Metro (TSE:MRU) Issues Quarterly Earnings Results

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

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 Trading Down 0.1%

Shares of MRU traded down C$0.10 during mid-day trading on Wednesday, reaching C$92.83. 184,203 shares of the company were exchanged, compared to its average volume of 440,024. The stock has a market capitalization of C$19.84 billion, a PE ratio of 20.05, a PEG ratio of 4.06 and a beta of 0.11. The business has a 50 day simple moving average of C$98.85 and a two-hundred day simple moving average of C$98.27. The company has a debt-to-equity ratio of 62.29, a quick ratio of 0.41 and a current ratio of 1.35. Metro has a 52 week low of C$89.13 and a 52 week high of C$109.20.

Analysts Set New Price Targets

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

Metro Company Profile

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.