METRO posts record net earnings in the second quarter of 2009



    
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    2009 SECOND QUARTER HIGHLIGHTS

    - Net earnings of $76.3 million, up 41.3%
    - Fully diluted net earnings per share of $0.68, up 41.7%
    - Sales of $2,549.7 million, up 7.5%
    - Same store sales up 7.3%
    - Declared dividend of $0.1375 per share, up 10.0%
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    MONTREAL, April 23 /CNW Telbec/ - METRO INC. realized net earnings of
$76.3 million in the second quarter of fiscal 2009 compared to $54.0 million
in 2008, a 41.3 % increase, and fully diluted net earnings per share of $0.68
compared to $0.48 for the same quarter last year, an increase of 41.7%.
Excluding non-recurring costs of $1.3 million before taxes recorded in the
second quarter of 2009 to convert Ontario supermarkets to the Metro banner,
second quarter adjusted net earnings(1) were $77.2 million, up 43.0% over last
year.
    Adjusted net earnings(1) for the first 24 weeks of 2009 reached $161.3
million versus $116.4 million last year, up 38.6%. Adjusted fully diluted net
earnings per share(1) were $1.44, up 41.2% from $1.02 last year.
    2009 second quarter sales reached $2,549.7 million compared to $2,372.4
million last year, an increase of 7.5%. Excluding decreased sales due to the
non-renewal of a convenience store chain supply contract, 2009 second quarter
sales increased by 8.3%. Same store sales increased by 7.3%.
    "Our strong sales and earnings growth in the second quarter are due to
the efforts of our teams who have implemented effective merchandising programs
and improved the efficiency of our operations. Our Ontario supermarket
conversion plan is on schedule with 89 of 159 stores converted to the Metro
banner as of April 10, 2009 and we are pleased with the results so far.
Despite the difficult economic environment, we are confident that we are
well-positioned to grow(2) our business," stated Eric R. La Flèche, President
and Chief Executive Officer.

    SALES

    2009 second quarter sales reached $2,549.7 million compared to $2,372.4
million last year, an increase of 7.5%. Excluding decreased sales due to the
non-renewal of a convenience store chain supply contract, 2009 second quarter
sales increased by 8.3%. Same store sales increased by 7.3%.
    Sales for the first 24 weeks of 2009 reached $5,150.2 million, up 5.6%
compared to sales of $4,879.2 million for the corresponding period of fiscal
2008. Excluding decreased sales due to the non-renewal of a convenience store
chain supply contract, sales increased by 6.5%.

    EARNINGS BEFORE FINANCIAL COSTS, TAXES, DEPRECIATION AND AMORTIZATION
    (EBITDA)(1)

    Second quarter EBITDA(1) in 2009 was $162.6 million, up 25.0% from $130.1
million for the same quarter last year. Second quarter EBITDA(1) represented
6.4% of sales versus 5.5% last year. Excluding banner conversion costs of $1.3
million recorded in 2009, adjusted second quarter EBITDA(1) represented 6.4%
of sales.
    EBITDA(1) for the first 24 weeks of 2009 was $332.8 million or 6.5% of
sales compared to $272.3 million or 5.6% of sales for the same period last
year. Excluding banner conversion costs of $5.8 million recorded for the first
24 weeks of 2009, adjusted EBITDA(1) represented 6.6% of sales.
    After experiencing difficulties in the first two quarters of 2008, namely
intense competition in Ontario and issues associated with our new information
systems in Ontario and our new Food Services warehouse in Québec, we achieved
a turnaround and saw renewed growth in our EBITDA(1) for the third and fourth
quarters of 2008 and the first two quarters of 2009. This turnaround saw a
marked improvement in our gross margins.
    In the first quarter of 2009, we retrospectively applied a new accounting
standard issued by the Canadian Institute of Chartered Accountants (CICA),
Section 3031 "Inventories", by restating prior periods' financial statements.
Under this new standard, handling and transformation costs are now included in
inventory costs instead of operating expenses. Cost of sales is therefore
higher than in the past, gross margins and operating expenses are lower.
    In quarters where the value of inventories at the beginning is higher
than the value of inventories at the end, as is the case for our second
quarter because of the Holidays, the decrease in inventory reduces EBITDA(1)
by an amount equal to the costs, other than those that are part of the cost of
sales, included in the inventory changes and which used to be included in
operating expenses of prior quarter. The decrease in the 2009 second quarter
EBITDA(1) resulting from the adoption of this new accounting standard was
similar to the decrease in 2008 second quarter EBITDA(1) resulting from the
prior periods' restatements.
    However, in the first quarter of 2009, where the value of inventories at
the end of the quarter was higher than at the beginning, the effect was
reversed. Inventory changes in the third and fourth quarters should not(2) be
significant and so should not(2) materially affect our EBITDA(1). This new
standard should not(2) have a material effect on overall fiscal year results.
    Share of earnings from our investment in Alimentation Couche-Tard for the
second quarter and the first 24 weeks of 2009 were $9.4 million and $20.5
million respectively, compared to $5.2 million and $10.9 million for the
corresponding periods of fiscal 2008. Excluding non-recurring items as well as
share of earnings from our investment in Alimentation Couche-Tard, our
adjusted EBITDA(1) for the second quarter and the first 24 weeks of 2009 were
$154.5 million and $318.1 million respectively or 6.1% and 6.2% of sales
versus $124.9 million or 5.3% of sales for the second quarter of 2008 and
$261.4 million or 5.4% of sales for the 24-week period.


    
    EBITDA(1) Adjustments

                                      12 weeks / Fiscal Year
                                2009                          2008
                 ------------------------------------------------------------
    (Millions of
     dollars,
     unless                             EBITDA/   EBITDA     Sales    EBITDA/
     otherwise      EBITDA     Sales      Sales                        Sales
     indicated)                             (%)                           (%)
    -------------------------------------------------------------------------
    EBITDA           162.6   2,549.7       6.4     130.1   2,372.4       5.5
    Banner
     conversion
     costs             1.3         -                   -         -
    -------------------------------------------------------------------------
    Adjusted EBITDA  163.9   2,549.7       6.4     130.1   2,372.4       5.5
    Share of
     earnings from
     our investment
     in
     Alimentation
     Couche-Tard      (9.4)        -                (5.2)        -
    -------------------------------------------------------------------------
    Adjusted EBITDA
     excluding
     share of
     earnings        154.5   2,549.7       6.1      124.9  2,372.4       5.3
    -------------------------------------------------------------------------
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                                      24 weeks / Fiscal Year
                                2009                          2008
                 ------------------------------------------------------------
    (Millions of
     dollars,
     unless                             EBITDA/   EBITDA     Sales    EBITDA/
     otherwise      EBITDA     Sales      Sales                         Sales
     indicated)                             (%)                           (%)
    -------------------------------------------------------------------------
    EBITDA           332.8   5,150.2       6.5     272.3   4,879.2       5.6
    Banner
     conversion
     costs             5.8         -                   -         -
    -------------------------------------------------------------------------
    Adjusted EBITDA  338.6   5,150.2       6.6     272.3   4,879.2       5.6
    Share of
     earnings from
     our investment
     in
     Alimentation
     Couche-Tard     (20.5)        -               (10.9)        -
    -------------------------------------------------------------------------
    Adjusted EBITDA
     excluding
     share of
     earnings        318.1   5,150.2       6.2     261.4   4,879.2       5.4
    -------------------------------------------------------------------------
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    DEPRECIATION AND AMORTIZATION AND FINANCIAL COSTS

    Total depreciation and amortization expenses for the second quarter and
the first 24 weeks of fiscal 2009 amounted to $42.6 million and $84.2 million
respectively, compared with $39.6 million and $79.7 million for the same
periods last year. Second quarter financial costs totalled $10.8 million in
2009 versus $14.5 million last year, while financial costs for the 24-week
period totalled $23.3 million in 2009 versus $28.5 million last year. Interest
rates for the first 24 weeks of 2009 averaged 4.8% versus 5.4% for the
corresponding period last year.

