Profits at Metro surge as grocery chain sees higher sales

Grocery chain Metro Inc. says its profits surged in its latest quarter, fuelled by higher sales.

In the quarter ended July 1, the grocery and drug store retailer says net earnings skyrocketed 26 per cent to $346.7 million from $275 million a year earlier.

Metro says the massive gains in its third quarter are due in part to a tax benefit after the Canada Revenue Agency granted capital losses to the company that had previously been disallowed.

Nonetheless, adjusted net earnings rose 11 per cent to $314.8 million last quarter from $283.8 million the year before, while adjusted fully diluted net earnings leaped 14 per cent to $1.35 per share from $1.18 per share.

Analysts had expected adjusted net earnings of $1.29 per share, according to financial markets data firm Refinitiv.

The Montreal-based company says sales increased by 10 per cent to $6.43 billion from $5.87 billion a year prior, boosted by same-store sales growth of nine per cent.

The hefty third-quarter earnings come as Metro grocery store workers in the Greater Toronto Area continue to strike, nearly two weeks after the 3,700 front-line employees walked off the job over wage issues amid rapid inflation of the same groceries they sell daily.