10.1% to CAD 0.4075 per share and repurchased 1 million shares for CAD 98.7M, with management open to gradual, prudent higher leverage to fund buybacks.

Metro Stock Performance

Shares of MRU traded down C$0.24 during trading hours on Wednesday, reaching C$92.69. 212,771 shares of the company traded hands, compared to its average volume of 443,980. The stock has a market capitalization of C$19.81 billion, a P/E ratio of 20.02, a P/E/G ratio of 4.06 and a beta of 0.11. The company has a quick ratio of 0.41, a current ratio of 1.35 and a debt-to-equity ratio of 62.29. The business has a fifty day moving average price of C$98.85 and a 200-day moving average price of C$98.27. Metro has a 12-month low of C$89.13 and a 12-month high of C$109.20.

Wall Street Analysts Forecast Growth

MRU has been the subject of a number of research analyst reports. Scotiabank lifted their target price on shares of Metro from C$108.00 to C$110.00 and gave the stock an “outperform” rating in a research report on Thursday, November 20th. Desjardins set a C$105.00 target price on Metro and gave the stock a “hold” rating in a research report on Thursday, November 20th. Royal Bank Of Canada boosted their price target on shares of Metro from C$112.00 to C$113.00 and gave the stock a “sector perform” rating in a research report on Friday, January 23rd. BMO Capital Markets decreased their target price on shares of Metro from C$115.00 to C$110.00 in a research report on Monday, November 3rd. Finally, National Bankshares set a C$107.00 price objective on Metro and gave the company an “outperform” rating in a research report on Monday, January 19th. Four research analysts have rated the stock with a Buy rating and two have issued a Hold rating to the company. According to data from MarketBeat, Metro currently has an average rating of “Moderate Buy” and a consensus target price of C$109.25.

About Metro

Metro is one of the largest grocery retailers in Canada. With its 2018 acquisition of Jean Coutu, it also boasts a meaningful drugstore footprint. Noteworthy grocery banners include Metro, Metro Plus, Super C, and Food Basics, while its pharmacies primarily operate under the Jean Coutu and Brunet trademarks. It utilizes an array of business models, but it most frequently acts as either a retailer, operating individual stores, or a franchiser, licensing its trademarks and supplying merchandise to franchisees.