Metro (MRU) Q4 2025 earnings summary

Executive summary

• Q4 sales reached CAD 5.1 billion, up 3.4% year-over-year, driven by growth in discount and pharmacy retail networks; food same-store sales up 1.6%, pharmacy same-store sales up 4.8%.

• Adjusted net earnings rose 8.6% to CAD 246 million, with adjusted EPS up 10.8% to $1.13; net earnings for the quarter were $217 million, down 1.3%.

• Operations at the Toronto frozen distribution center were disrupted, incurring a CAD 22.5 million after-tax impact in Q4; operations resumed with normalization expected by year-end.

• Fiscal 2025 sales reached $22,006.7 million, up 3.7% year-over-year, with net earnings up 9.4% and adjusted net earnings up 7.9%.

• Contingency plans mitigated supply chain disruptions, with operations resuming in November.

Financial highlights

• Gross margin improved to 20% of sales in Q4, up from 19.7% last year, aided by shrink and productivity gains.

• EBITDA rose 5.5% to CAD 485 million (9.5% of sales); adjusted EBITDA was CAD 491 million, up 6.8%.

• Operating expenses as a percentage of sales were 10.5% in Q4 and 10.4% for the year, with freezer-related costs included.

• Depreciation and amortization expense increased to $139.8 million in Q4 and $594.4 million for the year, mainly due to retail and supply chain investments.

• Capital expenditures for FY 2025 totaled CAD 511 million, down CAD 69 million from last year.

Outlook and guidance

• Direct costs from the freezer issue expected to impact Q1 FY 2026 net earnings by CAD 15–20 million.

• CapEx for FY 2026 projected at approximately CAD 550 million, focused on retail network investments.

• Plans for a dozen new discount stores in FY 2026, with net square footage growth expected above 1%.

• Food same-store sales trends in Q1 similar to Q4; pharmacy prescription sales remain strong, but OTC softer.

• Sales and gross profit impact from the freezer shutdown is expected to be modest due to contingency plans.