2021 THIRD QUARTER HIGHLIGHTS
- Sales of
$5,719.8 million , down 2.0%, and up 9.4% vs 2019 - Food same-store sales down 3.6%, and up 11.4% vs 2019
- Pharmacy same-store sales up 7.6%, and up 8.6% vs 2019
- Net earnings of
$252.4 million , down 4.2% and adjusted net earnings(1) of$261.2 million , down 4.1% - Fully diluted net earnings per share of
$1.03 , down 1.0%, and adjusted fully diluted net earnings per share(1) of$1.06 , down 1.9% - Expenses related to COVID-19 totalling
$38 million , including$8 million of gift cards to front-line employees - Transition to new
Ontario fresh distribution center completed, adding$8 million of non-recurring costs
16 weeks / Fiscal Year | |||||||||||
(Millions of dollars, except for net earnings per share) | 2021 | % | 2020 | % | Change (%) | ||||||
Sales | 5,719.8 | 100.0 | 5,835.2 | 100.0 | (2.0) | ||||||
Operating income before depreciation and amortization | 533.6 | 9.3 | 542.9 | 9.3 | (1.7) | ||||||
Adjusted operating income before depreciation and amortization(2) | 533.6 | 9.3 | 542.9 | 9.3 | (1.7) | ||||||
Net earnings | 252.4 | 4.4 | 263.5 | 4.5 | (4.2) | ||||||
Fully diluted net earnings per share | 1.03 | — | 1.04 | — | (1.0) | ||||||
Adjusted net earnings(1) | 261.2 | 4.6 | 272.3 | 4.7 | (4.1) | ||||||
Adjusted fully diluted net earnings per share(1) | 1.06 | — | 1.08 | — | (1.9) | ||||||
40 weeks / Fiscal Year | |||||||||||
(Millions of dollars, except for net earnings per share) | 2021 | % | 2020 | % | Change (%) | ||||||
Sales | 14,191.0 | 100.0 | 13,853.9 | 100.0 | 2.4 | ||||||
Operating income before depreciation and amortization | 1,328.9 | 9.4 | 1,280.1 | 9.2 | 3.8 | ||||||
Adjusted operating income before depreciation and amortization(2) | 1,328.9 | 9.4 | 1,287.6 | 9.3 | 3.2 | ||||||
Net earnings | 631.7 | 4.5 | 609.9 | 4.4 | 3.6 | ||||||
Fully diluted net earnings per share | 2.54 | — | 2.40 | — | 5.8 | ||||||
Adjusted net earnings(1) | 653.6 | 4.6 | 636.0 | 4.6 | 2.8 | ||||||
Adjusted fully diluted net earnings per share(1) | 2.63 | — | 2.50 | — | 5.2 |
PRESIDENT'S MESSAGE
"We are pleased with the solid results of our third quarter considering we cycled exceptionally strong sales and earnings last year at the height of the pandemic. Our sales and earnings growth over 2019 levels is strong. Despite the challenging operating environment caused by the pandemic, our teams successfully completed three key strategic initiatives during the quarter: the transition to our new automated Fresh distribution center in
OPERATING RESULTS
SALES
Sales in the third quarter of Fiscal 2021 remained strong, reaching
Sales in the first 40 weeks of Fiscal 2021 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 2021 totalled
Operating income before depreciation and amortization for the first 40 weeks of Fiscal 2021 totalled
Operating income before depreciation and amortization adjustments (OI)(2)
40 weeks / Fiscal Year | |||||||||||||
2021 | 2020 | ||||||||||||
(Millions of dollars, unless otherwise indicated) | OI | Sales | (%) | OI | Sales | (%) | |||||||
Operating income before depreciation and amortization | 1,328.9 | 14,191.0 | 9.4 | 1,280.1 | 13,853.9 | 9.2 | |||||||
Loss on disposal of a subsidiary | — | 7.5 | |||||||||||
Adjusted operating income before depreciation and amortization(2) | 1,328.9 | 14,191.0 | 9.4 | 1,287.6 | 13,853.9 | 9.3 |
Gross margin on sales for the third quarter and the first 40 weeks of Fiscal 2021 were 19.8% and 19.9% respectively, versus 20.0% and 19.8% for the corresponding periods of 2020.
