Metro (MRU) Q4 2024 earnings summary

Executive summary

• Q4 sales were CAD 4.94 billion, down 2.6% year-over-year, but up 5.7% on a comparable 12-week basis due to last year's labor disruption and extra week in 2023.

• Food same-store sales rose 2.2% and pharmacy same-store sales increased 5.7% year-over-year, with online food sales up 27.6% for the comparable 12-week period.

• Gross margin improved to 19.7% from 19.5% last year; EBITDA margin rose to 9.3% of sales.

• Adjusted net earnings were CAD 226.5 million, down 1% year-over-year, and adjusted EPS increased 3% to CAD 1.02.

• Supply chain modernization, a nearly CAD 1 billion project, was completed, including the final phase of the Toronto automated fresh facility.

Financial highlights

• Operating expenses as a percentage of sales decreased to 10.4% from 10.7% last year.

• Depreciation and amortization rose 8.6% to CAD 135.8 million in Q4 and reached CAD 570.4 million for fiscal 2024.

• Net financial costs increased to CAD 32.6 million in Q4 and CAD 145.7 million for fiscal 2024 due to higher debt and interest rates.

• Effective tax rate was 24.5%, up from 24.1% year-over-year.

• Fiscal 2024 sales reached CAD 21.2 billion, up 2.4% year-over-year, with adjusted net earnings at CAD 972.9 million, down 3.3%.

Outlook and guidance

• Fiscal 2024 results met prior guidance; gradual profit growth expected in 2025.

• Medium- to long-term targets: sales growth of 2%-4%, operating income growth of 4%-6%, and adjusted EPS growth of 8%-10% annually.

• Inflation expected to normalize around 2% in 2025.

• CapEx for 2025 projected at CAD 550-600 million, with some 2024 projects rolling over.