Metro Inc. (TSX: MRU) has released its financial results for the fourth quarter and full fiscal year 2024, reporting quarterly sales of $4.94 billion, a decrease of 2.6% compared to $5.07 billion in the fourth quarter of fiscal 2023. However, adjusting for the 12-week quarter in 2024 versus the 13-week quarter in 2023, sales increased by 5.7%.
This growth was largely driven by improved performance in food and pharmacy, with food same-store sales rising 2.2% compared to a more robust 6.8% growth in the same quarter last year. Pharmacy same-store sales increased by 5.7%, supported by 6.8% growth in prescription drug sales and a 3.3% rise in front-store sales. Online food sales were a bright spot, climbing 27.6%, although this growth is a stark slowdown from the triple-digit growth of 116% reported in Q4 2023.
The company’s gross margins remained steady at 19.7% for the quarter, consistent with 2023 levels.
In the fourth quarter, operating income before depreciation and amortization (OIBDA) grew by 2.6% to $459.6 million, or 9.3% of sales, compared to $448.0 million, or 8.8% of sales, in the corresponding quarter of 2023.
Net earnings for the fourth quarter were $219.9 million, down 1.0% from $222.2 million in Q4 2023, reflecting ongoing pressures on profitability. Adjusted net earnings, which exclude specific items such as amortization from the Jean Coutu acquisition, mirrored this decline, coming in at $226.5 million versus $228.8 million in the previous year.
Fully diluted earnings per share (EPS) for the quarter rose by 2.1% to $0.98, while adjusted EPS grew by 3.0% to $1.02. These gains were aided by share repurchase activity, which reduces the total shares outstanding and boosts per-share metrics.
For the full fiscal year, Metro reported total sales of $21.22 billion, up 2.4% compared to $20.72 billion in fiscal 2023. Adjusting for the 52-week year in 2024 versus the 53-week year in 2023, sales increased by 4.4%.
OIBDA increased slightly by 0.9% to $1.99 billion, representing 9.4% of sales, down marginally from 9.5% in fiscal 2023. Metro attributed this erosion to increased operating expenses, which rose as a percentage of sales to 10.4% in fiscal 2024 from 10.2% the previous year. These costs were driven by the commissioning of new automated distribution centers and the final phase of its Toronto fresh distribution facility.
Net earnings for the year fell by 8.5% to $931.7 million, compared to $1.02 billion in fiscal 2023. Adjusted net earnings showed a more moderate decline of 3.3%, coming in at $972.9 million versus $1.01 billion last year.
Fully diluted EPS for the year dropped by 5.5% to $4.11, while adjusted EPS remained flat at $4.30, highlighting Metro’s struggle to convert sales growth into meaningful profit expansion. During fiscal 2024, the company repurchased 7 million shares at an average price of $72.90, for a total cost of $510.3 million.
The company’s financial costs have also risen, with net financial expenses for the fourth quarter increasing to $32.6 million from $30.1 million in the same period last year. For the full year, financial costs rose sharply to $145.7 million, up from $122.6 million in fiscal 2023, driven by higher debt levels and reduced capitalized interest.
CEO Eric La Flèche emphasized the progress made in modernization efforts and customer engagement initiatives, including the successful launch of the MOI Rewards loyalty program in Ontario. While these efforts are critical for long-term growth, the near-term financial results indicate Metro faces significant headwinds in achieving its medium-term target of 8%-10% annual adjusted EPS growth.
Metro last traded at $86.28 on the TSX.
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