MONTRÉAL, Jan. 27, 2026 /CNW/ - METRO INC. (TSX: MRU) today announced its results for the first quarter of Fiscal 2026 ended December 20, 2025.

2026 FIRST QUARTER HIGHLIGHTS

• Sales of $5,285.8 million, up 3.3%
• Food same-store sales⁽¹⁾ up 1.6% and up 1.9% when adjusting for the Christmas shift⁽³⁾
• Pharmacy same-store sales⁽¹⁾ up 3.9%
• Net earnings of $226.3 million, down 12.8% and adjusted net earnings⁽¹⁾ of $248.7 million, up 1.3%
• Fully diluted net earnings per share of $1.05, down 9.5% and adjusted fully diluted net earnings per share⁽¹⁾ of $1.16, up 5.5%
• Earnings adjusted for the negative impact of $15.9 million ($21.6 million before taxes) for the direct costs related to the temporary shutdown of our frozen food distribution centre in Toronto
• Declared dividend of $0.4075 per share, up 10.1% versus last year

PRESIDENT'S MESSAGE

"We delivered sales and earnings per share growth in a challenging operating environment, marked by the temporary closure of our freezer in Toronto and persistent food inflation. We are pleased with our new discount store openings and our growing market share in a very competitive market. Our teams are committed to provide the best value possible to our customers and we are confident that our diversified business model, sustained investments in our retail networks and strong execution will continue to deliver long term growth for our shareholders⁽²⁾.", declared Eric La Flèche, President and Chief Executive Officer.

OPERATING RESULTS

SALES

Sales in the first quarter of Fiscal 2026 ended on December 20, 2025 were $5,285.8 million, up 3.3% versus the first quarter of the prior year which ended on December 21, 2024. Sales were negatively impacted by the transfer of one significant pre-Christmas shopping day to the second quarter this year and by the temporary shutdown of our frozen food distribution centre in Toronto.

Food same-store sales⁽¹⁾ were up 1.6% in the first quarter of Fiscal 2026 (2025 — 1.0%) and up 1.9% when adjusting for the Christmas shift⁽³⁾. Online food sales⁽¹⁾ were up 25.8% versus last year (2025 — 18.6%). Our food basket inflation was below the reported CPI of 4.1% for food purchased from stores. Pharmacy same-store sales⁽¹⁾ were up 3.9% (2025 — 5.1%), with a 5.1% increase in prescription drugs⁽¹⁾ and a 1.3% increase in front-store sales⁽¹⁾, primarily driven by health and beauty and partially offset by a delayed cough and cold season. When adjusting for the Christmas shift⁽³⁾, front-store sales⁽¹⁾ were up 1.7%.

OPERATING INCOME BEFORE DEPRECIATION AND AMORTIZATION

This earnings measurement excludes financial costs, taxes, depreciation and amortization.

Operating income before depreciation and amortization for the first quarter of Fiscal 2026 totalled $482.6 million, or 9.1% of sales, an increase of 0.2% versus the corresponding quarter of Fiscal 2025. The first quarter of 2026 included direct costs of $21.6 million related to the temporary shutdown of our frozen food distribution centre in Toronto.

Gross margin⁽¹⁾ for the first quarter of Fiscal 2026 was 19.7% which is the same percentage as the corresponding quarter of 2025.

Operating expenses as a percentage of sales for the first quarter of Fiscal 2026 were 10.5% versus 10.3% for the corresponding quarter of 2025. Operating expenses as a percentage of sales of the first quarter of Fiscal 2026 were unfavourably impacted by $20.8 million of direct costs related to the temporary shutdown of our frozen food distribution centre in Toronto. Excluding these costs, operating expenses as a percentage of sales for the first quarter of Fiscal 2026 would have been 10.2%.

The asset disposals recognized in the first quarter of 2026 resulted in losses of $1.2 million, including $0.8 million attributable to the mechanical issue at our frozen food distribution centre in Toronto. In the first quarter of 2025, asset disposals had generated gains of $1.7 million.

