MONTRÉAL, April 21,
2022 /CNW Telbec/ - METRO INC. (TSX: MRU) today
announced its results for the second quarter of fiscal 2022 ended
March 12, 2022.
2022 SECOND QUARTER HIGHLIGHTS
- Sales of $4,274.2 million, up
1.9%
- Food same-store sales up 0.8%, and up 11.5% for the first 8
weeks of the second quarter versus 2020 (pre-COVID period)
- Pharmacy same-store sales up 9.4%, and up 11.0% for the
first 8 weeks of the second quarter versus 2020 (pre-COVID
period)
- Net earnings of $198.1
million, up 5.3% and adjusted net earnings(1) of
$204.7 million, up 5.1%
- Fully diluted net earnings per share of $0.82, up 9.3%, and adjusted fully diluted net
earnings per share(1) of $0.84, up 7.7%
- $8 million of gift cards paid
to front-line employees, the same amount as in the second quarter
last year
|
12 weeks / Fiscal
Year
|
(Millions of
dollars, except for net earnings per share)
|
2022
|
%
|
|
2021
|
%
|
Change (%)
|
Sales
|
4,274.2
|
100.0
|
|
4,193.0
|
100.0
|
1.9
|
Operating income before
depreciation
and amortization
|
414.0
|
9.7
|
|
396.1
|
9.4
|
4.5
|
Net earnings
|
198.1
|
4.6
|
|
188.1
|
4.5
|
5.3
|
Fully diluted net
earnings per share
|
0.82
|
—
|
|
0.75
|
—
|
9.3
|
Adjusted net
earnings(1)
|
204.7
|
4.8
|
|
194.7
|
4.6
|
5.1
|
Adjusted fully diluted
net earnings per share(1)
|
0.84
|
—
|
|
0.78
|
—
|
7.7
|
|
|
|
|
|
|
|
|
24 weeks / Fiscal
Year
|
(Millions of
dollars, except for net earnings per share)
|
2022
|
%
|
|
2021
|
%
|
Change (%)
|
Sales
|
8,590.8
|
100.0
|
|
8,471.2
|
100.0
|
1.4
|
Operating income before
depreciation
and amortization
|
838.1
|
9.8
|
|
795.3
|
9.4
|
5.4
|
Net earnings
|
405.8
|
4.7
|
|
379.3
|
4.5
|
7.0
|
Fully diluted net
earnings per share
|
1.67
|
—
|
|
1.51
|
—
|
10.6
|
Adjusted net
earnings(1)
|
418.9
|
4.9
|
|
392.4
|
4.6
|
6.8
|
Adjusted fully diluted
net earnings per share(1)
|
1.72
|
—
|
|
1.57
|
—
|
9.6
|
PRESIDENT'S MESSAGE
"We are pleased with our results in the second quarter,
achieved in a challenging operating environment marked by the
Omicron variant and labour shortages throughout the supply chain.
Our industry continues to experience higher than normal
inflationary pressures and our teams remain focused on providing
quality products at competitive prices to our customers. We reached
another milestone this quarter with the successful start up of our
fully automated frozen distribution center in Toronto. Finally, I am proud to say that for
the second time in three years, the Jean Coutu banner has been
designated by consumers as the most admired company in Quebec in the latest Leger Reputation survey.
This is a reflection of the strength of the brand, the trust of
consumers, and the quality of services provided by the pharmacist
owners", declared Eric La Flèche, President and
Chief Executive Officer.
OPERATING RESULTS
SALES
Sales in the second quarter of Fiscal 2022 remained strong,
reaching $4,274.2 million, up
1.9% compared to $4,193.0 million in the second quarter of
2021. Food same-store sales were up 0.8% versus the same quarter
last year and were up 11.5% for the first 8 weeks of the second
quarter compared to the same period of 2020 (pre-COVID period).
Online food sales increased by 6.0% versus last year (up 240.0% in
2021). Our food basket inflation was slightly below 5.0% (3.5% in
the previous quarter). Pharmacy same-store sales were up 9.4%,
with a 7.7% increase in prescription drugs supported by
COVID-related activities such as the distribution of rapid tests,
and a 13.3% increase in front-store sales supported by a
stronger cough and cold season as well as the lower sales last year
because of the six-week ban of the sale of non-essential products.
Pharmacy same-store sales were up 11.0% for the first 8 weeks of
the second quarter versus 2020 (pre-COVID period).
Sales in the first 24 weeks of Fiscal 2022 totalled $8,590.8 million, up 1.4% compared to
$8,471.2 million for the
corresponding period of 2021.
OPERATING INCOME BEFORE
DEPRECIATION AND AMORTIZATION
This earnings measurement excludes financial costs, taxes,
depreciation and amortization.
Operating income before depreciation and amortization for the
second quarter of Fiscal 2022 totalled $414.0 million, or 9.7% of sales, an
increase of 4.5% versus the corresponding quarter of Fiscal 2021.
Operating income before depreciation and amortization for the first
24 weeks of Fiscal 2022 totalled $838.1
million or 9.8% of sales, up 5.4% versus the corresponding
period of 2021.
