METRO-RICHELIEU SALES, NET UP IN FIRST HALF

MONTREAL -- Metro-Richelieu here said retail sales growth and cost controls boosted sales and earnings for the second quarter and 24 weeks ended March 11. Net income rose 42.2% to $7.3 million (U.S.) for the quarter and 43.7% to $15.6 million for the half. Sales jumped 7.6% to $491.8 million for the quarter and 6.8% to $1 billion for the first half. The company attributed the earnings increase to "sales growth that outperformed the food industry in general, as well as sustained control of operating costs." Patricia Baker, a securities analyst with Midland Walwyn Capital here, said sales increases are coming from the company's efforts at the retail level, "and when you get more sales at retail, it drives your wholesale business." According to Baker, Metro-Richelieu's sales improvements are resulting primarily from its ongoing investment in its stores, including a stronger private-label program and a major effort to renovate stores, particularly the former Steinberg units in this area. "Every time they renovate a store, they get a sales increase of about 11%," Baker said. The company is also benefiting from restructuring efforts that are enabling it to reduce costs, she added. Metro-Richelieu said capital expenditures this year have been approximately $9.6 million, compared with $5.7 million a year ago. It said it expects to spend another $18 million on capital projects during the third and fourth quarters. The company also said it has acquired and canceled 254,900 Class A subordinate shares since the beginning of the year under its share repurchase program, for a total consideration of approximately $2.1 million.