Metro Inc. expects to continue to benefit from COVID-19 thanks to strong sales and decreasing coronavirus-related costs as the grocer recently ended its temporary wage bump for employees who worked through the early days of the pandemic.
The grocery retailer’s same-store sales, a key retail metric, for the first four weeks of its current quarter were up about 10 percent at food stores. In its pharmacies, front-door same-store sales were up more than six percent.
“Those are healthy numbers,” said CEO Eric La Fleche during a conference call with analysts Wednesday after the company reported its third-quarter financial results.
Same-store sales for the completed third quarter were up 15.6 percent at food stores and down 2.5 percent in front-door sales at pharmacies.
Meanwhile, additional costs related to operating during COVID-19 started to fall.
The company spent an additional $107 million in COVID-19 related expenses during the three months ended July 4. About half of that came from a temporary wage increase and bonus for its essential workers that has since ended, while the remainder was spent on things such as cleaning, signage and personal protection equipment.
Metro, along with competitors Loblaw Companies Ltd. and Sobeys Inc., announced in June their temporary wage increases would end June 13. Metro was paying workers a $2 hourly premium starting March 8. It offered full-time employees an additional $200 bonus and part-time workers $100 bonus when the extra pay program ended.
The major grocers’ decision to stop paying their workers simultaneously faced criticism and executives from each company were called before the House of Commons standing committee on industry, science and technology in July. La Fleche and his colleagues said each made their move independently.
“If you assume that half (of the $107 million) is the temporary wage increase, you can assume that half is remaining,” said chief financial officer Francois Thibault.
That remaining half is about $13 million every four weeks, he said. However, since some expenses are now behind the company, such as purchasing protective shields and donations, he expects that figure to be around $10 million to $12 million every four weeks going forward.
The Montreal-based company reported a $263.5-million profit in its latest quarter, up from $222.4 million a year ago, with sales rising more than 10 percent as more Canadians cooked at home due to the pandemic.
The profit amounted to $1.04 per share for the 16-week period, up from 86 cents per share a year ago.
Sales totalled $5.84 billion, up from $5.23 billion.
On an adjusted basis, Metro earned $1.08 per share for what was the company’s third quarter, up from an adjusted profit of 90 cents per share a year ago.
Analysts on average had expected an adjusted profit of $1.07 per share, according to financial markets data firm Refinitiv.
In its outlook, Metro said it was impossible to predict how long the pandemic will continue or what it would mean for long-term shopping patterns.
Aleksandra Sagan, The Canadian Press