DEPRECIATION AND AMORTIZATION

Total depreciation and amortization expense for the first quarter of Fiscal 2026 was $143.6 million versus $133.6 million for the corresponding quarter of 2025. The increase in depreciation and amortization expense is mainly due to the increase in the retail investments, including right-of-use assets, and the commissioning of investments in our supply chain, including some automation technology in the Pharmacy division.

NET FINANCIAL COSTS

Net financial costs for the first quarter of Fiscal 2026 were $37.3 million compared with $30.7 million in the corresponding quarter of 2025. The increase in financial costs is mainly due to the recording in 2025 of interest receivable of $4.2 million regarding the resolution of a tax position related to prior years, and higher interest expense on net debt.

INCOME TAXES

The income tax expense of $75.4 million for the first quarter of Fiscal 2026 represented an effective tax rate of 25.0% compared with an income tax expense of $57.7 million and an effective tax rate of 18.2% for the first quarter of Fiscal 2025. The increase in the effective tax rate in 2026 is mainly attributable to the resolution of an income tax position related to prior years of $20.6 million in the first quarter of fiscal 2025 and a provincial tax holiday on a large investment project of $4.9 million for the first quarter of Fiscal 2026 compared with $6.1 million for the corresponding quarter of 2025.

NET EARNINGS AND ADJUSTED NET EARNINGS⁽¹⁾

Net earnings for the first quarter of Fiscal 2026 were $226.3 million compared with $259.5 million for the corresponding quarter of 2025, while fully diluted net earnings per share were $1.05 compared with $1.16 in 2025, down 12.8% and 9.5% respectively. Excluding the specific items shown in the table below, adjusted net earnings⁽¹⁾ for the first quarter of Fiscal 2026 totalled $248.7 million compared with $245.4 million for the corresponding quarter of 2025, and adjusted fully diluted net earnings per share⁽¹⁾ for the first quarter of Fiscal 2026 were $1.16, versus $1.10 in 2025, up 1.3% and 5.5% respectively.

Net earnings and fully diluted net earnings per share (EPS) adjustments⁽¹⁾

NORMAL COURSE ISSUER BID PROGRAM

Under the current normal course issuer bid program, the Corporation may repurchase up to 10,000,000 of its Common Shares between November 27, 2025 and November 26, 2026. As at January 16, 2026, the Corporation has repurchased 1,000,000 Common Shares at an average price of $98.72, for a total consideration of $98.7 million.

DIVIDENDS

On January 26, 2026, the Board of Directors declared a quarterly dividend of $0.4075 per share, an increase of 10.1% versus last year's quarterly dividend.

FORWARD-LOOKING INFORMATION

We have used, throughout this report, different statements that could, within the context of regulations issued by the Canadian Securities Administrators, be construed as being forward-looking information. In general, any statement contained herein that does not constitute a historical fact may be deemed a forward-looking statement. Expressions such as "continue", "believe", "plan" and other similar expressions are generally indicative of forward-looking statements. The forward-looking statements contained herein are based upon certain assumptions regarding the Canadian food and pharmaceutical industries, the general economy, our annual budget, as well as our 2026 action plan.

These forward-looking statements do not provide any guarantees as to the future performance of the Corporation and are subject to potential risks, known and unknown, as well as uncertainties that could cause the outcome to differ significantly. Risk factors that could cause actual results or events to differ materially from our expectations as expressed in, or implied by, our forward-looking statements are described and discussed under the "Risk Management" section in our Annual Report 2025.

We believe these statements to be reasonable and pertinent as at the date of publication of this report and represent our expectations. The Corporation does not intend to update any forward-looking statement contained herein, except as required by applicable law.

NON-GAAP AND OTHER FINANCIAL MEASUREMENTS

In addition to the International Financial Reporting Standards (IFRS) measurements provided, we have included certain non-GAAP and other financial measurements. These measurements are presented for information purposes only. They do not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similar measurements presented by other public companies.

National Instrument 52-112 Non-GAAP and Other Financial Measures Disclosure sets out specific disclosure requirements for non-GAAP financial measures, non-GAAP ratios, and other financial measures, which are capital management measures, supplementary financial measures, and total of segments measures, as defined in the Instrument (together the "specified financial measures").

