2022 THIRD QUARTER HIGHLIGHTS
- Sales of
$5,865.5 million , up 2.5% - Food same-store sales up 1.1%
- Pharmacy same-store sales up 7.2%
- Net earnings of
$275.0 million , up 9.0% and adjusted net earnings(1) of$283.8 million , up 8.7% - Fully diluted net earnings per share of
$1.14 , up 10.7%, and adjusted fully diluted net earnings per share(1)
of$1.18 , up 11.3%
16 weeks / Fiscal Year | ||||||
(Millions of dollars, except for net earnings per share) | 2022 | % | 2021 | % | Change (%) | |
Sales | 5,865.5 | 100.0 | 5,719.8 | 100.0 | 2.5 | |
Operating income before depreciation | 565.1 | 9.6 | 533.6 | 9.3 | 5.9 | |
Net earnings | 275.0 | 4.7 | 252.4 | 4.4 | 9.0 | |
Fully diluted net earnings per share | 1.14 | — | 1.03 | — | 10.7 | |
Adjusted net earnings(1) | 283.8 | 4.8 | 261.2 | 4.6 | 8.7 | |
Adjusted fully diluted net earnings per share(1) | 1.18 | — | 1.06 | — | 11.3 | |
40 weeks / Fiscal Year | ||||||
(Millions of dollars, except for net earnings per share) | 2022 | % | 2021 | % | Change (%) | |
Sales | 14,456.3 | 100.0 | 14,191.0 | 100.0 | 1.9 | |
Operating income before depreciation | 1,403.2 | 9.7 | 1,328.9 | 9.4 | 5.6 | |
Net earnings | 680.8 | 4.7 | 631.7 | 4.5 | 7.8 | |
Fully diluted net earnings per share | 2.81 | — | 2.54 | — | 10.6 | |
Adjusted net earnings(1) | 702.7 | 4.9 | 653.6 | 4.6 | 7.5 | |
Adjusted fully diluted net earnings per share(1) | 2.90 | — | 2.63 | — | 10.3 |
"We are pleased with the performance of our food and pharmacy businesses in the third quarter, which was achieved in a challenging operating environment with increasing inflationary pressures as well as ongoing labor shortages that are impacting the supply chain and our operations. I want to thank our teams who strive to deliver the best value possible to customers in these inflationary times with our multiple formats, effective promotional strategies and strong private label offering. Finally, we are on track with our supply chain modernization program as the transition to our fully automated frozen food distribution center in
SALES
Sales in the third quarter of Fiscal 2022 remained strong, reaching
Sales in the first 40 weeks of Fiscal 2022 totalled
OPERATING INCOME BEFORE DEPRECIATION AND AMORTIZATION
This earnings measurement excludes financial costs, taxes, depreciation and amortization.
Operating income before depreciation and amortization for the third quarter of Fiscal 2022 totalled
Gross margin on sales for the third quarter and the first 40 weeks of Fiscal 2022 were 19.8% and 19.9% respectively, the same percentages as the corresponding periods of 2021. A slight decline in our food division margin in the third quarter was compensated by a stronger pharmacy performance. Gross margin for the third quarter of Fiscal 2022 also included
Operating expenses as a percentage of sales for the third quarter of Fiscal 2022 were 10.1% versus 10.5% for the corresponding quarter of 2021 mainly due to the reduction in COVID-related costs. Operating expenses for the third quarter of Fiscal 2022 were impacted by
DEPRECIATION AND AMORTIZATION AND NET FINANCIAL COSTS
Total depreciation and amortization expense for the third quarter of Fiscal 2022 was
Net financial costs for the third quarter of Fiscal 2022 were
INCOME TAXES
The income tax expense of
NET EARNINGS AND ADJUSTED NET EARNINGS(1)
Net earnings for the third quarter of Fiscal 2022 were
Net earnings for the first 40 weeks of Fiscal 2022 were
Net earnings adjustments(1)
16 weeks / Fiscal Year | ||||||||
2022 | 2021 | Change (%) | ||||||
(Millions of | Fully diluted | (Millions of | Fully diluted (Dollars) | Net earnings | Fully | |||
Net earnings | 275.0 | 1.14 | 252.4 | 1.03 | 9.0 | 10.7 | ||
Amortization of intangible assets acquired in | 8.8 | 8.8 | ||||||
Adjusted net earnings(1) | 283.8 | 1.18 | 261.2 | 1.06 | 8.7 | 11.3 |
40 weeks / Fiscal Year | ||||||||
2022 | 2021 | Change (%) | ||||||
(Millions of | Fully diluted | (Millions of | Fully diluted | Net earnings | Fully | |||
Net earnings | 680.8 | 2.81 | 631.7 | 2.54 | 7.8 | 10.6 | ||
Amortization of intangible assets acquired in | 21.9 | 21.9 | ||||||
Adjusted net earnings(1) | 702.7 | 2.90 | 653.6 | 2.63 | 7.5 | 10.3 |
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
DIVIDENDS
On
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)
We continue to face higher than normal inflationary pressures and labor shortages, and it is difficult to predict how long this situation will last. If prolonged, this environment could put pressure on margins. In the short term, we expect same-store food sales to grow at a higher rate than in recent quarters as we are now cycling periods last year without significant pandemic restrictions. On the pharmacy side, we expect growth in prescriptions to moderate versus year-to-date levels given the high number of visits to physicians in the fourth quarter last year. We also expect front of store revenues to remain strong, namely driven by over-the-counter product sales.
Financial analysts and institutional investors are invited to participate in a conference call for the 2022 third quarter results at
Notice to readers: METRO INC. third 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 - Investors - 2022 Quarterly Results - 2022 Third Quarter Results.
(1) See table on "Net earnings adjustments" and section on "Non-IFRS Measurements" | |
(2) See section on "Forward-looking Information" | |
SOURCE
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