Leaner Metro is ready for the competition

Article Excerpt

METRO INC. $67 (Toronto symbol MRU; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 93.1 million; Market cap: $6.2 billion; Price-to-sales ratio: 0.5; Dividend yield: 1.5%; TSINetwork Rating: Average; www.metro.ca) operates about 600 supermarkets in Quebec and Ontario. It also has over 250 drugstores under the Brunet, The Pharmacy and Drug Basics banners. Metro has aggressively cut costs and improved its efficiency in response to rising competition from larger Canadian chains like Loblaw and Sobeys, as well as big U.S. retailers like Wal-Mart and Costco. It also upgraded its stores and lowered its advertising costs by converting its various banners in Ontario to the Metro and Food Basics brands. Cost cuts fuel big earnings jump Metro’s sales rose 12.0%, from $10.7 billion in 2008 to $12.0 billion in 2012 (fiscal years end September 30). Earnings rose 67.6%, from $280.8 million to $470.6 million. Metro is an aggressive buyer of its own shares. As a result, earnings per share jumped 87.5%, from…

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