Improved food sales, including online sales, led to a 6.2% revenue jump for this retail giant during the most-recent quarter.
The stock trades at 15.2 times the company’s 2020 earnings forecast.
METRO INC., (Toronto symbol MRU; www.metro.ca) operates 950 grocery stores and 650 drugstores, in Quebec, Ontario and New Brunswick.
The company continues to benefit as consumers eat more meals at home during the COVID-19 pandemic instead of going to restaurants. Excluding one-time items, Metro earned $197.7 million in its fiscal 2021 first quarter, ended December 19, 2020. That’s up 9.3% from $180.9 million a year earlier. Due to fewer shares outstanding, earnings per share gained 11.3%, to $0.79 from $0.71. Overall sales rose 6.2%, to $4.28 billion from $4.03 billion a year earlier.
While food same-store sales increased 10.0%, online food sales rose 170% over the previous year. Food inflation accounted for 2.5% of the increase in food sales.
Pharmacy same-store sales rose 1.3%. That reflects a 4.0% increase in prescription drug sale, which offset a 3.8% decline in sales of other items. A milder cold and flu season hurt customer traffic. An eight-week strike by workers at a Jean Coutu distribution centre also hurt the company’s ability to supply goods to its franchised drugstores.
In response, the company plans to more than double by the end of fiscal 2021 the number of its stores offering pickup for online orders. That will see the overall number of those locations jump from 40 to more than 100. As well, Metro plans to open a dedicated store in Montreal to handle online grocery orders.
The company is also taking advantage of pandemic-induced shuttering of restaurants to expand its offerings of ready-to-eat hot and cold meals. It’s likely sales of these products will remain strong even after restaurants reopen.
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Metro is building a new distribution centre near Montreal to handle fresh and frozen products. The new facility will use robotic equipment to cut its labour costs. As well, the company is expanding its produce and dairy-products distribution centre in Laval, Quebec. In all, Metro expects to spend $420 million on these projects over the next five years.
Eliminating overlapping operations with its Jean Coutu pharmacy chain has let Metro cut $75 million from its annual costs.
The company’s sound balance sheet helps it afford strategic acquisitions like Jean Coutu. Although Metro had to borrow most of the cash it needed for Jean Coutu, its long-term debt of $2.61 billion (as of September 26, 2020) was a moderate 20% of its market cap. The company also held cash of $441.5 million.
Metro’s long-term outlook remains bright. In fact, the company will now raise your quarterly dividend by 11.1%. With the March 2021 payment, investors will then receive $0.25 a share instead of $0.225. The stock yields 1.9%. Meanwhile, Metro will likely earn $3.50 a share in 2021, and the stock trades at a reasonable 15.2 times that forecast.
T.MRU Chart says after about (4)months of short selling I quess specialist’s now have the stock/inventory to rally the look for higher Price/volume.You can’t have higher price without higher Volume’s.
Thanks for your comment. While the stock has dropped lately, Metro Inc.’s (MRU) outlook remains positive, and we still see the shares as an attractive buy.
T.MRC sell signal was November 2020 @$65.95 then we had a buy signalDEC2020@$56.49 but we see other’s had other idea’s and the stock Price continued to drop. to $52.89.So if you bought at the November high’s .
Trading Tip. VOLUME’S what to watch for stock volume /price’s moving higher on light volume 100,200,300 shares and so on the move to higher’s price could be underway. Selling
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T.MRU Chart says after about (4)months of short selling I quess specialist’s now have the stock/inventory to rally the look for higher Price/volume.You can’t have higher price without higher Volume’s.
If earning’s were the key to a buy WHY! has the stock fallen for months.’$65.00 down to today’s prices a drop of over $10.00
Thanks for your comment. While the stock has dropped lately, Metro Inc.’s (MRU) outlook remains positive, and we still see the shares as an attractive buy.
T.MRC sell signal was November 2020 @$65.95 then we had a buy signalDEC2020@$56.49 but we see other’s had other idea’s and the stock Price continued to drop. to $52.89.So if you bought at the November high’s .
So is it a buy!Why! sure what the short’s take down will short’s will RALLY!
Trading Tip. VOLUME’S what to watch for stock volume /price’s moving higher on light volume 100,200,300 shares and so on the move to higher’s price could be underway. Selling
Metro Inc. (MRU) continues to report good results—and we still see the stock as a buy.
correction should read T.MRU not T.MRC
Thanks for pointing this out. Correction made.
Tax loss selling just an alibi to short A STOCK
I don’t think MRU it’s done sliding down yet. I don’t know why it is doing so bad given the great numbers it has reported.
Metro Inc. (MRU) continues to report good results—and we still see the stock as a buy.