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Metro's Q1 Earnings Up, Sales Dip

MONTREAL -- Retailer Metro, Inc. here reported net earnings of CAN $69.7 million (US $103 million) in the first quarter of 2008, up 2.7 percent from CAN $67.9 million (US $100.3 million) in the year-ago period, and fully diluted net earnings per share of 61 cents, an increase of 5.2 percent from 58 cents last year.

Meanwhile, sales for the quarter came to CAN $2,506.8 million (US $3,703.7 million), a decline of 0.3 percent vs. fiscal 2007 first-quarter sales of CAN $2,515 million (US $3,716 million). Excluding lower sales of tobacco products, 2008 first-quarter sales would have increased 0.3 percent, according to the company. Same-store sales were flat.

"A more intense competitive environment as well as the training and learning curve associated with our new information systems in Ontario and our new food services warehouse weakened our results," said Metro president and c.e.o. Pierre H. Lessard in a statement. "We expect that the issues related to our information systems in Ontario and our food services warehouse will be behind us in the next few months, and are confident that our results will improve."

Despite the sales downturn, the company described its financial position at the end of the first quarter of 2008 as "very solid," with an unused approved CAN $375.2 million (US $554.4 million) line of credit and a debt ratio (long-term debt/total capital) of 34.8 percent

Over the quarter Metro invested CAN $50.7 million (US $74.9 million) in its retail network for a net expansion of 108,000 square feet, or 0.6 percent. During that time period the company completed 10 major store renovations and expansions, and opened three new stores.

In other Metro news, Lessard will become executive chairman of the grocer’s board of directors on April 15.

"The company truly benefits from his dynamic nature and his unrivalled experience," said board chairman Maurice Jodoin, who is leaving his position on the same date. Jodoin, who has been chairman since 2000 and a director since 1987, was one of the first independent directors elected to Metro's board.

Also on April 15, Pierre Brunet, chairman of the board of the Caisse de depot et placement du Québec and a director of Metro since 2001, will become lead director, and Eric R. La Flèche, who, as earlier announced, will become Metro's c.e.o., will be appointed to the board.

With over 65,000 employees, Metro operates nearly 600 supermarkets in Ontario and Québec under the Metro, Metro Plus, Super C, A&P, Dominion, Loeb and Food Basics banners, as well as more than 250 pharmacies under the Brunet, Clini Plus, The Pharmacy, and Drug Basics banners.
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