METRO's fully diluted net earnings per share increased 8.8% in the second
quarter of 2010

    
    -------------------------------------------------------------------------
    2010 SECOND QUARTER HIGHLIGHTS
    - Net earnings of $80.3 million, up 5.2%
    - Fully diluted net earnings per share of $0.74, up 8.8%
    - Sales of $2,576.7 million, up 1.1%
    - Declared dividend of $0.17 per share, up 23.6%
    -------------------------------------------------------------------------
    

MONTREAL, April 21 /CNW Telbec/ - METRO INC. (TSX : MRU.A) realized net earnings of $80.3 million in the second quarter ended March 13, 2010, an increase of 5.2% over the same quarter last year, and fully diluted net earnings per share of $0.74 versus $0.68 last year, an increase of 8.8%.

"We are pleased with our second quarter results. Despite persistent deflation in certain product categories, our results improved on last year's excellent second quarter. Consumers remain cautious and our teams constantly strive to provide them excellent value across all of our banners. On April 12, 2010, we launched the Metro & Me loyalty card in the Québec City region in phase 1 of a new program that will allow our Québec customers to accumulate points that can be applied towards purchases at Metro supermarkets. We are confident(2) that we will continue our growth in 2010," stated Eric R. La Flèche, President and Chief Executive Officer.

SALES

2010 second quarter sales reached $2,576.7 million compared to $2,549.7 million last year, an increase of 1.1%. Sales for the first 24 weeks of 2010 reached $5,221.7 million, up 1.4% compared to sales of $5,150.2 million for the corresponding period of fiscal 2009.

These increases were achieved despite a slight drop in the value of our basket, whereas last year, high food price inflation and the temporary closing of several stores of a competitor due to a labour conflict had a positive impact on our first and second quarter sales. Same-store sales declined 0.7% in the second quarter due to deflation in certain product categories.

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

Second quarter EBITDA(1) in 2010 was $171.6 million, up 5.5% from $162.6 million for the same quarter last year. Second quarter EBITDA(1) represented 6.7% of sales versus 6.4% last year.

EBITDA(1) for the first 24 weeks of 2010 was $353.7 million or 6.8% of sales compared to $332.8 million or 6.5% of sales for the same period last year. Excluding banner conversion costs of $0.9 million and $5.8 million before taxes recorded for the first 24 weeks of 2010 and 2009 respectively, adjusted EBITDA(1) represented 6.8% of sales in 2010 and 6.6% in 2009.

These increases are due mainly to an increase in our gross margins driven by our improved store operations.

Our share of earnings from our investment in Alimentation Couche-Tard for the second quarter and the first 24 weeks of 2010 were $6.5 million and $17.3 million respectively, compared to $9.4 million and $20.5 million for the corresponding periods of fiscal 2009. Excluding non-recurring items as well as our share of earnings from our investment in Alimentation Couche-Tard, our adjusted EBITDA(1) for the second quarter and the first 24 weeks of 2010 were $165.1 million and $337.3 million respectively or 6.4% and 6.5% of sales versus $154.5 million or 6.1% of sales for the second quarter of 2009 and $318.1 million or 6.2% of sales for the 24-week period.

EBITDA(1) Adjustments

    
    (Millions of                     12 weeks / Fiscal Year
     dollars,                  2010                          2009
     unless      ------------------------------------------------------------
     otherwise      EBITDA     Sales    EBITDA/   EBITDA     Sales    EBITDA/
     indicated)                       Sales (%)                     Sales (%)
    -------------------------------------------------------------------------
    EBITDA           171.6   2,576.7       6.7     162.6   2,549.7       6.4
    Banner
     conversion
     costs               -         -                 1.3         -
    -------------------------------------------------------------------------
    Adjusted
     EBITDA          171.6   2,576.7       6.7     163.9   2,549.7       6.4
    Share of
     earnings
     from our
     investment in
     Alimentation
     Couche-Tard      (6.5)        -                (9.4)        -
    -------------------------------------------------------------------------
    Adjusted EBITDA
     excluding share
     of earnings     165.1   2,576.7       6.4     154.5   2,549.7       6.1
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    (Millions of                     24 weeks / Fiscal Year
     dollars,                  2010                          2009
     unless      ------------------------------------------------------------
     otherwise      EBITDA     Sales    EBITDA/   EBITDA     Sales    EBITDA/
     indicated)                       Sales (%)                     Sales (%)
    -------------------------------------------------------------------------
    EBITDA           353.7   5,221.7       6.8     332.8   5,150.2       6.5
    Banner
     conversion
     costs             0.9         -                 5.8         -
    -------------------------------------------------------------------------
    Adjusted
     EBITDA          354.6   5,221.7       6.8     338.6   5,150.2       6.6
    Share of
     earnings
     from our
     investment in
     Alimentation
     Couche-Tard     (17.3)        -               (20.5)        -
    -------------------------------------------------------------------------
    Adjusted EBITDA
     excluding share
     of earnings     337.3   5,221.7       6.5     318.1   5,150.2       6.2
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

DEPRECIATION AND AMORTIZATION AND FINANCIAL COSTS

Total amortization expenses for the second quarter and the first 24 weeks of fiscal 2010 amounted to $47.0 million and $93.7 million respectively, compared with $42.6 million and $84.2 million for the same periods last year. Second quarter financial costs totalled $10.3 million in 2010 versus $10.8 million last year, while 2010 24-week financial costs totalled $21.3 million versus $23.3 million last year. Interest rates for the first 24 weeks of 2010 averaged 3.9% versus 4.8% for the corresponding period last year.

INCOME TAXES

The 2010 second quarter and 24-week period income tax expenses of $34.0 million and $60.3 million represented the effective tax rates of 29.7% and 25.3% respectively. In 2009, the second quarter and 24-week period income tax expenses of $32.9 million and $67.9 million represented an effective tax rate of 30.1% for both periods. In the first quarter of 2010, we benefited from a $10.0 million reduction in our net future income tax liabilities and income tax expenses. Excluding this reduction, our effective tax rate for the first 24 weeks of 2010 was 29.5%.