    INCOME TAXES

    The 2009 second quarter and 24-week period income tax expenses of $32.9
million and $67.9 million represent an effective tax rate of 30.1% for each
period. In 2008, the second quarter and 24-week period were $22.5 million and
$38.2 million respectively and represented effective tax rates of 29.6% and
23.3% respectively. In the first quarter of 2008, we benefited from a tax
expense decrease of $11.4 million. Excluding this decrease, the effective tax
rate for the 2008 24-week period was 30.2%.

    NET EARNINGS

    The 2009 second quarter net earnings were $76.3 million compared to $54.0
million for the corresponding quarter last year, an increase of 41.3%. Fully
diluted net earnings per share rose 41.7% to $0.68 from $0.48 last year.
Excluding non-recurring costs of $1.3 million before taxes recorded in the
second quarter of 2009 to change our Ontario supermarkets to the Metro banner,
our adjusted net earnings(1) were $77.2 million, a 43.0% increase over last
year's.
    This inventory variance between the second quarter opening and closing
balance and the adoption of Section 3031 "Inventories", new accounting policy
from CICA, reduced the EBITDA(1) for the second quarter 2009 and 2008. This
adjustment reduced the second quarter 2009 and 2008 fully diluted net earnings
per share by $0.03 each.
    Net earnings for the first 24 weeks of 2009 reached $157.4 million versus
$127.8 million last year, up 23.2%. Excluding the income tax expense decrease
of $11.4 million in 2008 and banner conversion costs of $5.8 million before
taxes in 2009, adjusted net earnings(1) for the 2009 24-week period were
$161.3 million, up 38.6% from the $116.4 million for the corresponding period
of 2008. Adjusted fully diluted net earnings per share(1) were $1.44, up 41.2%
from $1.02 last year.

    
    Net Earnings Adjustments

                           12 weeks / Fiscal Year
                          2009                2008             Change (%)
                 ------------------------------------------------------------
                 (Millions     Fully (Millions     Fully               Fully
                        of   diluted        of   diluted       Net   diluted
                   dollars)      EPS   dollars)      EPS  earnings       EPS
                            (Dollars)           (Dollars)
    -------------------------------------------------------------------------
    Net earnings      76.3      0.68      54.0      0.48      41.3      41.7
    Banner
     conversion
     costs after
     taxes             0.9         -         -         -
    -------------------------------------------------------------------------
    Adjusted net
     earnings(1)      77.2      0.68      54.0      0.48      43.0      41.7
    -------------------------------------------------------------------------
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                           24 weeks / Fiscal Year
                          2009                2008             Change (%)
                 ------------------------------------------------------------
                 (Millions     Fully (Millions     Fully               Fully
                        of   diluted        of   diluted       Net   diluted
                   dollars)      EPS   dollars)      EPS  earnings       EPS
                            (Dollars)           (Dollars)
    -------------------------------------------------------------------------
    Net earnings     157.4      1.41     127.8      1.12      23.2      25.9
    Banner
     conversion
     costs after
     taxes             3.9      0.03         -         -
    Decrease in
     tax expense         -         -     (11.4)    (0.10)
    -------------------------------------------------------------------------
    Adjusted net
     earnings(1)     161.3      1.44     116.4      1.02      38.6      41.2
    -------------------------------------------------------------------------
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    Quarterly Highlights
    (Millions of dollars,           2009        2008        2007      Change
     unless otherwise indicated)                                          (%)
    -------------------------------------------------------------------------
    Sales
      Q2                         2,549.7     2,372.4           -         7.5
      Q1                         2,600.5     2,506.8           -         3.7
      Q4                               -     2,476.0     2,432.4         1.8
      Q3                               -     3,370.0     3,341.0         0.9
    -------------------------------------------------------------------------
    Net earnings
      Q2                            76.3        54.0           -        41.3
      Q1                            81.1        73.8           -         9.9
      Q4                               -        72.5        58.4        24.1
      Q3                               -        91.9        89.6         2.6
    -------------------------------------------------------------------------
    Adjusted net earnings(1)
      Q2                            77.2        54.0           -        43.0
      Q1                            84.1        62.4           -        34.8
      Q4                               -        72.5        67.6         7.2
      Q3                               -        91.9        91.4         0.5
    -------------------------------------------------------------------------
    Fully diluted net earnings
     per share (Dollars)
      Q2                            0.68        0.48           -        41.7
      Q1                            0.73        0.64           -        14.1
      Q4                               -        0.65        0.50        30.0
      Q3                               -        0.81        0.77         5.2
    -------------------------------------------------------------------------
    Adjusted fully diluted net
     earnings per share(1)
     (Dollars)
      Q2                            0.68        0.48           -        41.7
      Q1                            0.76        0.54           -        40.7
      Q4                               -        0.65        0.58        12.1
      Q3                               -        0.81        0.78         3.8
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    First and second quarter sales for 2009 were up 3.7% and 7.5%
respectively over those for 2008. Excluding decreased sales due to the
non-renewal of a convenience store chain supply contract, 2009 first quarter
sales were up 4.7% and second quarter sales were up 8.3%.
    Sales in the third and fourth quarters of 2008 versus those for the
corresponding quarters of 2007 were affected by increased competition in
Ontario and decreased sales of tobacco products. Excluding the decreased sales
of tobacco products, 2008 third and fourth quarter sales were up 1.5% and 2.1%
respectively over 2007.
    First quarter net earnings and fully diluted net earnings per share for
2009 were up 9.9% and 14.1% respectively over those for 2008. Excluding 2009
first quarter banner conversion costs of $4.5 million before taxes and the
income tax expense decrease of $11.4 million in 2008 as a result of future
federal income tax rate decreases, 2009 first quarter adjusted net earnings(1)
and adjusted fully diluted net earnings per share(1) were up 34.8% and 40.7%
respectively.
    Second quarter net earnings and fully diluted net earnings per share for
2009 were up 41.3% and 41.7% respectively from 2008. Excluding non-recurring
costs of $1.3 million before taxes recorded in the second quarter of 2009,
adjusted net earnings(1) for the second quarter of 2009 were up 43.0%.
    The difficulties encountered in the first two quarters of 2008 stemming
from a more intense competitive environment in Ontario and issues associated
with our new information systems in Ontario and our new Food Services
warehouse in Québec were resolved in the third and fourth quarters of 2008.
    Third quarter net earnings and fully diluted net earnings per share in
2008 were up 2.6% and 5.2% respectively from 2007. Excluding third quarter A&P
acquisition-related integration and rationalization costs before taxes of $5.4
million and a $1.8 million income tax expense reduction resulting from a
future decrease announced in the federal tax rate, adjusted net earnings(1)
and adjusted fully diluted net earnings per share(1) for the third quarter of
2008 were up 0.5% and 3.8% respectively, compared to adjusted net earnings(1)
and adjusted fully diluted net earnings per share(1) for the third quarter of
2007. The turnaround achieved following the difficulties encountered in the
first two quarters of 2008 contributed to this earnings growth.
    Fourth quarter net earnings and fully diluted net earnings per share in
2008 were up 24.1% and 30.0% respectively over those for 2007. Excluding A&P
acquisition-related integration and rationalization costs before taxes of
$14.1 million in the fourth quarter of 2007, adjusted net earnings(1) and
adjusted fully diluted net earnings per share(1) for the fourth quarter of
2008 were up 7.2% and 12.1% over adjusted net earnings(1) and adjusted fully
diluted net earnings per share(1) for the fourth quarter of 2007. Our return
to earnings growth in the third quarter of 2008 continued in the fourth
quarter.


