Metro profits are still lagging, but sales remain on the rise

With one automated fresh facility up and running and another in the final stretch of transition, Metro appears to be successfully navigating through a challenging time.

The Canadian grocer said in early 2024 that getting the two distribution centers in Terrebonne, Quebec, and Toronto, Ontario, online would take a toll financially, but following its third-quarter earnings call on Wednesday, everything appears to be on solid footing.

Supported by a strong showing on the pharmacy side, sales in Q3 came in at $6.65 billion, which is more than $200 million more (3.5%) than it was a year ago.

Food same-store sales went up 2.4% year over year, with pharmacy posting a 5.2% same-store sales gain compared to Q3 2023 (6.3% rise in prescription drugs and 3% increase in front-store sales).

Profit, however, took a hit year over year as it came in at $296.2 million. Last year at this time, Metro registered over $346 million in profit.

Metro also suffered a net income hit in the second quarter, where it was down about 14.5% to $136.4 million.

“We recorded solid comparable sales growth in the third quarter, on top of a very strong quarter last year, reflecting effective merchandising and good execution in our food and pharmacy banners,” Metro CEO Eric La Fleche said in a statement.

La Fleche said the fresh center in Terrebonne is fully operational with productivity levels ramping up, while the one in Toronto has entered its final phase of the transition.

For fiscal year 2024, Metro is projecting operating income before depreciation and amortization, and impairments of assets to grow less than 2% year over year. The grocer expects to resume profit growth after fiscal year 2024.