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MONTREAL -- Metro, Inc., Canada's third-biggest supermarket chain and the buyer of A&P Canada in July, posted lower first-quarter profit on Tuesday, due to rationalization and integration costs related to the purchase. The grocer reported earnings of C$32 million (US$27.8 million), or 28 Canadian cents a share, vs. of C$38.6 million (US$33.5 million), or 40 Canadian cents in the year-ago period.
"During the first quarter, we continued the evaluation of our integration and rationalization plan following the acquisition of A&P Canada," the company said in a statement. "We have identified three main lines, namely stores and distribution centers, common services, and implementing our information systems at A&P Canada. Regarding Ontario stores, we expect to convert some stores to different banners and to close a few others. We will also streamline both common services shared by Quebec and Ontario operations, and our distribution centers' operations."
The retailer incurred C$18.3 million (US$15.9 million) in charges connected with the A&P Canada acquisition for C$1.2 billion in cash (US$1.0 billion) and C$500 million (US$434.2 million) in shares. Metro expects to rack up integration costs of C$55 million over the next two fiscal years.
The company's first-quarter sales came to C$2.5 billion (US$2.2 billion), compared with C$1.45 billion (US$1.26 billion) last year. Its same-store sales grew 0.9 per cent from the year-ago period. Excluding the C$1.07 billion (US$928.9 million) jump in sales from the A&P Canada purchase, Metro's same-store sales increase would have been 0.5 percent.
Metro operates 579 stores in the provinces of Ontario and Quebec.