MONTRÉAL, Jan. 25, 2022 /CNW
Telbec/ - METRO INC. (TSX: MRU) today announced its results
for the first quarter of fiscal 2022 ended
December 18, 2021.
2022 FIRST QUARTER HIGHLIGHTS
- Sales of $4,316.6 million, up
0.9%, and up 7.1% vs 2020
- Food same-store sales down 1.4%, and up 8.5% vs
2020
- Pharmacy same-store sales up 7.7%, and up 9.1% vs
2020
- Net earnings of $207.7 million, up 8.6% and adjusted net
earnings(1) of $214.2 million, up 8.3%, and up 22.0% and
18.4% respectively vs 2020
- Fully diluted net earnings per share of $0.85, up 11.8%, and adjusted fully diluted net
earnings per share(1) of $0.88, up 11.4%, and up 26.9% and 23.9%
respectively vs 2020
- Declared dividend of $0.275 per share, up 10.0%
|
12 weeks / Fiscal
Year
|
(Millions of
dollars, except for net earnings per share)
|
2022
|
%
|
|
2021
|
%
|
Change (%)
|
Sales
|
4,316.6
|
100.0
|
|
4,278.2
|
100.0
|
0.9
|
Operating income before
depreciation
|
424.1
|
9.8
|
|
399.2
|
9.3
|
6.2
|
and
amortization
|
Net earnings
|
207.7
|
4.8
|
|
191.2
|
4.5
|
8.6
|
Fully diluted net
earnings per share
|
0.85
|
—
|
|
0.76
|
—
|
11.8
|
Adjusted net
earnings(1)
|
214.2
|
5.0
|
|
197.7
|
4.6
|
8.3
|
Adjusted fully diluted
net earnings per share(1)
|
0.88
|
—
|
|
0.79
|
—
|
11.4
|
PRESIDENT'S MESSAGE
"We delivered strong results in
our first quarter of 2022, driven by
continued sales growth on top of record sales last year and good
expense control. Our industry is facing higher than normal
inflationary pressures and our teams are working hard to provide
the best value possible to our customers. The rapid spread of the
omicron variant since the end of the quarter has caused challenges
in our operations and I want to thank all our front-line employees
for their commitment in these trying times. Today we are unveiling
our 2022-2026 Corporate Responsibility Plan which builds on the
progress we achieved over the last decade and sets ambitious goals
for the company in the context of global sustainable
development", declared Eric La Flèche, President
and Chief Executive Officer.
OPERATING RESULTS
SALES
Sales in the first quarter of Fiscal 2022 remained strong,
reaching $4,316.6 million, up
0.9% compared to $4,278.2 million in the first quarter of
2021, and up 7.1% over two years. Food same-store sales were down
1.4% versus the same quarter last year (up 10.0% in 2021) but
increased 8.5% compared to the first quarter of 2020. Online food
sales were flat versus last year (up about 170% in 2021). Our food
basket inflation was approximately 3.5% (2.0% in the previous
quarter). Pharmacy same-store sales were up 7.7% (1.3% in
2021), with a 7.1% increase in prescription drugs due to an uptick
in physician visits and a 8.9% increase in front-store sales
supported by strong Over-The-Counter growth, particularly Cough
& Cold products and the lower sales last year as a result of
the labour conflict.
OPERATING INCOME BEFORE DEPRECIATION AND AMORTIZATION
This earnings measurement excludes financial costs, taxes,
depreciation and amortization.
Operating income before depreciation and amortization for the
first quarter of Fiscal 2022 totalled $424.1 million, or 9.8% of sales, an
increase of 6.2% versus the corresponding quarter of Fiscal
2021.
Gross margin on sales for the first quarter of Fiscal 2022 was
19.9%, versus 19.7% for the corresponding period of 2021.
Operating expenses as a percentage of sales for the first
quarter of Fiscal 2022 were 10.1% versus 10.4% for the
corresponding quarter of 2021 mainly due to the reduction in
COVID-related costs.
DEPRECIATION AND AMORTIZATION AND NET FINANCIAL COSTS
Total depreciation and amortization expense for the first
quarter of Fiscal 2022 was $112.5 million versus $107.3 million for the corresponding quarter
of 2021. This increase reflects the additional investments in
supply chain and logistics as well as in-store technology.
Net financial costs for the first quarter of Fiscal 2022 were
$28.7 million compared with
$31.4 million for the
corresponding quarter of 2021.
INCOME TAXES
The income tax expense of $75.2 million for the first quarter of
Fiscal 2022 represented an effective tax rate of 26.6% compared
with an income tax expense of $69.3 million and 26.6% in the first quarter
of Fiscal 2021.
NET EARNINGS AND ADJUSTED NET EARNINGS(1)
Net earnings for the first quarter of Fiscal 2022 were
$207.7 million compared with
$191.2 million for the
corresponding quarter of 2021, while fully diluted net earnings per
share were $0.85 compared with
$0.76 in 2021, up 8.6% and 11.8%
respectively, and up 22.0% and 26.9% respectively on a two-year
basis. Excluding the specific item shown in the table below,
adjusted net earnings(1) for the first quarter of Fiscal
2022 totalled $214.2 million
compared with $197.7 million for
the corresponding quarter of 2021, and adjusted fully diluted net
earnings per share(1) amounted to $0.88 versus $0.79,
up 8.3% and 11.4% respectively, and up 18.4% and 23.9% respectively
over two years. The labour conflict at our Jean Coutu distribution center had an
unfavorable impact of approximately $0.05 on the fully diluted net earnings per share
of the first quarter of 2021.