    
                            2009                 2008                 2007
    -------------------------------------------------------------------------
    (Millions of
     dollars)            Q1     Q2     Q1     Q2     Q3     Q4     Q3     Q4
    -------------------------------------------------------------------------
    Net earnings       81.1   76.3   73.8   54.0   91.9   72.5   89.6   58.4
    Integration and
     rationalization
     costs after
     taxes                -      -      -      -      -      -    3.6    9.2
    Banner
     conversion costs
     after taxes        3.0    0.9      -      -      -      -      -      -
    Decrease in
     tax expense          -      -  (11.4)     -      -      -   (1.8)     -
    -------------------------------------------------------------------------
    Adjusted net
     earnings(1)       84.1   77.2   62.4   54.0   91.9   72.5   91.4   67.6
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                           2009                 2008                 2007
    -------------------------------------------------------------------------
    (Dollars and
     per share)          Q1     Q2     Q1     Q2     Q3     Q4     Q3     Q4
    -------------------------------------------------------------------------
    Fully diluted
     net earnings      0.73   0.68   0.64   0.48   0.81   0.65   0.77   0.50
    Integration and
     rationalization
     costs after
     taxes                -      -      -      -      -      -   0.01   0.08
    Banner
     conversion costs
     after taxes       0.03      -      -      -      -      -      -      -
    Decrease in
     tax expense          -      -  (0.10)     -      -      -      -      -
    -------------------------------------------------------------------------
    Adjusted fully
     diluted net
     earnings(1)       0.76   0.68   0.54   0.48   0.81   0.65   0.78   0.58
    -------------------------------------------------------------------------
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    Cash Position

    OPERATING ACTIVITIES

    Operating activities generated cash flows of $123.3 million in the second
quarter and $174.1 million over the first 24 weeks of 2009, compared to $108.5
million and $121.5 million respectively in the corresponding periods of fiscal
2008. The increase in second quarter cash flows in 2009 compared to 2008 is
due primarily to increased net earnings and a net change in non-cash items.
The increase in 24-week period cash flows of 2009 compared to those for 2008
is due primarily to increased net earnings and a change in future income
taxes.

    INVESTING ACTIVITIES

    Investing activities required outflows of $35.2 million in the second
quarter and $90.3 million in the first 24 weeks of 2009 versus $21.3 million
in the second quarter and $76.3 million in the first 24 weeks of 2008. These
increases are due primarily to greater acquisition of fixed assets.
    During the first 24 weeks of 2009, the Company and the retailers invested
$153.8 million in our retail network, for a gross expansion of 264,000 square
feet and a net expansion of 105,000 square feet or 0.6%. Major renovations and
expansions of 14 stores were completed, and six new stores were opened.

    FINANCING ACTIVITIES

    Financing activities required outflows of $21.6 million and $26.9 million
in the second quarter and 24-week period of 2009 versus 2008 second quarter
and 24-week outflows of $49.0 million and $79.9 million. The decrease in
outflows between the 2009 periods and the 2008 periods is largely attributable
to the greater issuance of shares, for $18.8 million in the second quarter and
$36.2 million over the 24-week period, versus $0.9 million and $1.9 million
for the corresponding periods of 2008, as well as to a reduced redemption of
Class A Subordinate shares for the first 24 weeks of 2009 compared to the
corresponding period of 2008.

    Financial Position

    Despite the financial market crisis, we do not anticipate(2) any
liquidity risk and consider our financial position at the end of the second
quarter of 2009 as very solid. We had $208.6 million in cash and cash
equivalents and an unused authorized revolving line of credit of $400.0
million. Our long-term debt corresponded to 31.3% of the combined total of
long-term debt and shareholders' equity (long-term debt/total capital).
    At the end of the second quarter, the main elements of our long-term debt
were as follows:


    
                            Interest Rate       Balance         Maturity
                                             (Millions of
                                                dollars)
    -------------------------------------------------------------------------
    Credit A Facility    Rates fluctuate with     369.3      August 15, 2012
                          changes in bankers'
                           acceptance rates

    Series A Notes         4.98% fixed rate       200.0     October 15, 2015

    Series B Notes         5.97% fixed rate       400.0     October 15, 2035
    -------------------------------------------------------------------------

    At the end of the quarter, interest rate swap agreements in the notional
amount of $100.0 million were outstanding under our Credit A Facility. These
agreements provide for the exchange of variable interest payments for fixed
interest payments according to the following terms:

    Fixed Rates                 Notional Amount                 Maturity
                             (Millions of dollars)
    -------------------------------------------------------------------------
    3.9820%                          50.0                  December 16, 2009
    4.0425%                          50.0                  December 16, 2010
    -------------------------------------------------------------------------

    Giving effect to these swap agreements, at the end of the quarter,
long-term indebtedness comprised $700.0 million at fixed rates ranging from
4.482% to 5.97% and $269.3 million at variable rates which fluctuate with
changes in bankers' acceptance rates.