Operating expenses as a percentage of sales for the third quarter of Fiscal 2021 were 10.5% versus 10.7% for the corresponding quarter of 2020. COVID-19 related expenses for the third quarter of Fiscal 2021 were approximately
For the first 40 weeks of Fiscal 2021, operating expenses as a percentage of sales were 10.5% versus 10.6% (10.5% excluding the loss on disposal of our meal-kit subsidiary) for the corresponding period of 2020. The costs related to COVID-19 for the first 40 weeks of Fiscal 2021 were approximately
DEPRECIATION AND AMORTIZATION AND NET FINANCIAL COSTS
Total depreciation and amortization expense for the third quarter of Fiscal 2021 was
Net financial costs for the third quarter of Fiscal 2021 were
INCOME TAXES
The income tax expense of
NET EARNINGS AND ADJUSTED NET EARNINGS(1)
Net earnings for the third quarter of Fiscal 2021 were
Net earnings for the first 40 weeks of Fiscal 2021 were
Net earnings adjustments(1)
16 weeks / Fiscal Year | ||||||||||||||
2021 | 2020 | Change (%) | ||||||||||||
(Millions of | Fully diluted | (Millions of | Fully diluted | Net | Fully | |||||||||
Net earnings | 252.4 | 1.03 | 263.5 | 1.04 | (4.2) | (1.0) | ||||||||
Amortization of intangible assets acquired in connection with the acquisition, after taxes | 8.8 | 8.8 | ||||||||||||
Adjusted net earnings(1) | 261.2 | 1.06 | 272.3 | 1.08 | (4.1) | (1.9) |
40 weeks / Fiscal Year | ||||||||||||||
2021 | 2020 | Change (%) | ||||||||||||
(Millions of | Fully diluted | (Millions of | Fully diluted | Net | Fully | |||||||||
Net earnings | 631.7 | 2.54 | 609.9 | 2.40 | 3.6 | 5.8 | ||||||||
Loss on disposal of a subsidiary, after taxes | — | 4.2 | ||||||||||||
Amortization of intangible assets acquired in connection with the acquisition, after taxes | 21.9 | 21.9 | ||||||||||||
Adjusted net earnings(1) | 653.6 | 2.63 | 636.0 | 2.50 | 2.8 | 5.2 |
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
CONTINGENCIES
In the normal course of business, the Corporation is exposed to various contingencies as described in the Corporation's audited annual consolidated financial statements for the fiscal year ended
In
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 2021 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 2020 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(3)
While the COVID-19 related restrictions have been significantly eased over the last few months, it is still uncertain whether we are gradually transitioning to a pre-pandemic environment, or whether we will face further restrictive measures due to a fourth wave of infections. It is also difficult to predict the impact the pandemic will have on the long-term shopping patterns of our customers. With the COVID-19 related restrictions ramping down, we expect our food sales in the short term to continue to decline versus last year's exceptionally high levels, but to compare favourably to pre-pandemic levels. On the pharmacy side, the easing of restrictions should have a positive impact on certain commercial categories that were negatively affected by the pandemic, such as beauty, cosmetics and cold and flu products.
CONFERENCE CALL
Financial analysts and institutional investors are invited to participate in a conference call for the 2021 third quarter results at
Notice to readers: METRO INC. third quarter of 2021 interim condensed consolidated financial statements and management's discussion and analysis are available on the Internet at www.metro.ca - Corporate Site - Investor Relations - 2021 Quarterly Results - 2021 Third Quarter Results.
(1) See table on "Net earnings adjustments" and section on "Non-IFRS Measurements" |
SOURCE
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