Net earnings adjustments(1)
|
12 weeks / Fiscal
Year
|
|
|
|
|
2022
|
|
2021
|
|
Change (%)
|
|
(Millions of
dollars)
|
Fully diluted
EPS (Dollars)
|
|
(Millions of
dollars)
|
Fully diluted
EPS
(Dollars)
|
|
Net earnings
|
Fully
diluted
EPS
|
Net earnings
|
207.7
|
0.85
|
|
191.2
|
0.76
|
|
8.6
|
11.8
|
Amortization of
intangible assets acquired in
|
6.5
|
|
|
6.5
|
|
|
|
|
connection with the
Jean Coutu Group
acquisition, after taxes
|
Adjusted net
earnings(1)
|
214.2
|
0.88
|
|
197.7
|
0.79
|
|
8.3
|
11.4
|
NORMAL COURSE ISSUER BID PROGRAM
Under the current normal course issuer bid program, the
Corporation may repurchase up to 7,000,000 of its Common Shares
between November 25, 2021 and November 24, 2022. Between
November 25, 2021 and
January 14, 2022, the Corporation has repurchased 650,000
Common Shares at an average price of $63.38, for a total consideration of $41.2 million.
DIVIDENDS
On January 24, 2022, the Board of
Directors declared a quarterly dividend of $0.275 per share, an increase of 10.0%
versus the same quarter last year.
FORWARD-LOOKING INFORMATION
We have used, throughout this report, different statements that
could, within the context of regulations issued by the Canadian
Securities Administrators, be construed as being forward-looking
information. In general, any statement contained herein that does
not constitute a historical fact may be deemed a forward-looking
statement. Expressions such as "predict", "expect" and other
similar expressions are generally indicative of forward-looking
statements. The forward-looking statements contained herein are
based upon certain assumptions regarding the Canadian food and
pharmaceutical industries, the general economy, our annual budget,
as well as our 2022 action plan.
These forward-looking statements do not provide any guarantees
as to the future performance of the Corporation and are subject to
potential risks, known and unknown, as well as uncertainties that
could cause the outcome to differ significantly. The arrival of a
new competitor is an example of the risks described under the "Risk
Management" section of the 2021 Annual Report which could
have an impact on these statements. As with the preceding risks,
the COVID-19 pandemic constitutes a risk that could have an impact
on the business, operations, projects and performance of the
Corporation as well as on the forward-looking statements contained
in this document.
We believe these statements to be reasonable and pertinent as at
the date of publication of this report and represent our
expectations. The Corporation does not intend to update any
forward-looking statement contained herein, except as required by
applicable law.
NON-IFRS MEASUREMENTS
In addition to the International Financial Reporting Standards
(IFRS) earnings measurements provided, we have included certain
non-IFRS earnings measurements. These measurements are presented
for information purposes only. They do not have a standardized
meaning prescribed by IFRS and therefore may not be comparable to
similar measurements presented by other public companies.
ADJUSTED OPERATING INCOME BEFORE DEPRECIATION AND
AMORTIZATION, ADJUSTED NET EARNINGS AND ADJUSTED FULLY DILUTED NET
EARNINGS PER SHARE
Adjusted operating income before depreciation and amortization,
adjusted net earnings and adjusted fully diluted net earnings per
share are earnings measurements that exclude some items that must
be recognized under IFRS. They are non-IFRS measurements. We
believe that presenting earnings without these items, which are not
necessarily reflective of the Corporation's performance, leaves
readers of financial statements better informed as to the current
period and corresponding prior year's period's operating earnings,
thus enabling them to better perform trend analysis, evaluate the
Corporation's financial performance and judge its future outlook.
The exclusion of these items does not imply that they are
non-recurring.
OUTLOOK(2)
Government measures to curb the impact of the pandemic were
tightened at the start of the second quarter, similar to what
transpired a year ago, and it remains difficult to predict how they
will evolve and the impact they will have on our business. In the
short term, food sales are expected to remain relatively stable as
restaurant closures and work from home advisories persist. On the
pharmacy side, we expect sales to increase versus the prior year
with launch of COVID rapid test distribution in our network coupled
with less restrictive government measures as 2021 was unfavourably
impacted by a six-week ban on the sale of non-essential goods in
Quebec. Our industry continues to
experience cost inflationary pressures, particularly in cost of
goods, and labour shortages which have increased with the latest
strain of COVID. Labour shortages are also affecting our suppliers
and logistics providers which in turn impact our supply chain and
it is difficult to predict how long this situation will last.
Despite this challenging environment, our teams continue to focus
on delivering quality products at competitive prices to our
customers.
CONFERENCE CALL
Financial analysts and institutional investors are invited to
participate in a conference call for the 2022 first
quarter results at 1:30 p.m.
(EST) today, January 25,
2022. To access the conference call, please dial (416)
764-8651 or 1 (888) 390-0620. The media and investing public
may access this conference via a listen mode only.
Notice to readers: METRO
INC. first quarter of 2022 interim condensed consolidated financial
statements and management's discussion and analysis are available
on the Internet at www.metro.ca - Corporate Site -
Investor Relations - 2022 Quarterly Results - 2022 First
Quarter Results.
(1) See table on "Net earnings
adjustments" and section on "Non-IFRS Measurements"
|
(2) See section on
"Forward-looking Information"
|
SOURCE METRO INC.