NET EARNINGS

The 2010 second quarter net earnings were $80.3 million compared to $76.3 million for the corresponding quarter last year, an increase of 5.2%. Fully diluted net earnings per share rose 8.8% to $0.74 from $0.68 last year.

Net earnings for the first 24 weeks of 2010 reached $178.4 million versus $157.4 million last year, up 13.3%. Fully diluted net earnings per share were $1.65 compared to $1.41, an increase of 17.0%. Excluding the first quarter income tax expense decrease of $10.0 million in 2010 and pre-tax banner conversion costs of $0.9 million in 2010 and $5.8 million in 2009, adjusted net earnings(1) for the 2010 24-week period were $169.0 million, up 4.8% from the $161.3 million for the corresponding period of 2009. Adjusted fully diluted net earnings per share(1) were $1.56, up 8.3% from $1.44 last year.

Net Earnings Adjustments

    
                           12 weeks / Fiscal Year

                          2010                2009              Change (%)
                 ------------------------------------------------------------
                 (Millions     Fully (Millions     Fully       Net     Fully
                        of   diluted        of   diluted  earnings   diluted
                   dollars)      EPS   dollars)      EPS                 EPS
                            (Dollars)           (Dollars)
    -------------------------------------------------------------------------
    Net earnings      80.3      0.74      76.3      0.68       5.2       8.8
    Banner
     conversion
     costs after
     taxes               -         -       0.9         -
    Decrease in
     tax expense         -         -         -         -
    -------------------------------------------------------------------------
    Adjusted net
     earnings(1)      80.3      0.74      77.2      0.68       4.0       8.8
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                           24 weeks / Fiscal Year

                          2010                2009              Change (%)
                 ------------------------------------------------------------
                 (Millions     Fully (Millions     Fully       Net     Fully
                        of   diluted        of   diluted  earnings   diluted
                   dollars)      EPS   dollars)      EPS                 EPS
                            (Dollars)           (Dollars)
    -------------------------------------------------------------------------
    Net earnings     178.4      1.65     157.4      1.41      13.3      17.0
    Banner
     conversion
     costs after
     taxes             0.6         -       3.9      0.03
    Decrease in
     tax expense     (10.0)    (0.09)        -         -
    -------------------------------------------------------------------------
    Adjusted net
     earnings(1)     169.0      1.56     161.3      1.44       4.8       8.3
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

Quarterly Highlights

    
    (Millions of dollars, unless       2010       2009       2008     Change
     otherwise indicated)                                                 (%)
    -------------------------------------------------------------------------
    Sales
      Q1                            2,645.0    2,600.5          -        1.7
      Q2                            2,576.7    2,549.7          -        1.1
      Q3                                  -    3,513.3    3,370.0        4.3
      Q4                                  -    2,532.5    2,476.0        2.3
    -------------------------------------------------------------------------
    Net earnings
      Q1                               98.1       81.1          -       21.0
      Q2                               80.3       76.3          -        5.2
      Q3                                  -      112.6       91.9       22.5
      Q4                                  -       84.4       72.5       16.4
    -------------------------------------------------------------------------
    Adjusted net earnings(1)
      Q1                               88.7       84.1          -        5.5
      Q2                               80.3       77.2          -        4.0
      Q3                                  -      111.8       91.9       21.7
      Q4                                  -       85.9       72.5       18.5
    -------------------------------------------------------------------------
    Fully diluted net earnings
     per share (Dollars)
      Q1                               0.91       0.73          -       24.7
      Q2                               0.74       0.68          -        8.8
      Q3                                  -       1.01       0.81       24.7
      Q4                                  -       0.77       0.65       18.5
    -------------------------------------------------------------------------
    Adjusted fully diluted net
     earnings per share(1) (Dollars)
      Q1                               0.82       0.76          -        7.9
      Q2                               0.74       0.68          -        8.8
      Q3                                  -       1.01       0.81       24.7
      Q4                                  -       0.78       0.65       20.0
    -------------------------------------------------------------------------
    

First and second quarter sales for 2010 were up 1.7% and 1.1% respectively over those for 2009. These increases were achieved despite a slight drop in the value of our basket, whereas last year high food price inflation and the temporary closing of several stores of a competitor due to a labour conflict, had a positive impact on our first and second quarter sales.

Third and fourth quarter sales for 2009 were up 4.3% and 2.3% respectively over those for 2008. Effective merchandising programs allowed us to post increases. Excluding decreased tobacco sales, 2009 third and fourth quarter sales were up 5.2% and 3.2% respectively over 2008.

First quarter net earnings and fully diluted net earnings per share for 2010 were up 21.0% and 24.7% respectively over those for 2009. Excluding banner conversion costs of $0.9 million and $4.5 million before taxes recorded respectively in the first quarters of 2010 and 2009, as well as the income tax expense decrease of $10.0 million in the first quarter of 2010 further to future decreases in the Ontario tax rate, adjusted net earnings(1) were up 5.5% and adjusted fully diluted net earnings per share(1) were up 7.9%.

Second quarter net earnings and fully diluted net earnings per share for 2010 were up 5.2% and 8.8% respectively from those in 2009.

Our sales growth and ongoing efforts to improve store operations in Ontario allowed us to increase our gross margins in the third and fourth quarters of 2009.

Third quarter net earnings and fully diluted net earnings per share in 2009 were up 22.5% and 24.7% respectively from 2008. Excluding non-recurring items recorded in the third quarter of 2009, namely $2.9 million before taxes to convert our Ontario supermarkets to the Metro banner as well as an income tax expense decrease of $2.7 million, adjusted net earnings(1) and adjusted fully diluted net earnings per share(1) for the third quarter of 2009 were up 21.7% and 24.7%, compared to adjusted net earnings(1) and adjusted fully diluted net earnings per share(1) for the third quarter of 2008.

