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1. Company Snapshot

1.a. Company Description

Metro Inc.operates as a retailer, franchisor, distributor, and manufacturer in the food and pharmaceutical sectors in Canada.It operates supermarkets and discount stores that provide fresh and grocery products, baked goods, prepared foods, meats, dairy products, fruits and vegetables, frozen foods, bakery products, and pastries, as well as Mediterranean and Middle Eastern products.


As of September 25, 2021, the company operated a network of approximately 963 food stores under various banners, including Metro, Metro Plus, Super C, and Food Basics, Adonis, and Premiere Moisson as well as approximately 649 drugstores primarily under the Jean Coutu, Brunet, Metro Pharmacy, and Food Basics Pharmacy banners.It also manufactures generic drugs; and provides online grocery shopping services.Metro Inc.


was founded in 1947 and is headquartered in Montréal, Canada.

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1.b. Last Insights on MRU

Metro Inc.'s recent performance was driven by strong Q1 2025 earnings, with a 2.9% sales increase and a 10.4% dividend hike. The company navigated inflation and currency challenges, indicating its resilience. Additionally, the appointment of Nicolas Amyot as Chief Financial Officer, effective April 18, 2025, suggests a smooth succession plan and reinforces investor confidence. The significant retail investor ownership (57%) also implies that key decisions are influenced by the retail investors' perspective. Furthermore, the company's recent dividend increase, to CA$0.37, is a positive signal to shareholders.

1.c. Company Highlights

2. Metro Inc. Delivers Solid Q4 2025 Results

Metro Inc. reported a robust Q4 2025, with total sales reaching $5.1 billion, a 3.4% increase from the previous year. Food same-store sales grew 1.6%, while pharmacy same-store sales grew 4.8%. Gross margin expanded to 20% of sales, up from 19.7% in Q4 2024. Adjusted net earnings were $246 million, up 8.6% from the previous year, with EPS coming in at $1.13, slightly below estimates of $1.18. EBITDA was $485 million, up 5.5% year-over-year.

Publication Date: Nov -20

📋 Highlights
  • Total Sales Growth:: Q4 2025 sales reached $5.1 billion, a 3.4% year-over-year increase.
  • Pharmacy Sales Outperform:: Pharmacy same-store sales grew 4.8%, driven by prescription and clinical services demand.
  • Gross Margin Expansion:: Margins rose 23 basis points to 20%, supported by distribution center efficiencies.
  • EBITDA & Earnings Growth:: EBITDA hit $485 million (+5.5%) and adjusted net earnings rose 8.6% to $246 million.
  • New Store Expansion:: Opened 14 food and 9 discount stores in 2025, with 12 new discount stores planned for 2026.

Operational Highlights

The company saw continued growth in pharmacy sales, driven by strong prescription sales and clinical services. Food sales growth was driven by new store openings and conversions. Online sales grew 19.8% in the quarter. The company opened 14 food stores and 9 discount stores in fiscal 2025, with plans for a dozen new discount stores in fiscal 2026. Capital expenditures were $511 million, down from $580 million in fiscal 2024.

Challenges and Outlook

The Toronto freezer distribution center shutdown had an after-tax financial impact of $22.5 million in Q4 and is expected to impact Q1 2026 earnings by $15-20 million. Operations at the freezer DC resumed on November 10. The company expects similar trends in Q1 2026, with food same-store sales and pharmacy sales growth continuing. They are focused on realizing efficiency gains and executing their plan to accelerate discount banner growth.

Valuation and Growth Prospects

With a P/E Ratio of 21.17 and an EV/EBITDA of 12.6, the stock appears reasonably valued. The company's ROE of 14.4% and ROIC of 8.93% indicate strong profitability. Analysts estimate next year's revenue growth at 3.4%. The company expects above 1% to 1.4% net square footage growth for fiscal '26, indicating continued expansion. The Jean Coutu network is well-positioned to capture growing demand for professional services, providing a potential growth driver.