    FINANCIAL RATIOS

                                                         As at         As at
                                                      March 14, September 27,
                                                          2009          2008
    -------------------------------------------------------------------------
    Financial structure
      Long-term debt (Millions of dollars)             1,006.4       1,005.0
      Shareholders' equity (Millions of dollars)       2,205.3       2,068.3
      Long-term debt/total capital (%)                    31.3          32.7

                                                   Fiscal 2009   Fiscal 2008
                                                     (24 weeks)    (24 weeks)
                                                   --------------------------
    Results
      EBITDA(1)/Financial costs (Times)                   14.3           9.6
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    CAPITAL STOCK, STOCK OPTIONS AND PERFORMANCE SHARE UNITS

                                                         As at         As at
                                                      March 14, September 27,
                                                          2009          2008
    -------------------------------------------------------------------------
    Number of Class A Subordinate Shares outstanding
     (Thousands)                                       110,708       109,806
    Number of Class B Shares outstanding (Thousands)       739           750
    Stock options:
      Number outstanding (Thousands)                     1,874         3,534
      Exercise price (Dollars)                        17.23 to      17.01 to
                                                         39.17         39.17
      Weighted average exercise price (Dollars)          25.78         23.63
    Performance share units:
      Number outstanding (Thousands)                       293           210
      Weighted average maturity (Months)                    18            18
    -------------------------------------------------------------------------
    

    NORMAL COURSE ISSUER BID PROGRAM

    Under the normal course issuer bid program, the Company may repurchase up
to 6 million of its Class A Subordinate shares between September 5, 2008 and
September 4, 2009. Since September 5, 2008, the Company repurchased 1,481,500
shares at an average price of $31.12 for a total of $46.1 million. This
program offers us an additional option for using excess funds. Thus, we can
decide, in the shareholders' best interest, to reimburse debt or to repurchase
Company shares.

    DIVIDENDS

    On April 22, 2009, the Company's Board of Directors declared a quarterly
dividend of $0.1375 per Class A Subordinate Share and Class B Share payable
June 9, 2009, an increase of 10.0% over the dividend for the same quarter last
year. On an annualized basis, this dividend represents more than 20% of 2008
net earnings.

    SHARE TRADING

    The value of METRO INC. shares remained in the range of $27.38 to $40.00
over the first two quarters of fiscal 2009. During this period, a total of
63.3 million shares were traded on the Toronto Stock Exchange. The closing
price on Friday, April 10, 2009 was $38.35, compared to $31.77 at the end of
fiscal 2008.

    New Accounting Policies

    ADOPTED IN 2009

    Inventories

    In the first quarter of 2009, the Company adopted Section 3031
"Inventories". Under this new standard, inventories shall be measured at the
lower of cost and net realizable value and the retail method may be used if it
is close to cost. Furthermore, all costs incurred in bringing the inventories
to their present location and condition shall be included in the cost of
inventories. Other costs shall be recognized as expenses in the period in
which they are incurred.
    The Company measures its wholesale inventories at the lower of cost,
determined by the average cost method net of certain considerations received
from vendors, and net realizable value. Retail inventories are valued at the
retail price less the gross margin and certain considerations received from
vendors. Following this new section's adoption, the Company has included
certain costs in its cost of inventories, such as receiving and shelving costs
and also costs for products transformed in store. Warehousing costs are
recognized as operating expenses.
    The new Section 3031 was applied retrospectively with restatement of
prior periods' financial statements.
    The adjustments are explained in note 2 to the consolidated financial
statements included in this interim report.

    Goodwill and Intangible Assets

    In the first quarter of 2009, the Company adopted the Section 3064
"Goodwill and Other Intangible Assets". The new section states that upon their
initial identification, intangible assets are to be recognized as assets only
if they meet the definition of an intangible asset and the recognition
criteria. As for subsequent measurement of intangible assets, goodwill and
disclosure, Section 3064 carries forward the requirements of the old Section
3062 "Goodwill and Other Intangible Assets". The adoption of these guidelines
did not have any material effect on the Company's results, financial position
or cash flows.

    Credit Risk and the Fair Value of Financial Assets and Financial
    Liabilities

    In the second quarter of 2009, the Company adopted EIC-173 "Credit Risk
and the Fair Value of Financial Assets and Financial Liabilities". Under this
new standard, an entity's own credit risk and the credit risk of the
counterparty should be taken into account in determining the fair value of
financial assets and financial liabilities, including derivative instruments.
The adoption of these guidelines did not have any material effect on the
Company's results, financial position or cash flows.

    RECENTLY ISSUED

    International Financial Reporting Standards

    On February 13, 2008, the Accounting Standards Board confirmed the date
of the changeover from GAAP to International Financial Reporting Standards
(IFRS). Canadian publicly accountable enterprises must adopt IFRS for their
interim and annual financial statements relating to fiscal years beginning on
or after January 1, 2011. The Company's IFRS changeover date will be the first
day of fiscal 2012, namely September 25, 2011.
    We set up a project structure to achieve the changeover of our
consolidated financial statements to IFRS. A multidisciplinary working group
analyzes, recommends accounting policy choices and implements each IFRS
standard. A steering committee made up of senior executives approves
accounting policy choices and makes sure that IT, internal control and
contractual and any other adjustments are made. The external auditors are
notified of our choices and consulted on them. The Company's Audit Committee
ensures that management fulfills its responsibilities and successfully
accomplishes the changeover to IFRS.
    We also developed a work plan whose phases are outlined in the following
tables, with actions, timetable and progress.

    
    Phase 1: Preliminary Study and Diagnostic

    -------------------------------------------------------------------------
    Actions     Identification of the IFRS standards that will require
                changes with regard to measurement in consolidated financial
                statements and disclosure.

                Rank of standards based on their anticipated impact on our
                consolidated financial statements and the efforts their
                implementation requires.
    -------------------------------------------------------------------------
    Timetable   End of our 2008 fiscal year.
    -------------------------------------------------------------------------
    Progress    Completed.
    -------------------------------------------------------------------------


    Phase 2: Analysis of Standards

    -------------------------------------------------------------------------
    Actions     Analysis of the differences between GAAP and IFRS.

                Selection of the accounting policies that the Company will
                apply on an ongoing basis.

                Company's selection of IFRS 1 exemptions at the date of
                transition.

                Calculation of the quantitative impacts on the consolidated
                financial statements.

                Disclosure analysis.

                Preparation of draft consolidated financial statements and
                notes.

                Identification of the collateral impacts in the following
                areas:

                  - information technology;
                  - internal control over financial reporting;
                  - disclosure controls and procedures;
                  - contracts;
                  - compensation;
                  - taxation;
                  - training.
    -------------------------------------------------------------------------
    Timetable   We have prepared a detailed timetable which contemplates the
                bulk of the analysis that will be completed by the end of
                September 2010. We prioritized standards, based on their
                ranking in the diagnostic, the time needed to complete the
                analysis and implementation, working group members'
                availability, as well as the timing of discussion papers,
                exposure drafts and new standards to be issued by the
                International Accounting Standards Board (IASB).
    -------------------------------------------------------------------------
    Progress    In the second quarter of fiscal 2009, we began the analysis
                of eight IFRS standards and interpretations out of a total of
                approximately 50 that will have an impact on our Company.
    -------------------------------------------------------------------------


    Phase 3: Implementation

    -------------------------------------------------------------------------
    Actions     Preparation of the opening balance sheet at the date of
                transition.

                Compilation of the comparative financial data.

                Production of the interim consolidated financial statements
                and the associated disclosure.

                Production of the annual consolidated financial statements
                and the associated disclosure.

                Implementation of changes regarding collateral impacts.
    -------------------------------------------------------------------------
    Timetable   At the end of fiscal 2011, our opening balance sheet,
                comparative financial data under IFRS and changes regarding
                collateral impacts will be completed.

