METRO-RICHELIEU QUARTER NET UP 43%

MONTREAL -- Metro-Richelieu here said improvements in both its wholesale and retail operations contributed to a 43.3% increase in net income in the third quarter ended July 2.

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Sales rose 4.4% to $651.4 million in the quarter.

The company attributed the earnings improvement to "enhanced efficiency in wholesale operations, as well as a better performance in the food-retailing sector."

Metro-Richelieu operates corporate stores under the Super C and Metro banners, and also supplies 1,000 affiliated and franchised retailers in Quebec.

"Metro-Richelieu will continue to focus its efforts on merchandising programs as well as store remodeling and conversions," said Pierre H. Lessard, president and chief executive officer.

Metro during the third quarter remodeled and upgraded 10 former Steinberg stores -- which now operate under the Metro banner -- to an upscale format featuring more high-margin merchandise. The addition of 10 more units to this format, which the company introduced last fall, brings the total number of these stores to 15, the company said.

During the quarter, Metro-Richelieu also completed an expansion of its frozen food warehouse and began modernizing its meat processing facilities, a project scheduled to be completed during the next fiscal year.

Denyse Chicoyne, a securities analyst with Nesbitt Thomson here, said same-store sales at the former Steinberg stores rose 3.7% for the 40-week period, which improved profitability.

"The results of the new concept are promising, with both sales and margins up in the renovated stores and improved margins coming from a better mix," she said. "With another 15 to 20 former Steinbergs scheduled for renovation in fiscal 1995, we can expect continued improvement in the profitability of those stores."

3rd-QUARTER RESULTS

Qtr Ended 7/2/94 7/3/94

Sales $651.4 million $624.1 million

Change 4.4%

Net Income $9.3 million $6.5 million

Change 43.3%

Inc/Share 28 cents 19 cents

40 Weeks 1994 1993

Sales $1.6 billion $1.5 billion

Change 3.7%

Net Income $20.3 million $13.8 million

Change 46.6%

Inc/Share 59 cents 42 cents