Proactive Investors - Metro Inc (TSX:TSX:MRU) has reported higher second-quarter sales as inflation boosted the cost of a basket of groceries and it grew online transactions.
However, Canada’s third largest food retailer, which operates a network of supermarkets, discount stores and drugstores in Quebec and Ontario, said it is seeing some moderation in food inflation - although it is still elevated compared to pre-pandemic levels.
Sales for the three months to March 11, 2023, rose 6.6% to $4.55 billion compared to elevated sales in the same period last year due to COVID-related restrictions in both provinces. Same-store sales were up 5.8% due to higher inflation, while online foods sales jumped 41% due to new partnership sales.
Metro noted that its food basket inflation reached 9%, down slightly from the previous quarter.
Same-store pharmacy sales increased by 7.3%, with a 5% rise in prescription drugs and a 12.2% improvement in front-store sales including over-the-counter products, cosmetics and health and beauty.
For the quarter, net earnings came in 10% higher at $219 million, while adjusted full-diluted net earnings per share grew 14% to $0.96.
The retailer declared a quarterly dividend of $0.3025 on April 18.
"We are pleased with our results in the second quarter as our teams continued to deliver value to our customers in the current high food inflation environment with competitive everyday prices, growing private label sales and effective promotional strategies,” President and CEO Eric La Fleche said in a statement.
“We will continue to invest in our people, our retail network and the modernization of our supply chain, and we are well-positioned to achieve our long-term growth objectives.”
On its outlook, Metro said it remains focused on offering quality products at competitive prices as higher-than-normal inflation and market challenges persist.
The retailer also said it will launch its new loyalty program — MOI — later this spring.