Fourth quarter net earnings and fully diluted net earnings per share in 2009 were up 16.4% and 18.5% over those for 2008. Excluding 2009 fourth quarter banner conversion costs of $2.3 million before taxes, adjusted net earnings(1) and adjusted fully diluted net earnings per share(1) for the fourth quarter of 2009 were up 18.5% and 20.0% over adjusted net earnings(1) and adjusted fully diluted net earnings per share(1) for the fourth quarter of 2008.

    
                            2010                 2009                 2008
    (Millions of      -------------------------------------------------------
     dollars)            Q1     Q2     Q1     Q2     Q3     Q4     Q3     Q4
    -------------------------------------------------------------------------
    Net earnings       98.1   80.3   81.1   76.3  112.6   84.4   91.9   72.5
    Banner conversion
     costs after taxes  0.6      -    3.0    0.9    1.9    1.5      -      -
    Decrease in tax
     expense          (10.0)     -      -      -   (2.7)     -      -      -
    -------------------------------------------------------------------------
    Adjusted net
     earnings(1)       88.7   80.3   84.1   77.2  111.8   85.9   91.9   72.5
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                            2010                 2009                 2008
    (Dollars and      -------------------------------------------------------
     per share)          Q1     Q2     Q1     Q2     Q3     Q4     Q3     Q4
    -------------------------------------------------------------------------
    Fully diluted net
     earnings          0.91   0.74   0.73   0.68   1.01   0.77   0.81   0.65
    Banner conversion
     costs after taxes    -      -   0.03      -   0.02   0.01      -      -
    Decrease in tax
     expense          (0.09)     -      -      -  (0.02)     -      -      -
    -------------------------------------------------------------------------
    Adjusted fully
     diluted net
     earnings(1)       0.82   0.74   0.76   0.68   1.01   0.78   0.81   0.65
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

Cash Position

OPERATING ACTIVITIES

Operating activities generated cash flows of $168.6 million in the second quarter and $178.1 million over the first 24 weeks of 2010, compared to $123.3 million and $174.1 million respectively in the corresponding periods of fiscal 2009. The increases in generated cash are due primarily to increased net earnings and variations in non-cash working capital.

INVESTING ACTIVITIES

Investing activities required outflows of $46.0 million in the second quarter and $254.2 million in the first 24 weeks of 2010 versus $35.2 million in the second quarter and $90.3 million in the first 24 weeks of 2009. The increase in second quarter outflows in 2010 compared with 2009 is due primarily to greater disposal of fixed assets in 2009, while the increase in 24-week outflows in 2010 compared with 2009 is attributable to the 2010 acquisition of 18 stores for valuable cash consideration of $152.2 million.

During the first 24 weeks of 2010, the Company and its retailers invested $158.0 million in our retail network, for a gross expansion of 703,400 square feet and a net expansion of 435,600 square feet or 2.3%. Major renovations and expansions of 20 stores were completed, and 11 new stores were opened.

FINANCING ACTIVITIES

Financing activities required outflows of $50.7 million and $93.4 million in the second quarter and 24-week period of 2010 versus 2009 second quarter and 24-week outflows of $21.6 million and $26.9 million. The increase in outflows between the 2010 periods and the 2009 periods is largely attributable to the greater issuance of shares in 2009, for $18.8 million in the second quarter and $36.2 million over the 24-week period, versus $2.0 million and $4.2 million for the corresponding periods of 2010, as well as to the increased redemption of Class A Subordinate shares in the second quarter and first 24 weeks of 2010 compared to the corresponding periods of 2009.

Financial Position

Despite the difficult economic environment, we do not anticipate(2) any liquidity risk and consider our financial position at the end of the second quarter of fiscal 2010 as very solid. We had an unused authorized revolving line of credit of $400.0 million. Our long-term debt corresponded to 29.9% of the combined total of long-term debt and shareholders' equity (long-term debt/total capital).

At the end of the second quarter of 2010, 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, one interest rate swap agreement in the notional amount of $50.0 million was outstanding under our Credit A Facility. This agreement provides for the exchange of variable interest payment for fixed interest payment according to the following term:

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

Giving effect to this swap agreement, at the end of the quarter, long-term indebtedness comprised $650.0 million at fixed rates ranging from 4.4925% to 5.97% and $319.3 million at variable rates which fluctuate with changes in bankers' acceptance rates.

At the end of the second quarter, we also had foreign exchange forward contracts to hedge against the effect of foreign exchange rate fluctuations on our future U.S. dollar denominated purchases. The fair value of these short-term foreign exchange forward contracts was insignificant.

FINANCIAL RATIOS

    
                                                        As at          As at
                                                     March 13,  September 26,
                                                         2010           2009
    -------------------------------------------------------------------------
    Financial structure
      Long-term debt (Millions of dollars)            1,004.9        1,004.3
      Shareholders' equity (Millions of dollars)      2,360.7        2,264.1
      Long-term debt/total capital (%)                   29.9           30.7

                                                  Fiscal 2010    Fiscal 2009
                                                    (24 weeks)     (24 weeks)
                                                 ----------------------------
    Results
      EBITDA(1)/Financial costs (Times)                  16.6           14.3
    -------------------------------------------------------------------------
    

CAPITAL STOCK, STOCK OPTIONS AND PERFORMANCE SHARE UNITS

    
                                                        As at          As at
                                                     March 13,  September 26,
                                                         2010           2009
    -------------------------------------------------------------------------
    Number of Class A Subordinate Shares
     outstanding (Thousands)                          106,643        107,830
    Number of Class B Shares outstanding
     (Thousands)                                          642            718
    Stock options:
      Number outstanding (Thousands)                    1,672          1,864
      Exercise prices (Dollars)                      19.00 to       17.23 to
                                                        39.17          39.17
      Weighted average exercise price (Dollars)         29.40          28.53
    Performance share units:
      Number outstanding (Thousands)                      311            268
      Weighted average maturity (Months)                   23             18
    -------------------------------------------------------------------------
    

NORMAL COURSE ISSUER BID PROGRAM

Under the normal course issuer bid program, the Company may repurchase up to 6,000,000 of its Class A Subordinate shares between September 8, 2009 and September 7, 2010. Since September 8, 2009, the Company has repurchased 1,702,200 Class A Subordinate shares at an average price of $36.66 for a total of $62.4 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 shares.