                In fiscal 2012, we will produce our interim and annual
                consolidated financial statements and disclosure in
                accordance with IFRS.
    -------------------------------------------------------------------------
    Progress    Not yet commenced.
    -------------------------------------------------------------------------
    

    Throughout our IFRS transition project, we will provide update reports on
our work plan. We will also explain the main differences between our existing
accounting policies and those we will be implementing under IFRS (both
narrative and quantitative information), as well as our selection of IFRS 1
exemptions available at the date of transition.

    Subsequent Events

    On March 17, 2009, the Québec government completed a milestone in the
approval process for its 2007-2008 budget providing for the reduction of the
tax rate applicable to a corporation's investment income from 16.25% to 11.9%,
in line with the tax rate applicable to its business income. This rate
decrease, in the third quarter of 2009, will reduce our future income tax
liabilities by $2.7 million and our income tax expenses by the same amount.
    In its 2009 budget presentation on March 26, 2009, the Ontario government
announced successive reductions in the corporate tax rate, cutting it from 14%
to 10% between July 1, 2010 and July 1, 2013. When specific milestones in the
budget's approval process will be completed, we will reduce our future income
tax liabilities and income tax expenses by the same amount. If these
milestones are completed before the end of our 2009 fiscal year, this impact
will be of $7.2 million.
    On April 22, 2009, Robert Sawyer was appointed Executive Vice-President
and Chief Operating Officer of the Company. Over his 30-year career at METRO,
Robert has held several positions of increasing responsibility including
Senior Vice-President of the Quebec division and most recently Senior
Vice-President of the Ontario division where he led the turnaround of its
performance. He will now oversee all food operations of the Company and will
continue to make an important contribution to our success.

    Press Release

    This press release sets out the financial position and consolidated
results of METRO INC. on March 14, 2009. It should be read in conjunction with
the unaudited interim consolidated financial statements and accompanying notes
in this press release along with the consolidated financial statements for the
fiscal year ended September 27, 2008 and related notes and MD&A presented in
the Company's 2008 Annual Report. Certain comparative figures in this press
release have been restated as a consequence of the new accounting standard on
inventories which the Company adopted in the first quarter of 2009. This press
release is based upon information as at April 10, 2009 unless otherwise
stated. Additional information, including the Certification of Interim Filings
letters for the quarter ended March 14, 2009 signed by the President and Chief
Executive Officer and the Senior Vice-President and Chief Financial Officer,
is also available on the SEDAR website at: www.sedar.com.

    Forward-looking Information

    We have used, throughout this press release, 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, which does not constitute a historical fact,
may be deemed a forward-looking statement. Expressions such as "to grow",
"should not", "do not anticipate" 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 industry, the general economy, our annual budget as well as our 2009
action plan.
    These forward-looking statements do not provide any guarantees as to the
future performance of the Company and are subject to potential risks, known
and unknown, as well as uncertainties that could cause the outcome to differ
significantly. An economic slowdown or recession or the arrival of a new
competitor are examples described under the "Risk Management" section of the
2008 Annual Report which could have an impact on these statements. We believe
these statements to be reasonable and pertinent as at the time of publication
of this interim report and represent our expectations. The Company does not
intend to update any forward-looking statements contained herein, except as
required by applicable law.

    Non-GAAP Measurements

    In addition to the Canadian generally accepted accounting principles
(GAAP) earnings measurements provided, we have included certain non-GAAP
earnings measurements. These measurements are presented for information
purposes only. They do not have a standardized meaning prescribed by GAAP and
therefore may not be comparable to similar measurements presented by other
public companies.

    Earnings before financial costs, taxes, depreciation and amortization
    (EBITDA)

    EBITDA is a measurement of earnings that excludes financial costs, taxes,
depreciation and amortization. We believe that EBITDA is a measurement
commonly used by readers of financial statements to evaluate a company's
operational cash-generating capacity and ability to discharge its financial
expenses.

    Adjusted EBITDA, adjusted net earnings and adjusted fully diluted net
    earnings per share

    Adjusted EBITDA, adjusted net earnings and adjusted fully diluted net
earnings per share are earnings measurements that exclude non-recurring items.
We believe that presenting earnings without non-recurring items leaves readers
of financial statements better informed as to the current period and
corresponding period's earnings, thus enabling them to better evaluate the
Company's performance and judge its future outlook.

    Conference Call

    Financial analysts and institutional investors are invited to participate
in a conference call on the 2009 second quarter results at 10:00 a.m. EDT on
Thursday, April 23, 2009. To access the conference call, please dial (416)
644-3423 or (514) 807-8791. The media and investing public are invited to
listen to the call in real time or delayed time on the METRO INC. Web site at
www.metro.ca.

    ----------------------
    (1) See section on "Non-GAAP measurements"
    (2) See section on "Forward-looking information"


    
    Consolidated Statements of Earnings
    Periods ended March 14, 2009 and March 15, 2008
    (Unaudited) (Millions of dollars, except for net earnings per share)

                                        12 weeks                24 weeks
                                       Fiscal Year             Fiscal Year
                               ----------              ----------
                                    2009        2008        2009        2008
                                           (Restated               (Restated
                                            - note 2)               - note 2)
    -------------------------------------------------------------------------
    Sales                      $ 2,549.7   $ 2,372.4   $ 5,150.2   $ 4,879.2
    Cost of sales and
     operating
     expenses (note 8)          (2,395.2)   (2,247.5)   (4,832.1)   (4,617.8)
    Share of earnings in a
     public company subject to
     significant influence           9.4         5.2        20.5        10.9
    Banner conversion costs
     (note 3)                       (1.3)          -        (5.8)          -
    -------------------------------------------------------------------------
    Earnings before financial
     costs, taxes, depreciation
     and amortization              162.6       130.1       332.8       272.3
    Depreciation and
     amortization                  (42.6)      (39.6)      (84.2)      (79.7)
    -------------------------------------------------------------------------
    Operating income               120.0        90.5       248.6       192.6
    Financial costs, net
     (note 5)                      (10.8)      (14.5)      (23.3)      (28.5)
    -------------------------------------------------------------------------
    Earnings before income
     taxes                         109.2        76.0       225.3       164.1
    Income taxes (note 6)          (32.9)      (22.5)      (67.9)      (38.2)
    -------------------------------------------------------------------------
    Earnings before minority
     interest                       76.3        53.5       157.4       125.9
    Minority interest                  -         0.5           -         1.9
    -------------------------------------------------------------------------
    Net earnings               $    76.3   $    54.0   $   157.4   $   127.8
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Net earnings per share
     (Dollars) (note 7)
    Basic                           0.69        0.48        1.42        1.13
    Fully diluted                   0.68        0.48        1.41        1.12
    -------------------------------------------------------------------------
                               ----------              ----------
    See accompanying notes


    Consolidated Balance Sheets
    (Unaudited) (Millions of dollars)

