Metro (MRU) Q1 2025 earnings summary

Executive summary

• First quarter sales reached CAD 5.12 billion, up 2.9% year-over-year, with growth in both food and pharmacy segments; food same-store sales up 1% and pharmacy same-store sales up 5.1%.

• Adjusted net earnings increased 4.4% to CAD 245.4 million, and adjusted EPS rose 7.8% to CAD 1.10; net earnings rose 13.6% to CAD 259.5 million.

• EBITDA was CAD 481.5 million, representing 9.4% of sales, up 2.9% year-over-year.

• Dividend declared at CAD 0.37 per share, a 10.4% increase from last year.

• Strong performance attributed to revenue growth, expense control, and the successful launch of Moi Rewards in Ontario.

Financial highlights

• Gross margin was 19.7% of sales, slightly up from 19.6% last year.

• Operating expenses rose to 10.3% of sales, mainly due to the Moi Rewards launch and professional fees for tax resolution.

• Net financial costs decreased to CAD 30.7 million, mainly due to interest receivable from a resolved tax file.

• Effective tax rate dropped to 18.2% from 25% last year, reflecting a CAD 20.6 million tax gain and a CAD 6.1 million tax holiday.

• Online food sales up 18.6%, driven by third-party partnerships and expanded click-and-collect services.

Outlook and guidance

• Annual growth target for adjusted net earnings per share remains 8%-10% over the medium and long term.

• Profit growth expected to gradually resume in fiscal 2025.

• CapEx guidance remains at CAD 550-600 million for the year.

• Focus on efficiency gains and improved service following major supply chain investments.