DIVIDENDS

On April 20, 2010, the Company's Board of Directors declared a quarterly dividend of $0.17 per Class A Subordinate Share and Class B Share payable June 8, 2010, an increase of 23.6% over last year. On an annualized basis, this dividend represents 20.7% of 2009 net earnings.

SHARE TRADING

The value of METRO shares remained in the $33.02 to $43.59 range over the first two quarters of fiscal 2010. During this period, a total of 37.4 million shares traded on the Toronto Stock Exchange. The closing price on Friday, April 9, 2010 was $41.79, compared with $34.73 at the end of fiscal 2009.

NEW ACCOUNTING POLICY RECENTLY PUBLISHED

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 enterprises with public disclosure obligations 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 information technology, internal control, 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 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 effort their
                implementation requires.
    -------------------------------------------------------------------------
    Timetable   End of our 2008 fiscal year.
    -------------------------------------------------------------------------
    Progress    Completed.
    -------------------------------------------------------------------------

    Phase 2: Standards Analysis
    -------------------------------------------------------------------------
    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 impact on the consolidated
                financial statements.
                -------------------------------------------------------------
                Disclosure analysis.
                -------------------------------------------------------------
                Preparation of draft consolidated financial statements and
                notes.
                -------------------------------------------------------------
                Identification of the collateral impact in the following
                areas:
                - information technology (IT)
                - internal control over financial reporting
                - disclosure controls and procedures
                - contracts
                - compensation
                - taxation
                - training
    -------------------------------------------------------------------------
    Timetable   We have prepared a detailed timetable that 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 as well as working group
                members' availability.
    -------------------------------------------------------------------------
    Progress    At the end of the second quarter of fiscal 2010, we began
                analysis of 38 IFRS standards and interpretations out of a
                total of approximately 50 that may 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    We have identified and begun implementation of an IT solution
                that will allow us to run parallel integrated GAAP and IFRS
                systems from the start of fiscal 2011 for the comparative
                financial statements.
    -------------------------------------------------------------------------
    

So far, we have analyzed a number of IFRS standards. We have made choices, as warranted, with regard to these standards and noted the differences between some of these standards and our current accounting policies. The most significant ones are set out in the following table:

    
    -------------------------------------------------------------------------
    Standards         Comparison between IFRS     Preliminary Findings
                      and GAAP
    -------------------------------------------------------------------------
    Borrowing costs   IFRS: We have to            We will not capitalize
                      capitalize borrowing        borrowing costs on
                      costs on qualifying         qualifying assets, as
                      assets, i.e. assets that    they are deemed to be
                      require an extended         immaterial.
                      period of preparation
                      before they are usable
                      or saleable.
                      GAAP: These borrowing
                      costs may be capitalized.
    -------------------------------------------------------------------------
    Fixed assets      IFRS: After initial         We will continue to use
                      recognition, we can         the cost model in order
                      measure our fixed assets    to avoid balance sheet
                      using the cost model or     variations in the fair
                      the revaluation model.      value of fixed assets and
                      GAAP: The revaluation       the corresponding impact
                      model is not allowed.       on P&L statements.
    	             ---------------------------------------------------------
                      IFRS: We have to amortize   The roof and HVAC system
                      our fixed assets based      will be amortized
                      on their components.        separately from the
                      GAAP: Component             building.
                      identification rules are    The carrying value of
                      less stringent.             these assets and
                                                  corresponding depreciation
                                                  expense will be different,
                                                  but the impact should not
                                                  be material.
    -------------------------------------------------------------------------
    Investment        IFRS: After initial         We will continue to use
    property          recognition, we can         the cost model in order
                      measure our investment      to avoid balance sheet
                      property using the cost     variations in the fair
                      model or the revaluation    value of investment
                      model.                      property and the
                      GAAP: The revaluation model corresponding impact on
                      is not allowed.             P&L statements.
    -------------------------------------------------------------------------
    Impairment of     IFRS: We have to conduct    Our impairment testing
    assets            impairment testing of our   will be conducted at the
                      assets at the independent   level of each store and
                      cash generating unit (CGU)  each warehouse that
                      level.                      supplies external clients.
                      GAAP: The unit is defined   Impairment testing of
                      as it generates both        corporate assets and
                      independent cash inflows    goodwill will be conducted
                      and outflows.               at the level of groups of
                                                  CGUs.
                                                  Impairment testing results
                                                  may be different, but
                                                  their impact should not be
                                                  material.
    -------------------------------------------------------------------------
    Share-based       IFRS: When stock option     The compensation expense
    payment           awards vest gradually,      will have to be recognized
                      each tranche is to be       over the expected term of
                      considered as a             each vested tranche. It
                      separate award.             will be different, but the
                      GAAP: The gradually         impact should not be
                      vested tranches could be    material.
                      considered as a single
                      award.
    -------------------------------------------------------------------------
    Earnings per      IFRS: We have to            Diluted earnings per share
    share             independently determine,    will be different, but the
                      for the interim period      impact should not be
                      and the year-to-date,       material.
                      the number of potentially
                      dilutive shares to
                      consider in calculating
                      diluted earnings per
                      share.
                      GAAP: The number is
                      independently determined
                      for the interim period,
                      but the year-to-date is
                      a weighted average of the
                      periods.
    -------------------------------------------------------------------------
    Customer          IFRS: As we are acting as   Sales will be different,
    loyalty           an authorized agent of      but the impact should not
    programs          the Air Miles(TM) reward    be material.
                      program, we have to         There will be no impact on
                      record the cost of points   net earnings.
                      as a reduction in sales.
                      GAAP: No standard exists,
                      but the Canadian practice
                      is to record the cost of
                      points in the cost of
                      sales and operating
                      expenses.
    -------------------------------------------------------------------------
    Employee          IFRS: We have the choice    We will recognize full
    Benefits          of deferring recognition    actuarial gains and losses
                      of actuarial gains and      immediately in
                      losses using the corridor   comprehensive income,
                      approach or of              without impacting P&L.
                      immediately recognizing
                      actuarial gains and
                      losses in full in P&L or
                      in comprehensive income.
                      GAAP: We have a similar
                      choice of accounting
                      policy without the
                      possibility of immediate
                      recognition to
                      comprehensive income.
                    ---------------------------------------------------------
                      IFRS: We have to            At the date of transition,
                      recognize past service      we will recognize past
                      cost for vested benefits    service cost for vested
                      immediately in P&L.         benefits in retained
                      GAAP: Past service cost     earnings. After the
                      has to be amortized in a    changeover, past service
                      straight line over the      cost for vested benefits
                      average remaining service   will be recognized in P&L.
                      period of active
                      participants until the
                      full eligibility date,
                      regardless of vesting.
                    ---------------------------------------------------------
                      IFRS: Recognition of        Valuation of future
                      defined benefit assets      obligations calculated on
                      is limited to the           a going concern and
                      availability of future      solvency basis should
                      contribution reductions     decrease the availability
                      based on future             of future contribution
                      obligations calculated      reductions and increase
                      on an accounting, going     our defined benefit
                      concern and solvency        obligations. We will
                      basis.                      recognize differences at
                      GAAP: Recognition of        the date of transition in
                      defined benefit assets      retained earnings, and
                      is limited to the           future variations in
                      availability of future      comprehensive income.
                      contribution reductions
                      based on future
                      obligations calculated
                      solely on an accounting
                      basis.
                    ---------------------------------------------------------
                      IFRS: A multi-employer      Our multi-employer plans
                      plan with implicit          are defined benefit plans,
                      obligations shall be        however they will be
                      accounted for as a          accounted for as if they
                      defined benefit plan.       were defined contribution
                      However, when               plans since sufficient
                      sufficient information      information is not
                      is not available, it        available to accurately
                      shall be accounted for      determine our obligations.
                      as if it were a defined     Additional information
                      contribution plan.          regarding this situation
                      Additional information      will have to be disclosed.
                      shall be added to the
                      financial statements.
                      Furthermore, if there
                      is a contractual
                      commitment, it shall be
                      recognized in P&L.
                      GAAP: A multi-employer
                      plan is generally
                      accounted for as a
                      defined contribution
                      plan because
                      information is usually
                      not available. However,
                      if sufficient
                      information is
                      available, it must be
                      accounted for as a
                      defined benefit plan.
                      The employee future
                      benefits standard
                      doesn't specifically
                      address the accounting
                      treatment of a
                      contractual agreement.
                      However, other GAAP
                      standards cover this
                      type of commitment and
                      the accounting
                      treatment is the same
                      as IFRS.
    -------------------------------------------------------------------------
    Joint ventures    IFRS: We may account        We will use the equity
                      for our interests in        method.
                      joint ventures using        There will be no material
                      proportionate               impact on the presentation
                      consolidation or the        of financial statements
                      equity method.              and no impact on net
                      GAAP: We have to account    earnings.
                      for them using
                      proportionate
                      consolidation.
    -------------------------------------------------------------------------
    