The specified financial measures we disclose in our documents made available to the public are presented by measurement categories below.

NON-GAAP FINANCIAL MEASURES

Adjusted earnings before net financial costs and income taxes is a non-GAAP financial measurement that, with respect to its composition, is adjusted to exclude net financial costs and special items from the composition of the most directly comparable financial measure disclosed in our consolidated financial statements, which is earnings before income taxes. Special items may include acquisition and restructuring charges, gains or losses on the disposal of investments, and amortization and impairment losses of intangible assets resulting from a business acquisition.

Adjusted net earnings is a non-GAAP financial measurement that, with respect to its composition, is adjusted to exclude special items from the composition of the most directly comparable financial measure disclosed in our consolidated financial statements, which is net earnings. Special items may include acquisition and restructuring charges, gains or losses on the disposal of investments, amortization and impairment losses of intangible assets resulting from a business acquisition, and significant prior-year tax adjustments.

For measurements depicting financial performance, we believe that presenting earnings adjusted for these items, which are not necessarily reflective of the Corporation's performance, leaves readers of financial statements better informed thus enabling them to better perform trend analysis, evaluate the Corporation's financial performance and assess its future outlook. Adjusting for these items does not imply that they are non-recurring.

NON-GAAP RATIOS

Adjusted fully diluted net earnings per share is a non-GAAP ratio in which a non-GAAP financial measure is used as one or more of its components. The non-GAAP component used is adjusted net earnings⁽¹⁾. Adjusted fully diluted net earnings per share is calculated by dividing the adjusted net earnings⁽¹⁾ attributable to equity holders of the parent by the weighted average number of Common Shares outstanding during the year, adjusted to reflect all potential dilutive shares.

We believe that presenting this ratio, in which a non-GAAP financial measurement is used as one or more of its components, leaves readers of financial statements better informed as to the current period and corresponding prior year's period's performance, thus enabling them to better perform trend analysis, evaluate the Corporation's financial performance and assess its future outlook. Adjusting for these items does not imply that they are non-recurring.

SUPPLEMENTARY FINANCIAL MEASURES

The supplementary financial measures listed below are, or are intended to be, disclosed on a periodic basis to depict the historical or expected future financial performance, financial position or cash flow of the Corporation.

Food same-store sales are defined as comparable retail sales of stores with more than 52 consecutive weeks of operations, including relocated, expanded and renovated locations. Food same-store sales is a measure based on all stores in our network, including those whose sales are not included in the Corporation's consolidated financial statements.

Online food sales are the sum of sales made from all our online channels.

Pharmacy same-store sales (including total, front-store and prescription drugs) are defined as comparable retail sales of stores with more than 52 consecutive weeks of operations, including relocated, expanded and renovated locations. Pharmacy same-store sales do not form part of the Corporation's consolidated financial statements because the pharmacies are held by pharmacist owners.

Gross margin ratio is calculated by dividing gross profit by sales.

OUTLOOK⁽²⁾

The challenges related to the disruption at our frozen distribution center in Toronto are now behind us and operations have fully resumed. Our focus remains on realizing efficiency gains throughout our supply chain and store network while we continue to execute on our plan to accelerate the development of our growing discount banners with the planned opening of about a dozen new or converted stores in this fiscal year. In the current challenging economic environment, we remain steadfast in our efforts to deliver the best value possible to our customers through our effective merchandising programs, strong private labels, the Moi program, and consistent execution at store level.

CONFERENCE CALL

Financial analysts and institutional investors are invited to participate in a conference call for the 2026 first quarter results at 1:30 p.m. (EST) today, January 27, 2026. To access the conference call, please dial 1 (800) 990-4777. The media and investing public may access this conference via a listen mode only.

Notice to readers: METRO INC. first quarter of 2026 interim condensed consolidated financial statements and management's discussion and analysis are available on the Internet at www.corpo.metro.ca - Corporate Site - Investors - 2026 Quarterly Results - 2026 First Quarter Results.

SOURCE METRO INC.