                                                     ----------
                                                                       As at
                                                                September 27,
                                                         As at          2008
                                                      March 14,  (Restated -
                                                          2009        note 2)
    -------------------------------------------------------------------------
    Assets
    Current assets
    Cash and cash equivalents                        $   208.6     $   151.7
    Accounts receivable                                  325.0         309.7
    Inventories (note 8)                                 654.2         641.6
    Prepaid expenses                                      11.9           7.6
    Income taxes receivable                                5.4          25.0
    Future income taxes                                   32.1          38.4
    -------------------------------------------------------------------------
                                                       1,237.2       1,174.0
    Investments and other assets                         188.0         169.1
    Fixed assets                                       1,241.6       1,231.9
    Intangible assets                                    323.5         328.6
    Goodwill                                           1,478.6       1,478.6
    Future income taxes                                    2.7           2.7
    Accrued benefit assets                                48.9          40.7
    -------------------------------------------------------------------------
                                                     $ 4,520.5     $ 4,425.6
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities and Shareholders' equity
    Current liabilities
    Bank loans                                       $     1.1     $     0.9
    Accounts payable                                   1,034.3       1,062.7
    Income taxes payable                                  34.9          50.9
    Future income taxes                                    6.0           6.0
    Current portion of long-term debt                      4.9           6.3
    -------------------------------------------------------------------------
                                                       1,081.2       1,126.8
    Long-term debt                                     1,006.4       1,005.0
    Accrued benefit obligations                           50.2          50.7
    Future income taxes                                  145.2         140.8
    Other long-term liabilities                           32.2          34.0
    -------------------------------------------------------------------------
                                                       2,315.2       2,357.3
    -------------------------------------------------------------------------

    Shareholders' equity
    Capital stock (note 9)                               730.0         697.6
    Contributed surplus                                    2.1           4.9
    Retained earnings                                  1,476.4       1,366.8
    Accumulated other comprehensive income (note 10)      (3.2)         (1.0)
    -------------------------------------------------------------------------
                                                       2,205.3       2,068.3
    -------------------------------------------------------------------------
                                                     $ 4,520.5     $ 4,425.6
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                     ----------
    See accompanying notes


    Consolidated Statements of Cash Flows
    Periods ended March 14, 2009 and March 15, 2008
    (Unaudited) (Millions of dollars)

                                        12 weeks                24 weeks
                                       Fiscal Year             Fiscal Year
                               ----------              ----------
                                    2009        2008        2009        2008
                                           (Restated               (Restated
                                            - note 2)               - note 2)
    -------------------------------------------------------------------------
    Operating activities
    Net earnings               $    76.3   $    54.0   $   157.4   $   127.8
    Non-cash items
      Share of earnings in a
       public company subject
       to significant
       influence                    (9.4)       (5.2)      (20.5)      (10.9)
      Depreciation and
       amortization                 42.6        39.6        84.2        79.7
      Amortization of
       deferred financing costs      0.5         0.5         1.0         1.0
      Gain on disposal and
       write-off of fixed and
       intangible assets            (0.6)       (0.9)       (0.6)       (1.2)
      Gain on disposal of
       investments                     -        (0.6)          -        (0.6)
      Interest income on
       investments                  (0.2)          -        (0.2)          -
      Future income taxes            5.8         2.0        11.6        (8.0)
      Stock-based
       compensation cost             1.0         0.9         2.1         1.5
      Excess of amounts paid
       for employee future
       benefits over current
       period cost                  (2.2)       (2.7)       (8.7)       (4.2)
      Minority interest                -        (0.5)          -        (1.9)
    -------------------------------------------------------------------------
                                   113.8        87.1       226.3       183.2
    Net change in non-cash
     working capital related
     to operations                   9.5        21.4       (52.2)      (61.7)
    -------------------------------------------------------------------------
                                   123.3       108.5       174.1       121.5
    -------------------------------------------------------------------------
    Investing activities
    Net change in investments
     and other assets               (2.5)        2.7        (2.7)        1.0
    Dividends from public
     company subject to
     significant influence           0.8         0.8         1.5         1.5
    Acquisition of fixed assets    (37.0)      (19.9)      (89.1)      (63.9)
    Disposal of fixed assets        11.1         6.1        11.8         6.4
    Acquisition of intangible
     assets                         (7.6)      (11.0)      (11.8)      (21.3)
    -------------------------------------------------------------------------
                                   (35.2)      (21.3)      (90.3)      (76.3)
    -------------------------------------------------------------------------
    Financing activities
    Net change in bank loans        (2.1)      (24.6)        0.2         0.1
    Issuance of shares (note 9)     18.8         0.9        36.2         1.9
    Redemption of shares
     (note 9)                      (13.8)      (10.4)      (23.1)      (51.3)
    Acquisition of treasury
     shares (note 9)                (4.3)       (0.9)       (4.3)       (0.9)
    Increase of long-term debt       1.1         0.3         3.8         1.1
    Repayment of long-term debt     (3.4)       (1.3)       (5.7)       (3.0)
    Net change in other
     long-term liabilities          (2.6)        1.1        (4.9)       (0.5)
    Dividends paid                 (15.3)      (14.1)      (29.1)      (27.3)
    -------------------------------------------------------------------------
                                   (21.6)      (49.0)      (26.9)      (79.9)
    -------------------------------------------------------------------------
    Net change in cash and
     cash equivalents               66.5        38.2        56.9       (34.7)
    Cash and cash equivalents
     - beginning of period         142.1        27.6       151.7       100.5
    -------------------------------------------------------------------------
    Cash and cash equivalents
     - end of period           $   208.6   $    65.8   $   208.6   $    65.8
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Other information
    Interest paid                    1.0         6.8        23.3        30.4
    Income taxes paid               29.2        20.7        52.9        62.8
    -------------------------------------------------------------------------
                               ----------              ----------
    See accompanying notes


    Consolidated Statements of Retained Earnings
    24-week periods ended March 14, 2009 and March 15, 2008
    (Unaudited) (Millions of dollars)
                                                             Fiscal Year
                                                     ----------
                                                          2009          2008
                                                                   (Restated
                                                                    - note 2)
    -------------------------------------------------------------------------
    Balance - beginning of period                    $ 1,359.6     $ 1,214.3
    Adjustment due to a new accounting policy
     related to inventories (note 2)                       7.2           7.7
    -------------------------------------------------------------------------
    Restated balance                                   1,366.8       1,222.0
    Net earnings                                         157.4         127.8
    Dividends                                            (29.1)        (27.3)
    Share redemption premium                             (18.7)        (39.0)
    -------------------------------------------------------------------------
    Balance - end of period                          $ 1,476.4     $ 1,283.5
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                     ----------
    See accompanying notes


    Consolidated Statements of Comprehensive Income
    Periods ended March 14, 2009 and March 15, 2008
    (Unaudited) (Millions of dollars)