We have also made choices concerning certain exemptions from retrospective application at the time of changeover provided by IFRS 1 and which are set out in the following table:

    
    -------------------------------------------------------------------------
    Optional          Preliminary Findings
    Exemptions
    -------------------------------------------------------------------------
    Borrowing costs   This exemption allows us not to capitalize borrowing
                      costs on our qualifying assets before the IFRS
                      transition date.
                      Given that we will not capitalize these borrowing
                      costs, we will not use the exemption.
    -------------------------------------------------------------------------
    Deemed cost       On the IFRS transition date, we can recognize each
                      fixed asset and investment property at its deemed
                      cost, which shall be its fair value.
                      We shall analyze our fixed assets and investment
                      property to determine whether or not to use the
                      exemption.
    -------------------------------------------------------------------------
    Share-based       This exemption would relieve us from applying the
     payment          standard to equity instruments acquired before the
                      IFRS transition date.
                      We have decided not to avail ourselves of this
                      exemption.
    -------------------------------------------------------------------------
    Employee          The exemption allows us to recognize all actuarial
     benefits         gains or losses at the date of transition to IFRS in
                      retained earnings, regardless of the subsequent
                      accounting treatment chosen.
                      We have chosen to take advantage of this exemption.
    -------------------------------------------------------------------------
    

Other key analyses are in progress or will be undertaken shortly. Consequently, preliminary findings on them do not appear in the above tables. Any choices made or variances identified will be communicated once the analyses have been completed. Furthermore, the release of International Accounting Standards Board discussion papers, exposure drafts and new standards could change our preliminary findings.

Press Release

This press release sets out the financial position and consolidated results of METRO INC. on March 13, 2010. 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 26, 2009 and related notes and MD&A presented in the Company's 2009 Annual Report. This press release is based upon information as at April 9, 2010 unless otherwise stated. Additional information, including the Certification of Interim Filings letters for the quarter ended March 13, 2010 signed by the President and Chief Executive Officer and the Senior Vice-President, Chief Financial Officer and Treasurer, is also available on the SEDAR website at: www.sedar.com.

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.

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 "confident", "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 2010 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 2009 Annual Report which could have an impact on these statements. We believe these statements to be reasonable and pertinent as at the date of publication of this press release and represent our expectations. The Company does not intend to update any forward-looking statement contained herein, except as required by applicable law.