Risk Factors

Same-store sales growth and gross margin dollars may be impacted when GLP-1s go generic. Additionally, the company incurred $15 million to $20 million in costs related to freezer issues in Q1, partly due to transportation costs. However, the company is still negotiating an insurance claim and hopes to recover most or all of the direct and indirect inventory hit.

3. NewsRoom

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Metro Brings Nutrition Home for the Holiday

Dec -01

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Metro (TSX:MRU): Assessing Valuation as Shares Regain Momentum

Nov -20

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Individual investors account for 59% of Metro Inc.'s (TSE:MRU) ownership, while institutions account for 41%

Nov -20

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Price-conscious Canadians drive sales at Metro discount stores, outpacing conventional grocery

Nov -19

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Metro Inc (MTRAF) Q4 2025 Earnings Call Highlights: Strong Sales Growth Amid Operational Challenges

Nov -19

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METRO REPORTS 2025 FOURTH QUARTER RESULTS

Nov -19

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METRO Inc. to Release 2025 Fourth Quarter Results

Oct -21

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CPP Investments Welcomes New Director to its Board

Oct -17

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.65%)

6. Segments

Food and Pharmaceutical

Expected Growth: 4.65%

Metro Inc.'s Food segment growth of 4.65% is driven by increasing demand for private label products, expansion of e-commerce capabilities, and strategic store renovations. The Pharmaceutical segment benefits from an aging population, increased generic drug sales, and the company's diversified retail pharmacy network.

7. Detailed Products

Food Basics

Discount grocery stores offering a wide range of products at lower prices

Metro

Conventional grocery stores offering a wide range of products and services

Super C

Discount grocery stores offering a wide range of products at lower prices

Food Markets

Upscale grocery stores offering a wide range of gourmet and specialty products

Pharmacies

In-store pharmacies offering health and wellness products and services

Liquor Stores

Specialty stores offering a wide range of wine, beer, and spirits

8. Metro Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Metro Inc. faces moderate threat from substitutes due to the presence of alternative grocery stores and online shopping platforms.

Bargaining Power Of Customers

Metro Inc. has a large customer base, but customers have low switching costs, giving them significant bargaining power.

Bargaining Power Of Suppliers

Metro Inc. has a diverse supplier base, and suppliers have limited bargaining power due to the company's large scale of operations.

Threat Of New Entrants

The grocery retail industry has high barriers to entry, making it difficult for new entrants to compete with established players like Metro Inc.

Intensity Of Rivalry

The grocery retail industry is highly competitive, with many established players competing for market share, leading to a high intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 38.87%
Debt Cost 4.17%
Equity Weight 61.13%
Equity Cost 4.17%
WACC 4.17%
Leverage 63.58%

11. Quality Control: Metro Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Weston

A-Score: 6.8/10

Value: 8.0

Growth: 7.0

Quality: 4.1

Yield: 4.0

Momentum: 7.5

Volatility: 10.0

1-Year Total Return ->

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Village Super Market

A-Score: 6.7/10

Value: 7.4

Growth: 4.9

Quality: 4.7

Yield: 7.0

Momentum: 8.5

Volatility: 7.7

1-Year Total Return ->

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Laureate Education

A-Score: 6.5/10

Value: 3.9

Growth: 5.6

Quality: 7.1

Yield: 5.0

Momentum: 10.0

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
Metro

A-Score: 6.2/10

Value: 4.7

Growth: 6.6

Quality: 5.1

Yield: 3.0

Momentum: 8.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Albertsons

A-Score: 6.0/10

Value: 7.2

Growth: 5.4

Quality: 3.5

Yield: 8.0

Momentum: 3.5

Volatility: 8.3

1-Year Total Return ->

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Sprouts Farmers Market

A-Score: 4.5/10

Value: 4.8

Growth: 8.1

Quality: 5.5

Yield: 0.0

Momentum: 4.0

Volatility: 4.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

99.83$

Current Price

99.83$

Potential

-0.00%

Expected Cash-Flows