UPDATE 2-Grocer Metro earnings jump 21 pct, boosts dividend

* Adj EPS C$0.82 vs C$0.76

* EPS C$0.91 vs C$0.73

* Raises quarterly dividend 24 pct

* Shares up 1.6 pct at C$39.77
(Adds background, analyst comments)

TORONTO, Jan 26 (BestGrowthStock) – Metro Inc (MRUa.TO: ), Canada’s
No. 3 grocery chain, raised its quarterly dividend 24 percent
as it reported a sharp jump in quarterly earnings on Tuesday
that topped expectations.

The Montreal-based supermarket chain, which recently
consolidated all of its Ontario stores, including Dominion,
under the Metro banner, said it earned C$98.1 million ($92.5
million), or 91 Canadian cents a share, in its first quarter.

That was up 21 percent from C$81.1 million, or 73 Canadian
cents a share, in the same period a year earlier when it
benefited from rising food prices.

Adjusted earnings, which exclude nonrecurring costs from
the rebranding and tax gains, were C$88.7 million, or 82
Canadian cents a share, up from C$84.1 million, or 76 Canadian
cents a share.

Sales rose 1.7 percent to C$2.65 billion, while EBITDA
jumped 7 percent.

Analysts had expected, on average, earnings of 76 Canadian
cents a share before items and revenue of C$2.64 billion,
according to Thomson Reuters I/B/E/S.

The company boosted its quarterly dividend by 23.6 percent
to 17 Canadian cents.

Metro’s shares were up 1.6 percent at C$39.77 on the
Toronto Stock Exchange.

“Their ability to get slightly higher margins with
virtually no inflation was a very positive development,” said
Bill Chisholm, a retail analyst at MacDougall, MacDougall and
MacTier.

The earnings rise came despite a drop in overall prices for
goods. Food prices had climbed in recent quarters as grocers
passed on rising costs for wheat, rice, vegetables, fruit and
other goods to the consumer, benefiting from wider profit
margins.

But this benefit lessened in recent months as the commodity
prices slipped, dragging retail prices and margins down with
them.

Industry watchers expect a further slowdown in price
increases and that will mean less spectacular earnings growth
for Canada’s big supermarket chains.

Stock Market Advice

($1=$1.06 Canadian)
(Reporting by Scott Anderson; editing by Rob Wilson)

UPDATE 2-Grocer Metro earnings jump 21 pct, boosts dividend