Conference Call

Financial analysts and institutional investors are invited to participate in a conference call on the 2010 second quarter results at 10:00 a.m. (EDT) on Wednesday, April 21, 2010. To access the conference call, please dial (514) 807-9895 or (647) 427-7450 or (888) 231-8191. 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 13, 2010 and March 14, 2009
    (Unaudited) (Millions of dollars, except for net earnings per share)

                                           12 weeks              24 weeks
                                         Fiscal Year           Fiscal Year
                                  ----------            ----------
                                       2010       2009       2010       2009
    -------------------------------------------------------------------------
    Sales                         $ 2,576.7  $ 2,549.7  $ 5,221.7  $ 5,150.2
    Cost of sales and operating
     expenses (note 8)             (2,411.6)  (2,395.2)  (4,884.4)  (4,832.1)
    Share of earnings in a public
     company subject to
     significant influence              6.5        9.4       17.3       20.5
    Banner conversion costs
     (note 3)                             -       (1.3)      (0.9)      (5.8)
    -------------------------------------------------------------------------
    Earnings before financial
     costs, taxes, depreciation
     and amortization                 171.6      162.6      353.7      332.8
    Depreciation and amortization     (47.0)     (42.6)     (93.7)     (84.2)
    -------------------------------------------------------------------------
    Operating income                  124.6      120.0      260.0      248.6
    Financial costs, net (note 5)     (10.3)     (10.8)     (21.3)     (23.3)
    -------------------------------------------------------------------------
    Earnings before income taxes      114.3      109.2      238.7      225.3
    Income taxes (note 6)             (34.0)     (32.9)     (60.3)     (67.9)
    -------------------------------------------------------------------------
    Net earnings                  $    80.3  $    76.3  $   178.4  $   157.4
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net earnings per share
     (Dollars) (note 7)
      Basic                            0.75       0.69       1.66       1.42
      Fully diluted                    0.74       0.68       1.65       1.41
    -------------------------------------------------------------------------
                                  ----------            ----------
    See accompanying notes


    Consolidated Balance Sheets
    (Unaudited) (Millions of dollars)
                                                    ----------
                                                        As at          As at
                                                     March 13,  September 26,
                                                         2010           2009
    -------------------------------------------------------------------------
    ASSETS
    Current assets
    Cash and cash equivalents                       $    71.9      $   241.4
    Accounts receivable                                 306.5          315.8
    Inventories (note 8)                                708.5          681.3
    Prepaid expenses                                     23.3            8.3
    Income taxes receivable                               7.1            6.6
    Future income taxes                                  14.1           29.8
    -------------------------------------------------------------------------
                                                      1,131.4        1,283.2

    Investments and other assets                        222.5          204.0
    Fixed assets                                      1,339.4        1,305.8
    Intangible assets                                   318.3          325.4
    Goodwill                                          1,598.5        1,478.6
    Future income taxes                                   3.7            3.6
    Accrued benefit asset                                66.6           65.6
    -------------------------------------------------------------------------
                                                    $ 4,680.4      $ 4,666.2
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current liabilities
    Bank loans                                      $     0.4      $     0.8
    Accounts payable                                  1,039.6        1,111.2
    Income taxes payable                                 35.7           24.8
    Future income taxes                                  11.0            9.2
    Current portion of long-term debt                     4.6            6.4
    -------------------------------------------------------------------------
                                                      1,091.3        1,152.4
    Long-term debt                                    1,004.9        1,004.3
    Accrued benefit liability                            49.0           49.0
    Future income taxes                                 149.1          165.0
    Other long-term liabilities                          25.4           31.4
    -------------------------------------------------------------------------
                                                      2,319.7        2,402.1
    -------------------------------------------------------------------------
    Shareholders' equity
    Capital stock (note 9)                              712.5          716.7
    Contributed surplus (note 10)                         4.1            3.7
    Retained earnings                                 1,645.1        1,545.7
    Accumulated other comprehensive income
     (note 11)                                           (1.0)          (2.0)
    -------------------------------------------------------------------------
                                                      2,360.7        2,264.1
    -------------------------------------------------------------------------
                                                    $ 4,680.4      $ 4,666.2
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                    ----------
    See accompanying notes


    Consolidated Statements of Cash Flows
    Periods ended March 13, 2010 and March 14, 2009
    (Unaudited) (Millions of dollars)

                                           12 weeks              24 weeks
                                         Fiscal Year           Fiscal Year
                                  ----------            ----------
                                       2010       2009       2010       2009
    -------------------------------------------------------------------------
    Operating activities
    Net earnings                  $    80.3  $    76.3  $   178.4  $   157.4
    Non-cash items
      Share of earnings in a
       public company subject to
       significant influence           (6.5)      (9.4)     (17.3)     (20.5)
      Depreciation and
       amortization                    47.0       42.6       93.7       84.2
      Amortization of deferred
       financing costs                  0.4        0.5        0.9        1.0
      Loss (gain) on disposal and
       write-off of fixed and
       intangible assets                0.1       (0.6)       0.2       (0.6)
      Interest income on
       investments                        -       (0.2)         -       (0.2)
      Future income taxes               4.4        5.8        1.0       11.6
      Stock-based compensation
       cost                             1.3        1.0        2.5        2.1
      Difference between amounts
       paid for employee future
       benefits and current
       period cost                     (1.3)      (2.2)      (1.0)      (8.7)
    -------------------------------------------------------------------------
                                      125.7      113.8      258.4      226.3
    Net change in non-cash
     working capital items
     related to operations             42.9        9.5      (80.3)     (52.2)
    -------------------------------------------------------------------------
                                      168.6      123.3      178.1      174.1
    -------------------------------------------------------------------------
    Investing activities
    Business acquisition (note 2)     (15.5)         -     (152.2)         -
    Net change in investments and
     other assets                      (1.6)      (2.5)      (4.4)      (2.7)
    Dividends from public company
     subject to significant
     influence                          0.9        0.8        1.6        1.5
    Additions to fixed assets         (22.3)     (37.0)     (88.3)     (89.1)
    Proceeds on disposal of fixed
     assets                             1.9       11.1        4.3       11.8
    Additions to intangible assets     (9.4)      (7.6)     (15.2)     (11.8)
    -------------------------------------------------------------------------
                                      (46.0)     (35.2)    (254.2)     (90.3)
    -------------------------------------------------------------------------
    Financing activities
    Net change in bank loans           (7.3)      (2.1)      (0.1)       0.2
    Issuance of shares (note 9)         2.0       18.8        4.2       36.2
    Redemption of shares (note 9)     (22.9)     (13.8)     (55.9)     (23.1)
    Acquisition of treasury shares
     (note 9)                             -       (4.3)         -       (4.3)
    Performance share units cash
     settlement (note 10)              (0.5)         -       (0.5)         -
    Increase in long-term debt          0.3        1.1        2.1        3.8
    Repayment of long-term debt        (1.7)      (3.4)      (5.6)      (5.7)
    Net change in other long-term
     liabilities                       (2.3)      (2.6)      (4.5)      (4.9)
    Dividends paid                    (18.3)     (15.3)     (33.1)     (29.1)
    -------------------------------------------------------------------------
                                      (50.7)     (21.6)     (93.4)     (26.9)
    -------------------------------------------------------------------------
    Net change in cash and cash
     equivalents                       71.9       66.5     (169.5)      56.9
    Cash and cash equivalents -
     beginning of period                  -      142.1      241.4      151.7
    -------------------------------------------------------------------------
    Cash and cash equivalents -
     end of period                $    71.9  $   208.6  $    71.9  $   208.6
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Supplementary information
    Interest paid                       1.9        1.0       21.9       23.3
    Income taxes paid                  28.6       29.2       51.3       52.9
    -------------------------------------------------------------------------
                                  ----------            ----------
    See accompanying notes