                                        12 weeks                24 weeks
                                       Fiscal Year             Fiscal Year
                               ----------              ----------
                                    2009        2008        2009        2008
                                           (Restated               (Restated
                                            - note 2)               - note 2)
    -------------------------------------------------------------------------
    Net earnings               $    76.3   $    54.0   $   157.4   $   127.8
    Other comprehensive income
     (note 10)
      Change in fair value of
       derivatives designated
       as cash flow hedges          (0.4)       (2.8)       (3.1)       (3.6)
      Corresponding income taxes     0.1         0.9         0.9         1.2
    -------------------------------------------------------------------------
    Comprehensive income       $    76.0   $    52.1   $   155.2   $   125.4
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                               ----------              ----------
    See accompanying notes
    

    Notes to Interim Consolidated Statements
    Periods ended March 14, 2009 and March 15, 2008
    (Unaudited) (Millions of dollars, unless otherwise indicated)

    1. Statement Presentation

    The unaudited interim consolidated financial statements were prepared by
management in accordance with Canadian generally accepted accounting
principles (GAAP). The accounting policies and procedures used in preparing
these interim consolidated financial statements are the same as those used in
preparing the audited annual consolidated financial statements for the year
ended September 27, 2008, except for the new accounting policies described in
note 2. The unaudited interim consolidated financial statements should be read
along with the audited annual consolidated financial statements and notes to
the statements in the Company's 2008 Annual Report. The operating results for
the interim period covered do not necessarily reflect overall results for the
fiscal year. Certain comparative figures have been reclassified to conform to
the presentation being used in the current fiscal year.

    2. New Accounting Policies

    ADOPTED IN 2009

    Inventories

    In the first quarter of 2009, the Company adopted Section 3031
"Inventories". Under this new standard, inventories shall be measured at the
lower of cost and net realizable value and the retail method may be used if it
is close to cost. Furthermore, all costs incurred in bringing the inventories
to their present location and condition shall be included in the cost of
inventories. Other costs shall be recognized as expenses in the period in
which they are incurred.
    The Company measures its wholesale inventories at the lower of cost,
determined by the average cost method net of certain considerations received
from vendors, and net realizable value. Retail inventories are valued at the
retail price less the gross margin and certain considerations received from
vendors. Following this new section's adoption, the Company has included
certain costs in its cost of inventories, such as receiving and shelving costs
and also costs for products transformed in store. Warehousing costs are
recognized as operating expenses.
    The new Section 3031 was applied retrospectively with restatement of
prior periods' financial statements.
    The Company recorded the following adjustments in fiscal 2009:

    
    Balance sheet components
                                                                   Beginning
                                                                     balance
                                                                September 28,
    Increase or (Decrease)                                              2008
    -------------------------------------------------------------------------
    Inventories                                                         26.0
    Goodwill                                                           (11.5)
    Long-term future income tax liability                                7.3
    Retained earnings                                                    7.2
    -------------------------------------------------------------------------

    The Company recorded the following adjustments to its fiscal 2008 second
quarter:

    Balance sheet components

                                                     Beginning        Ending
                                                       balance       balance
                                                  September 30,     March 15,
    Increase or (Decrease)                                2007          2008
    -------------------------------------------------------------------------
    Inventories                                           26.8          26.8
    Goodwill                                             (11.5)        (11.5)
    Long-term future income tax liability                  7.6           7.6
    Retained earnings                                      7.7           7.7
    -------------------------------------------------------------------------

    Earnings components
                                                              12-week period
                                                                       ended
                                                                    March 15,
    Increase or (Decrease)                                              2008
    -------------------------------------------------------------------------
    Cost of sales and operating expenses                                 5.7
    Income taxes                                                        (1.6)
    Net earnings                                                        (4.1)
    Basic net earnings per share (Dollars)                             (0.04)
    Fully diluted net earnings per share (Dollars)                     (0.03)
    -------------------------------------------------------------------------

    The adjustments on the earnings for the 24-week period of 2008 are not
material.

    Goodwill and Intangible Assets

    In the first quarter of 2009, the Company adopted the Section 3064
"Goodwill and Intangible Assets". The new section states that upon their
initial identification, intangible assets are to be recognized as assets only
if they meet the definition of an intangible asset and the recognition
criteria. As for subsequent measurement of intangible assets, goodwill and
disclosure, Section 3064 carries forward the requirements of the old Section
3062 "Goodwill and Other Intangible Assets". The adoption of these guidelines
did not have any material effect on the Company's results, financial position
or cash flows.

    Credit Risk and the Fair Value of Financial Assets and Financial
    Liabilities

    In the second quarter of 2009, the Company adopted EIC-173 "Credit Risk
and the Fair Value of Financial Assets and Financial Liabilities". Under this
new standard, an entity's own credit risk and the credit risk of the
counterparty should be taken into account in determining the fair value of
financial assets and financial liabilities, including derivative instruments.
The adoption of these guidelines did not have any material effect on the
Company's results, financial position or cash flows.

    3. Banner Conversion Costs

    On August 7, 2008, the Company announced its conversion plan for changing
the five banners under which it operates its 159 Ontario supermarkets to the
Metro banner by December 2009. The Company also announced that an amount of
approximately $25 will be incurred for this conversion, most of which had
already been recorded under the A&P Canada integration plan.
    Banner conversion costs of $5.8 for the 24-week period of 2009, including
$1.3 incurred in the second quarter, are part of those not recorded under the
A&P Canada integration plan. More costs will be incurred and expensed over the
next few quarters.

    4. Employee Future Benefits

    The Company offers several defined benefit and defined contribution plans
that provide most participants with pension, other retirement and other
post-employment benefits. The Company's defined benefit and defined
contribution plan expenses were as follows:

                                             12 weeks  Fiscal Year
                                 -------------------
                                          2009                   2008
    -------------------------------------------------------------------------
                                 Pension       Other     Pension       Other
                                   plans       plans       plans       plans
    --------------------------------------------------------------------------
    Defined contribution plans     $ 6.2       $ 0.2       $ 5.9       $ 0.1
    --------------------------------------------------------------------------
    Defined benefit plans
    Current service cost             4.7         0.3         5.2         0.3
    Interest cost                    7.8         0.5         7.0         0.5
    Projected return on plan
     assets                         (9.2)          -        (9.7)          -
    Amortization of actuarial
     losses (gains) and past
     service cost                    0.4        (0.1)        0.4           -
    -------------------------------------------------------------------------
                                     3.7         0.7         2.9         0.8
    -------------------------------------------------------------------------
                                 $   9.9       $ 0.9       $ 8.8       $ 0.9
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                 -------------------


                                             24 weeks Fiscal Year
                                 -------------------
                                          2009                   2008
    -------------------------------------------------------------------------
                                 Pension       Other     Pension       Other
                                   plans       plans       plans       plans
    ------------------------------------------------------------------------
    Defined contribution plans    $ 12.8       $ 0.3      $ 12.0       $ 0.2
    -------------------------------------------------------------------------
    Defined benefit plans
    Current service cost             9.6         0.6        10.5         0.7
    Interest cost                   15.5         0.9        14.1         0.9
    Projected return
     on plan assets                (18.3)          -       (19.5)          -
    Amortization of actuarial
     losses (gains) and past
     service cost                    0.7        (0.1)        0.7           -
    -------------------------------------------------------------------------
                                     7.5         1.4         5.8         1.6
    -------------------------------------------------------------------------
                                $   20.3       $ 1.7      $ 17.8        $ 1.8
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                 -------------------

