Metro Sees 14% Earnings Jump In Fiscal Q12025, Thanks To Tax Break
Metro Inc. (TSX: MRU) has announced its first-quarter financial results for fiscal 2025, reporting a 2.9% increase in total sales, reaching $5.12 billion, compared to $4.97 billion in the same quarter last year.
The food segment, traditionally Metro’s core revenue driver, saw same-store sales rise by 1.0%, but adjusting for the Christmas week shift, this metric improved to 2.4%. This is a decline from the 4.2% growth observed in the previous quarter.
Online food sales showed an 18.6% increase year-over-year, pharmacy same-store sales grew by 5.1%, driven by a 7.3% rise in prescription drug sales, and front-store sales were up by only 0.5%
Operating income totaled $481.5 million, reflecting a 2.9% rise from the prior year’s $468.1 million, but margins remained flat at 9.4%. Operating expenses hovered at 10.3% of sales from 10.2% last year, a trend largely attributed to the launch of the Moi Rewards program in Ontario and professional fees tied to tax-related issues.
Notable this quarter is Metro’s significantly lower effective tax rate, which fell from 25.0% to 18.2%. The decline was primarily due to the resolution of a prior-year tax position, contributing a favorable impact of $20.6 million, alongside a $6.1 million provincial tax holiday tied to Metro’s automated distribution center in Terrebonne.
This led to net earnings rising by 13.6% to $259.5 million from $228.5 million last year. However, on adjusted basis, net earnings only increased by 4.4% to $245.4 million from $235.0 million last year. This translates to $1.10 earnings per share.
The company raised its quarterly dividend by 10.4% to $0.37 per share. Metro also updated that within two months, it has repurchased 1.43 million common shares at an average price of $90.95 for a total outlay of $129.6 million through its share buyback program.
Metro last traded at $91.55 on the TSX.
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