    Consolidated Statements of Retained Earnings
    24-week periods ended March 13, 2010 and March 14, 2009
    (Unaudited) (Millions of dollars)

                                                             Fiscal Year
                                                    ----------
                                                         2010           2009
    -------------------------------------------------------------------------
    Balance - beginning of period                   $ 1,545.7      $ 1,366.8
    Net earnings                                        178.4          157.4
    Dividends                                           (33.1)         (29.1)
    Share redemption premium (note 9)                   (45.9)         (18.7)
    -------------------------------------------------------------------------
    Balance - end of period                         $ 1,645.1      $ 1,476.4
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                    ----------
    See accompanying notes


    Consolidated Statements of Comprehensive Income
    Periods ended March 13, 2010 and March 14, 2009
    (Unaudited) (Millions of dollars)

                                           12 weeks              24 weeks
                                         Fiscal Year           Fiscal Year
                                  ----------            ----------
                                       2010       2009       2010       2009
    -------------------------------------------------------------------------
    Net earnings                  $    80.3  $    76.3  $   178.4  $   157.4
    Other comprehensive income
     (note 11)
      Change in fair value of
       derivative designated as
       cash flow hedge                  0.5       (0.4)       1.5       (3.1)
      Corresponding income taxes       (0.2)       0.1       (0.5)       0.9
    -------------------------------------------------------------------------
    Comprehensive income          $    80.6  $    76.0  $   179.4  $   155.2
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                  ----------            ----------
    See accompanying notes


    Notes to Interim Consolidated Statements
    Periods ended March 13, 2010 and March 14, 2009
    (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 26, 2009. 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 2009 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. Business Acquisition

In the first quarter of 2010, the Company acquired 18 affiliated stores which it already supplied. The total purchase price was $152.2 in cash.

The acquisition was accounted for using the purchase method. The stores' results have been consolidated as of their respective acquisition dates. The preliminary total purchase price allocation was as follows:

    
    Cash consideration paid                                          $ 152.2
    Net assets acquired
      Inventories                                                       15.0
      Other current assets                                               0.7
      Fixed assets                                                      22.8
      Short-term liabilities assumed                                    (3.6)
    -------------------------------------------------------------------------
    Total net assets acquired                                           34.9
    -------------------------------------------------------------------------
    Excess consideration paid over net assets acquired               $ 117.3
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

Management is currently carrying out a more specific analysis and changes will be made to the allocation of the excess consideration paid over net assets acquired as the information becomes available. Amoung others, since the measurement of the fair value of fixed assets had not yet been completed at the time of the preliminary allocation, fixed assets have been presented at cost. Furthermore, the Company has not completed the assessment of possible costs related to the restructuring and integration of activities potentially giving rise to the recognition of a liability in the allocation of the purchase price. As a result, the actual amounts allocated to the identifiable assets acquired and liabilities assumed and the related operating results may vary according to the amounts initially recorded.

The tax treatment of the goodwill will be as eligible capital property with the related tax deductions.

3. Banner Conversion Costs

In the first quarter of 2010, the Company completed the conversion of its 159 stores of its five Ontario banners to the Metro banner begun in the summer of 2008. Therefore, no conversion cost was recorded in the second quarter of 2010 (2009 - $1.3). For the first 24-week period of 2010, conversion costs totalled $0.9 (2009 - $5.8).

4. Employee Future Benefits

The Company maintains several defined benefit and defined contribution plans which provide most participants with pension and other retirement benefits and other post-employment benefits. The Company's defined contribution plan and defined benefit plan expense was as follows:

    
                                                      12 weeks
                                                    Fiscal Year
                                  --------------------
                                            2010                  2009
    -------------------------------------------------------------------------
                                    Pension      Other    Pension      Other
                                      plans      plans      plans      plans
    -------------------------------------------------------------------------
    Defined contribution plans    $     5.4  $     0.2  $     6.2  $     0.2
    -------------------------------------------------------------------------
    Defined benefit plans
    Current service costs               5.5        0.4        4.7        0.3
    Interest cost                       8.1        0.5        7.8        0.5
    Projected return on plan assets    (9.7)         -       (9.2)         -
    Amortization of actuarial
     losses (gains) and past
     service costs                      0.3          -        0.4       (0.1)
    Plan amendments                       -       (0.1)         -          -
    -------------------------------------------------------------------------
                                        4.2        0.8        3.7        0.7
    -------------------------------------------------------------------------
                                  $     9.6  $     1.0  $     9.9  $     0.9
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                  --------------------

