Topic: How To Invest

The Successful Investor Hotline – Thursday, April 18, 2019

Article Excerpt

METRO INC., $49.25, Toronto symbol MRU, operates over 600 grocery stores and 650 drugstores, mainly in Quebec and Ontario. On May 11, 2018, the company completed its acquisition of Jean Coutu Group. That drugstore chain operates 418 franchised locations in Quebec, New Brunswick and Ontario. Metro paid $4.5 billion (75% in cash, 25% in shares). If you exclude costs related to that acquisition and other unusual items, Metro earned $155.1 million in its fiscal 2019 second quarter, ended March 16, 2019. That’s up 43.5% from $108.1 million a year earlier. Due to the additional shares outstanding, earnings per share gained just 27.7%, to $0.60 from $0.47. That missed the consensus estimate of $0.63. Overall sales rose 27.7%, to $3.70 billion from $2.90 billion. That also fell short of the consensus forecast of $3.73 billion. The new Jean Coutu operations contributed $686.4 million to the latest total sales. If you disregard the new operations, sales gained 4.0%. Food same-store sales improved 4.3%. Higher prices accounted for…