Metro Inc. (MTRAF), a prominent player in Canada’s pharmacy and supermarket sectors, delivered mixed performance in its fourth-quarter 2024 earnings report. Despite a 2.6% decline in total year-over-year sales, which generated $4.94 billion, the company demonstrated strength in key growth areas, including pharmacy sales, online performance and customer loyalty initiatives.
Main achievements in the fourth quarter of 4
Comparable sales growth
- Sales at grocery stores rose 2.2%, while sales at pharmacy stores grew an impressive 5.7%.
- Overall comparable 12-week sales increased 5.7%, reflecting strong consumer demand despite a shorter fiscal year.
Strong online presence
- Online sales increased 27% in a comparable 12-week period, driven by third-party partnerships and expanded click-and-collect services.
Operational efficiency
- Gross margin improved slightly to 19.7%, compared to 19.5% in the same period last year.
- EBITDA increased 2.6% year-on-year to $459.6 million, representing 9.2% of total sales.
- Operating expenses fell to 10.4% of sales, down from 10.7% a year earlier.
Strategic investments and customer commitment
Metro completed its transformative $1 million supply chain modernization project, a seven-year initiative aimed at improving efficiency and capacity. This milestone positions the company for long-term growth and adaptability in an increasingly competitive retail landscape.
The launch of the my rewards The Ontario program was another huge success, with more than one million clients signing up in just four weeks. This rapid adoption underscores Metro’s ability to foster strong customer loyalty through targeted engagement strategies.
On the physical retail front, Metro opened nine new stores, including three Super C conversions, and completed major expansions and renovations at 11 locations, enhancing the in-store shopping experience.
Challenges in the fourth quarter of 4
Despite these achievements, Metro faced several challenges:
- Decrease in total sales: A decrease of 2.6% compared to 2023, partially attributed to the previous fiscal year of 53 weeks.
- Increase in financial costs: Net financial expenses increased to $32.6 million, driven by higher debt levels and interest rates.
- Pressure on profits: Adjusted net earnings fell 1% year over year to $226.5 million, reflecting tight margins in a competitive market.
- E-commerce profitability: While online sales have grown significantly, they remain less profitable than brick-and-mortar operations, impacting overall margins.
Looking to the future
Metro’s ability to balance strategic growth and operational efficiency positions it well for the future. Investments in supply chain infrastructure, online capabilities and customer loyalty programs such as my rewards They are expected to drive further growth.
As Metro continues to expand its presence through new store openings and renovations, it remains focused on overcoming competitive pressures in the food and pharmacy sectors. With strong growth in pharmacy sales and advances in e-commerce, Metro aims to build its resilience and strengthen its market position in the coming years.