METRO reports higher food revenues during COVID-19 pandemic

Food revenues are significantly higher at METRO Inc. amid the COVID-19 pandemic, the company has reported.

Sales in the second quarter of fiscal 2020 reached $3,988.9 million, up 7.8 per cent compared to $3,701.6 million in the second quarter of fiscal 2019.

Adjusted net earnings for the second quarter totalled $182.8 million compared with $155.1 million for the corresponding quarter of fiscal 2019, and adjusted fully diluted net earnings per share amounted to $0.72 versus $0.60.

The company says the last two weeks of the quarter were impacted by the COVID-19 pandemic.

“We are operating in what can only be described as unprecedented times,” the company said in a statement. “We continue to experience significantly higher food revenues due to the COVID-19 pandemic.”

The trend is continuing, as the company notes that in the first four weeks of its third quarter, which ended April 11, food same-store sales were up 25 per cent versus last year.

The company is also experiencing higher operating expenses, namely in terms of labour, safety measures, maintenance and cleaning, the company states.

Pharmacy commercial sales are under pressure, the company states, reflecting the focus on pharmaceutical activities and the safety measures currently in place that, among other things, reduce customer access to stores. In the first period of the third quarter, pharmacy commercial same-store-sales are down nine per cent versus last year, but that metric has trended further down in the most recent weeks.

The company states it will face delays in some investment projects, namely the new automated grocery distribution centres in Ontario, although at this time it is not possible to quantify the length of the delays and their financial impact.

“It is impossible to determine how long this situation will persist, how gradual the return to normalcy will be, and what this new normalcy will even look like,” the company states. “We endeavor to service our customers as best as we can, while providing a safe environment for them and all our employees.

“We will run our store and warehouse operations as efficiently as possible, mitigating the increase in expenses without compromising on health and safety measures.”

Eric La Flèche, president and chief executive officer at METRO, said in the statement that the crisis related to COVID-19 is unprecedented and has solicited all the company’s resources to ensure the safety of its employees and customers, the resilience of its supply chain and its ability to maintain store operations.

“As a leading provider of food and pharmacy products, our teams are fully dedicated to serving the everyday essential needs of our customers safely and responsibly. I want to express my sincere gratitude to all our front-line teams who have shown exceptional dedication since the beginning of the crisis.

“Also, we increased our community investments to provide food and other essentials to those most in need. We do not know how long this crisis will last but we will continue to serve our customers as best as we can, making the health and safety of our teams and customers our top priority.”