Gross margin on sales for the second quarter and the first 24
weeks of Fiscal 2022 were 20.1% and 20.0% respectively, versus
20.2% and 19.9% for the corresponding periods of 2021.
Operating expenses as a percentage of sales for the second
quarter of Fiscal 2022 were 10.4% versus 10.7% for the
corresponding quarter of 2021 mainly due to the reduction in
COVID-related costs, although gift cards totalling $8 million
were paid to all front-line employees in both years. For the first
24 weeks of Fiscal 2022, operating expenses as a percentage of
sales were 10.2% versus 10.5% in 2021.
DEPRECIATION AND AMORTIZATION AND
NET FINANCIAL COSTS
Total depreciation and amortization expense for the second
quarter of Fiscal 2022 was $116.3 million versus $110.8 million for the corresponding quarter
of 2021. This increase reflects the additional investments in
supply chain and logistics as well as in-store technology. For the
first 24 weeks of Fiscal 2022, total depreciation and amortization
expense was $228.8 million versus
$218.1 million for the corresponding
period of 2021.
Net financial costs for the second quarter of Fiscal 2022 were
$27.8 million compared with
$31.3 million for the
corresponding quarter of 2021. For the first 24 weeks of Fiscal
2022, net financial costs were $56.5
million compared with $62.7
million for the corresponding period of 2021.
INCOME TAXES
The income tax expense of $71.8 million for the second quarter of
Fiscal 2022 represented an effective tax rate of 26.6% compared
with an income tax expense of $65.9 million and an effective tax rate of
25.9% in the second quarter of Fiscal 2021. The 24-week period
income tax expense of $147.0 million
for Fiscal 2022 and $135.2 million
for Fiscal 2021 represented an effective tax rate of 26.6% and
26.3% respectively.
NET EARNINGS AND ADJUSTED NET
EARNINGS(1)
Net earnings for the second quarter of Fiscal 2022 were
$198.1 million compared with
$188.1 million for the
corresponding quarter of 2021, while fully diluted net earnings per
share were $0.82 compared with
$0.75 in 2021, up 5.3% and 9.3%
respectively. Excluding the specific item shown in the table below,
adjusted net earnings(1) for the second quarter of
Fiscal 2022 totalled $204.7 million compared with $194.7 million for the corresponding quarter
of 2021, and adjusted fully diluted net earnings per
share(1) amounted to $0.84
versus $0.78, up 5.1% and 7.7%
respectively.
Net earnings for the first 24 weeks of Fiscal 2022 were
$405.8 million compared with
$379.3 million for the
corresponding period of 2021, while fully diluted net earnings per
share were $1.67 compared with
$1.51 in 2021, up 7.0% and 10.6%,
respectively. Excluding the specific item shown in the table below,
adjusted net earnings(1) for the first 24 weeks of
Fiscal 2022 totalled $418.9 million compared with $392.4 million for the corresponding period
of 2021, and adjusted fully diluted net earnings per
share(1) amounted to $1.72
versus $1.57, up 6.8% and 9.6%,
respectively.
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
|
198.1
|
0.82
|
|
188.1
|
0.75
|
|
5.3
|
9.3
|
Amortization of
intangible assets acquired in connection with the Jean Coutu Group
acquisition, after taxes
|
6.6
|
|
|
6.6
|
|
|
|
|
Adjusted net
earnings(1)
|
204.7
|
0.84
|
|
194.7
|
0.78
|
|
5.1
|
7.7
|
|
|
|
|
|
|
|
|
|
|
24 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
|
405.8
|
1.67
|
|
379.3
|
1.51
|
|
7.0
|
10.6
|
Amortization of
intangible assets acquired in connection with the Jean Coutu Group
acquisition, after taxes
|
13.1
|
|
|
13.1
|
|
|
|
|
Adjusted net
earnings(1)
|
418.9
|
1.72
|
|
392.4
|
1.57
|
|
6.8
|
9.6
|
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 April 1,
2022, the Corporation has repurchased 2,350,000 Common Shares at an
average price of $66.51, for a total
consideration of $156.3 million.
DIVIDENDS
On April 20, 2022, the Board of
Directors declared a quarterly dividend of $0.275 per share, the same amount declared last
quarter.
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. Expression such as "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)
At the start of the third quarter, most government measures to
curb the pandemic had been lifted, but the ancillary impacts on our
industry are ongoing. We continue to face higher than normal
inflationary pressures and labour shortages which, if prolonged,
could put pressure on margins. In the short term, we expect food
sales to remain relatively stable versus last year while we expect
continued growth in our pharmacy business although somewhat
moderated versus the first half of the year. The labour conflict
with our full-time distribution center employees in Toronto, which started on April 2, 2022, was resolved seven days later with
the ratification of a new four-and-a-half-year collective
agreement. Our third quarter results will be impacted by the direct
costs of the strike and the impact of the new labour agreement,
estimated at about $10 million
pre-tax.
CONFERENCE CALL
Financial analysts and institutional investors are invited to
participate in a conference call for the 2022 second
quarter results at 9:00 a.m.
(EDT) today, April 21,
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.
second 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 Second
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.