Metro on pace for historic financial year

Despite a worker strike that forced the closure of 27 stores in the Toronto area, Metro is producing one of its best fiscal years in history.

For the first time ever, Metro sales have exceeded $20 billion, a 9.7% increase year-over-year, and net earnings are over $1.01 billion, which is a 19.9% increase.

Adjusted net earnings, meanwhile, have jumped 9.2% year-over-year at just over $1 billion.

Metro’s fourth quarter was impressive. Sales were up 14.4% year-over-year at over $5 billion as food same-store sales increased 6.8% and pharmacy same-store sales went up 5.5% (6.7% increase in prescription drugs and a 3.1% increase in front-store sales).

Online food sales were up 116% year-over-year.

Net earnings were up 31.7% vs. Q4 2022 at $222.2 million and adjusted net earnings improved 4.3% at $228.8 million.

Where the strike impacted Metro’s fourth quarter results the most was in gross profit. Estimated lost profits and direct costs were $36.3 million. Operating expenses also went up $400,000.

Metro workers ratified a new five-year labor agreement. Full-time and senior part-time workers received a pay increase of $2 an hour and all workers received a $1.50 an hour raise. 

Added benefits include a new part-time sick leave program, improved pensions, a new standardized work week for full-time workers, more stable scheduling including additional guaranteed weekends for some classifications, and job protection from the implementation of self-checkouts.

“We are pleased with our fourth quarter results which were achieved in a challenging operating environment,” said Eric La Fleche, president and chief executive officer of Metro. “Our sales momentum remains strong, driven by our discount banners and pharmacy.”

Metro also reached a key milestone in its supply chain modernization program in the fourth quarter with the opening of a new state-of-the-art automated distribution center for fresh and frozen foods north of Montreal.

However, warning signs are already going off for next year. The grocer said during the earnings call that temporary duplication of costs and learning curve inefficiencies, as well as higher depreciation and lower capitalized interest, are going to be costly.

The final phase of Metro’s automated fresh facility in Toronto is expected to be launched next spring.