Metro (TSX:MRU) sees profit rise 8.6% in Q1. A grocery stock to buy?

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Metro (TSX:MRU) sees profit rise 8.6% in Q1. A grocery stock to buy?

Metro (TSX: MRU) sees profit rise 8.6% in Q1. A grocery stock to buy?
Image source: © 2022 Kalkine Media®

Highlights

  • Stocks of Canadian grocery firm Metro Inc drew investor attention on Tuesday, January 25, after it released its financial results for Q1 FY2022.
  • With a market capitalization of over C$ 15 billion, Metro is one of Canada's largest grocery and pharmacy retailers.
  • The retailer operates outlets under different banners like Metro, Food Basics, Metro Plus etc.

Stocks of Canadian grocery firm Metro Inc drew investor attention on Tuesday, January 25, after it released its financial results for Q1 FY2022.

With a market capitalization of over C$ 15 billion, Metro is one of Canada's largest grocery and pharmacy retailers. The retailer operates outlets under different banners like Metro, Food Basics, Metro Plus etc.

The Montreal-based retail company leverages its supply chain network to serve grocery shops in the locality, thereby acting as a distributor.

Let us discuss Metro's financial performance for the first quarter of fiscal 2022 and its recent stock performance in detail.

Also read: Is SAP stock a buy amid speculations of Saputo acquiring A2 Milk? 

Metro Inc (TSX: MRU) financial performance in Q1 FY2022

Metro Inc, which presently has a price-to-earnings ratio of 19, saw its sales hit C$ 4.27 billion in the latest quarter, indicating a year-over-year (YoY) jump of 0.9 per cent.

The Canadian grocery and pharmacy company earned a net income of C$ 207.7 million in Q1 FY2022, which was 8.6 per cent up from that of C$ 191.2 million in Q1 FY2021, despite inflation pressure and labour conflicts.

On Monday, January 24, Metro's board of directors (BoD) announced a quarterly dividend payout of C$ 0.275 apiece, which was up by 10 per cent YoY.

Metro Inc (TSX: MRU) Q1 FY2021 financial results

 Image source: © 2022 Kalkine Media®

Data source: Metro Inc

Metro Inc stock performance

Metro stock closed at a value of C$ 64.45 apiece on Monday, having catapulted almost 13 per cent in the last one year.

At this level, the grocery stock was down by some six per cent from its 52-week high of C$ 68.34 (December 17, 2021).

Bottomline

Metro Inc has stated that the mounting cost inflationary pressures, including the cost of goods sold (COGS) and labour shortages, in addition to the COVID, has continued to impact the grocery industry.

The Canadian enterprise added that it is "difficult to predict" how these challenging situations could impact its business going forward.

Metro, however, added that it expects its pharmacy sales to increase as it has launched a COVID-19 rapid test distribution network across its store.

Also read: Nuvei (TSX:NVEI) stock in the red: Still a buy?

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