Metro's same-store sales grew by 1.6 per cent last quarter, driven largely by growth at its discount banners.Doug Ives/The Canadian Press
A mechanical issue that shut down Metro Inc.’s MRU-T frozen food distribution centre for nearly two months has been resolved, the grocery retailer announced on Wednesday, as it reported a hit to its fourth-quarter earnings as a result of the disruption.
Metro, which previously signalled the shutdown would negatively affect earnings, reported disruption costs related to lost food products and repairs of $22.5-million after tax in the quarter ended Sept. 27. The problem affected various parts of the refrigeration system, and the company sees further costs of $15-million to $20-million in its first quarter. Metro expects some recoveries from insurance claims.
The Montreal-based grocer also incurred costs to implement contingency plans, which has kept food stocked at its Metro and Food Basics stores in Ontario. Those measures included shipping products from the company’s other major distribution centre in Terrebonne, Que., about 30 kilometres northwest of Montreal, and storing products with third-party facilities in Ontario.
While the disruption was mostly invisible to shoppers, stock was low in certain categories, such as frozen bakery items, and that has affected sales, chief executive officer Eric La Flèche told analysts on a conference call Wednesday.
The facility reopened on Nov. 10, and began shipping to stores on Nov. 18. Operations should be “essentially back to normal” by the end of the year, Mr. La Flèche said.
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Metro’s net earnings for the quarter fell to $217-million or $1 in fully diluted earnings per share, compared with $219-million or 98 cents per share in the same period last year. Excluding the impact of the shutdown and other factors, adjusted net earnings grew to $246-million or $1.13 in fully diluted earnings per share, compared with $226.5-million or $1.02 per share in the fourth quarter last year.
Metro’s sales grew by 3.4 per cent in the quarter to $5.1-billion.
Same-store sales – a measure that tracks sales growth at stores open for more than a year – grew by 1.6 per cent, driven largely by sales growth in the company’s discount banners, Super C and Food Basics.
Other major Canadian grocers have also reported their discount locations consistently outperforming full-price grocery stores for months. Even as food inflation has cooled, shoppers are still stinging from significant price increases in recent years and have been looking for ways to cut costs.
Both Metro and competitors such as Loblaw have been opening new stores, or converting existing locations to discount formats.
“It’s making the market, certainly, more competitive,” Mr. La Flèche said.
Metro reported a 4.8-per-cent increase in same-store sales at Jean Coutu, its chain of more than 400 franchised drugstores. The growth was driven by an increase in sales of prescription drugs, as well as in over-the-counter medicines, and health and beauty products.
For the full year, Metro reported net earnings grew to just over $1-billion or $4.63 per share in fiscal 2025, compared with $931.7-million or $4.11 per share in the prior year. Sales grew by 3.7 per cent to $22-billion.