As food inflation soars for the average consumer, Metro Inc (TSX: MRU) revealed this morning that something else is soaring – its bottom line. The grocer has reported its first quarter 2023 financial results for the period ended December 17, 2022, and if you’re a shareholder, they’re quite positive.
Sales for the quarter improved 8.2% on a year over year basis, climbing to $4,670.9 million, while same-store food sales improved 7.5% and same-store pharmacy sales improved 7.7% on an annual basis. The improvement in sales, as per the company were “mainly due to higher inflation this quarter.”
Food basket inflation meanwhile was said to be at 10.0%, which is the same level as in the firms prior quarter.
With Metro firmly blaming its success on inflation during the quarter, it indicated that its operating income before depreciation and amortization improved 8.9% to $462.0 million. Operating expenses are said to have amounted to 9.8% of sales in Q1 2023, versus 10.2% of sales in Q1 2022. The improvement is said to be a result of “good cost control and good leverage on the high level of sales.”
Net earnings overall improved 11.3% on a year over year basis to $231.1 million, resulting in fully diluted earnings per share of $0.97, an improvement of 14.1%.
“As inflationary pressures persist, our teams did an excellent job to offer the best value possible to customers in our stores, pharmacies and online and I thank them for their hard work. We will continue to execute on our business plans to deliver a strong value proposition to our customers, invest in our retail network and infrastructure, and support our communities,” said CEO Eric La Fleche on the results.
Inflation for Metro meanwhile was so bad that it is increasing its dividend to shareholder by 10% to $0.3025 per share. At the same time, the company indicated that it spent $52.2 million on share buybacks between November 25 and January 13, repurchasing 696,000 common shares in the process.
Metro’s results come as Canadians continue to grapple with food inflation hitting their pocket books. The month of December saw the price for food purchased from stores increase 11%, following an 11.4% increase in November, despite a headline CPI figure of 6.3% for December. The sector continues to be one of the most inflation-impacted categories within the consumer price index.
Metro Inc last traded at $74.38 on the TSX.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
