* Q1 EPS C$1.23 vs C$1.01 year earlier
* Sales rise 2.7 percent to C$2.70 billion
* Same-store sales up 1.5 percent
Jan 29 Shares of Canada's Metro Inc
slipped on Tuesday after the supermarket and drugstore chain
warned of tough economic conditions and rising competition,
despite reporting higher quarterly profits.
The chain, which is bracing for the opening of the first
Target Corp stores north of the border this spring,
posted higher earnings on rising sales and profit margins. It
pointed out that the timing of its fiscal first quarter ended
Dec. 22 flattered the results. Unlike the comparable quarter a
year earlier, the latest period included most of the final week
of the Christmas shopping season.
Shares of Metro, which operates more than 600 food stores and
more than 250 drugstores in Canada, slipped more than 1 percent
even though Metro announced a 16 percent increase in its
quarterly dividend after the market closed on Tuesday.
In a statement accompanying the results, Chief Executive
Eric La Fleche said the current economic environment was
"challenging" and consumers were cautious.
Along with rivals such as Loblaw Cos Ltd, Metro is
facing rising competition as Wal-Mart Stores Inc expands
its grocery offerings in Canada. Target Corp, the No. 2
U.S. discounter, will also sell groceries when it begins opening
its first 124 Canadian stores in March or April.
Metro's net earnings rose to C$121.4 million ($120.9
million), or C$1.23 a share, from C$103.7 million, or C$1.01, a
year earlier. Sales rose 2.7 percent to C$2.70 billion.
Analysts had expected earnings of C$1.15 on sales of C$2.76
billion, according to Thomson Reuters I/B/E/S.
Sales at established stores, an important indicator for
retailers, rose 1.5 percent in the fiscal first quarter.
Late on Monday, the Montreal-based firm declared a dividend
of 25 Canadian cents a share, up from 21.5 Canadian cents last
NO DEAL HINTS
Last week, Metro said it would sell nearly half its stake in
Alimentation Couche-Tard Inc, a convenience store and
gasoline station operator, for nearly C$479 million.
Safeway Inc's stock jumped after the announcement,
as investors bet that Metro might consider buying the U.S.-based
grocery chain's Canadian operations.
But Tuesday's release offered no information on how Metro
might use the proceeds from the sale of the Couche-Tard stake.
In its initial statement, La Fleche said Metro made the
decision based on Couche-Tard's market value. The stock had
risen more than 60 percent over 12 months.
"We are evaluating opportunities for the use of proceeds,
including investments for growth and returns to shareholders,"
he said at the time.
Metro's stock was down 1.3 percent at C$63.32 on Tuesday
afternoon on the Toronto Stock Exchange.