    5. Financial Costs, net

                                12 weeks Fiscal Year    24 weeks Fiscal Year
                                --------                --------
                                    2009        2008        2009        2008
    -------------------------------------------------------------------------
    Interest, short term           $ 0.3       $ 1.0       $ 0.9       $ 2.0
    Interest, long term             10.7        13.9        22.8        28.1
    Amortization of deferred
     financing costs                 0.5         0.5         1.0         1.0
    Interest income                 (0.7)       (0.9)       (1.4)       (2.6)
    -------------------------------------------------------------------------
                                  $ 10.8      $ 14.5      $ 23.3      $ 28.5
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                --------                --------

    6. Income Taxes

    The effective income tax rates were as follows:

                                12 weeks Fiscal Year    24 weeks Fiscal Year
                                --------                --------
                                    2009        2008        2009        2008
                                           (Restated               (Restated
    (Percentage)                            - note 2)               - note 2)
    -------------------------------------------------------------------------
    Combined statutory income
     tax rate                       31.2        31.2        31.3        31.4
    Changes
      Impact of federal tax
       rate decrease of 3.5%
       on future taxes
       (2008 - $11.4)                  -           -           -        (6.9)
      Share of earnings in a
       public company subject
       to significant influence     (1.4)       (1.0)       (1.5)       (1.1)
    Other                            0.3        (0.6)        0.3        (0.1)
    -------------------------------------------------------------------------
                                    30.1        29.6        30.1        23.3
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    7. Net Earnings per Share

    Basic net earnings per share and fully diluted net earnings per share
    were calculated based on the following number of shares:

                                12 weeks Fiscal Year    24 weeks Fiscal Year
                                --------                --------
    (Millions)                      2009        2008        2009        2008
    -------------------------------------------------------------------------
    Weighted average number of
     shares outstanding - Basic    111.2       113.0       110.9       113.5
    Dilutive effect under stock
     option plan and performance
     share units                     0.9         0.6         0.9         0.9
    -------------------------------------------------------------------------
    Weighted average number of
     shares outstanding - Diluted  112.1       113.6       111.8       114.4
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    8. Inventories

    The breakdown of inventories was as follows:
                                                      --------
                                                         As at         As at
                                                      March 14,    September
                                                          2009            27,
                                                                        2008
                                                                 (Restated -
                                                                      note 2)
    -------------------------------------------------------------------------
    Wholesale inventories                              $ 291.2       $ 293.7
    Retail inventories                                   363.0         347.9
    -------------------------------------------------------------------------
                                                       $ 654.2       $ 641.6
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                      --------

    The cost of inventories recognized as an expense for the 12-week period
    ended March 14, 2009 was $2,101.9 (2008 - $1,972.4) and $4,241.8 for the
    24-week period of 2009 (2008 - $4,059.2).


    9. Capital Stock

    Outstanding

                                  Class A
                            Subordinate Shares     Class B Shares
                            ------------------  ------------------
                              Number              Number
                          (Thousands)         (Thousands)              Total
    -------------------------------------------------------------------------
    Balance as at
     September 27, 2008      109,806   $ 696.1       750     $ 1.5   $ 697.6
    Shares issued for
     cash - options
     exercised                 1,692      36.2         -         -      36.2
    Transfer from
     contributed surplus -
     options exercised             -       1.3         -         -       1.3
    Shares redeemed for
     cash, excluding
     premium of $18.7           (686)     (4.4)        -         -      (4.4)
    Conversion of Class B
     Shares into  Class A
     Subordinate Shares           11         -       (11)        -         -
    Acquisition of treasury
     shares, excluding
     premium of $3.6            (115)     (0.7)        -         -      (0.7)
    -------------------------------------------------------------------------
    Balance as at
     March 14, 2009          110,708   $ 728.5       739     $ 1.5   $ 730.0
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Stock Option Plan

    As at March 14, 2009, 1,874,060 stock options were outstanding at exercise
prices varying from $17.23 to $39.17, with expiry dates up to 2015. Of these
stock options, 594,680 could be exercised for a weighted average exercise
price of $25.21.

    Granted stock options were as follows:

                                                              24 weeks
                                                             Fiscal Year
                                                       -------
                                                          2009          2008
    -------------------------------------------------------------------------
    Granted stock options during the period (Units)     10,000        53,800
    Weighted average exercise price (Dollars)            33.60         28.09
    Weighted average fair value (Dollars)                 7.58          7.54
    -------------------------------------------------------------------------
                                                       -------

    No stock options were granted during the 12-week periods ended March 14,
2009 and March 15, 2008.
    During the 24-week period ended March 14, 2009, the weighted average fair
value of stock options granted during the period was established at the time
of grant using the Black & Scholes model and based on the following weighted
average assumptions: risk-free interest rate of 2.8% (2008 - 3.8%), expected
six-year term (2008 - six-year term), anticipated volatility of 22.0% (2008 -
25.0%) and an anticipated 1.4% dividend yield (2008 - 1.5%).
    The compensation expense for these stock options amounted to $0.5 for the
12-week period ended March 14, 2009 (2008 - $0.4) and to $1.0 for the 24-week
period of 2009 (2008 - $0.7).

    Performance Share Unit Plan

    As at March 14, 2009, 293,174 performance share units (PSUs) were
outstanding. During the second quarter of 2009, 82,702 PSUs were granted (2008
- 80,694) and no PSU was cancelled (2008 - 1,778). During the 24-week period
ended March 14, 2009, 82,702 PSUs were granted (2008 - 108,441) and no PSU was
cancelled (2008 - 6,912).
    As at March 14, 2009, 309,000 shares were held in trust for participants
until the PSUs shall have vested or been cancelled (194,000 as at September
27, 2008). During this quarter, 115,000 shares (2008 - 40,000) have been
acquired for a total of $4.3 (2008 - $0.9).
    A compensation expense of $0.5 and $1.1 respectively during the 12-week
period and the 24-week period ended March 14, 2009 pertaining to PSUs was
recorded (2008 - $0.5 and $0.8).

    10. Accumulated Other Comprehensive Income

    Derivatives designated as cash flow hedges constitute the sole item in
Accumulated Other Comprehensive Income. The changes that occurred during the
24-week period were as follows:

                                                              Fiscal Year
                                                       -------
                                                          2009          2008
    -------------------------------------------------------------------------
    Balance - beginning of period                       $ (1.0)        $ 1.2
    Change in fair value of derivatives designated
     net of income taxes of $0.9 (2008 - $1.2)            (2.2)         (2.4)
    -------------------------------------------------------------------------
    Balance - end of period                             $ (3.2)       $ (1.2)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                       -------
    
    %SEDAR: 00001783EF




For further information:

For further information: Richard Dufresne, Senior Vice-President and
Chief Financial Officer, (514) 643-1003; Investors relations Department: (514)
643-1055, finance@metro.ca; METRO INC.'s corporate information and press
releases are available on the Internet at: www.metro.ca; Source: METRO INC.


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