                                                      24 weeks
                                                    Fiscal Year
                                   --------------------
                                            2010                  2009
    -------------------------------------------------------------------------
                                    Pension      Other    Pension      Other
                                      plans      plans      plans      plans
    -------------------------------------------------------------------------
    Defined contribution plans    $    12.5  $     0.3  $    12.8  $     0.3
    -------------------------------------------------------------------------
    Defined benefit plans
    Current service costs              10.9        0.7        9.6        0.6
    Interest cost                      16.2        0.9       15.5        0.9
    Projected return on plan assets   (19.3)         -      (18.3)         -
    Amortization of actuarial
     losses (gains) and past
     service costs                      0.7          -        0.7       (0.1)
    Plan amendments                       -       (0.1)         -          -
    -------------------------------------------------------------------------
                                        8.5        1.5        7.5        1.4
    -------------------------------------------------------------------------
                                  $    21.0  $     1.8  $    20.3  $     1.7
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                  --------------------


    5. Financial Costs, net

                                           12 weeks              24 weeks
                                         Fiscal Year           Fiscal Year
                                  ----------            ----------
                                       2010       2009       2010       2009
    -------------------------------------------------------------------------
    Short-term interest           $     0.4  $     0.3  $     0.9  $     0.9
    Long-term interest                  9.9       10.7       20.2       22.8
    Amortization of deferred
     financing costs                    0.4        0.5        0.9        1.0
    Interest income                    (0.4)      (0.7)      (0.7)      (1.4)
    -------------------------------------------------------------------------
                                  $    10.3  $    10.8  $    21.3  $    23.3
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                  ----------            ----------


    6. Income Taxes

    The effective income tax rates were as follows:

                                           12 weeks              24 weeks
                                         Fiscal Year           Fiscal Year
                                  ----------            ----------
    (Percentage)                       2010       2009       2010       2009
    -------------------------------------------------------------------------
    Combined statutory income tax
     rate                              30.5       31.2       30.5       31.3
    Changes
      Impact on future taxes
       of 4.0% total future
       decreases in Ontario tax
       rate                               -          -       (4.2)         -
      Share of earnings in a
       public company subject to
       significant influence           (1.0)      (1.4)      (1.2)      (1.5)
      Others                            0.2        0.3        0.2        0.3
    -------------------------------------------------------------------------
                                       29.7       30.1       25.3       30.1
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                  ----------            ----------


    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              24 weeks
                                         Fiscal Year           Fiscal Year
                                  ----------            ----------
    (Millions)                         2010       2009       2010       2009
    -------------------------------------------------------------------------
    Weighted average number of
     shares outstanding - Basic       107.6      111.2      107.7      110.9
    Dilutive effect under stock
     option and performance
     share units plans                  0.5        0.9        0.5        0.9
    -------------------------------------------------------------------------
    Weighted average number of
     shares outstanding -
     Diluted                          108.1      112.1      108.2      111.8
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                  ----------            ----------


    8. Inventories

    Inventories were detailed as follows:

                                                        ----------
                                                                       As at
                                                            As at  September
                                                         March 13,        26,
                                                             2010       2009
    -------------------------------------------------------------------------
    Warehouse inventories                               $   295.1  $   304.0
    Retail inventories                                      413.4      377.3
    -------------------------------------------------------------------------
                                                        $   708.5  $   681.3
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                        ----------

    The cost of inventories expensed for the 12-week period ended March 13,
    2010 totalled $2,105.7 (2009 - $2,101.9) and $4,265.8 for the 24-week
    period of 2010 (2009 - $4,241.8).


    9. Capital Stock

    Outstanding

                          Class A                  Class B             Total
                     Subordinate Shares             Shares
                  ----------------------- -----------------------
                      Number                  Number
                  (Thousands)             (Thousands)
    -------------------------------------------------------------------------
    Balance as at
     September 26,
     2009            107,830  $    715.3         718  $      1.4  $    716.7
    Shares issued
     for cash            199         4.2           -           -         4.2
    Shares redeemed
     for cash,
     excluding
     premium of
     $45.9            (1,515)      (10,0)          -           -       (10.0)
    Released
     treasury
     shares               53         0.3           -           -         0.3
    Stock options
     exercised             -         1.3           -           -         1.3
    Conversion of
     Class B
     Shares into
     Class A
     Subordinate
     Shares               76         0.1         (76)       (0.1)          -
    -------------------------------------------------------------------------
    Balance as at
     March 13,
     2010            106,643  $    711.2         642  $      1.3  $    712.5
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Stock Option Plan

    The outstanding options and the changes during the 24-week period ended
    March 13, 2010 were summarized as follows:

                                                                    Weighted
                                                                     average
                                                                    exercise
                                                      Number           price
                                                  (Thousands)       (Dollars)
    -------------------------------------------------------------------------
    Balance as at September 26, 2009                    1,864          28.53
    Exercised                                            (192)         21.02
    -------------------------------------------------------------------------
    Balance as at March 13, 2010                        1,672          29.40
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

The exercise prices of the outstanding options ranged from $19.00 to $39.17 as at March 13, 2010 with expiration dates up to 2016. 352,520 of those options could be exercised at a weighted average exercise price of $26.82.

Compensation expense for these options amounted to $0.6 for the 12-week period ended March 13, 2010 (2009 - $0.5) and to $1.1 for the 24-week period of 2010 (2009 - $1.0).

Performance Share Unit Plan

Performance share units (PSUs) outstanding and changes during the 24-week period ended March 13, 2010 were summarized as follows:

    

                                                                      Number
                                                                      (Units)
    -------------------------------------------------------------------------
    Balance as at September 26, 2009                                 267,570
    Granted                                                          107,583
    Settled                                                          (63,794)
    Cancelled                                                           (389)
    -------------------------------------------------------------------------
    Balance as at March 13, 2010                                     310,970
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

Class A Subordinate Shares of the Company are held in trust for participants until the PSUs vest or are cancelled. The trust, considered a variable interest entity, is consolidated in the Company's financial statements with the cost of the acquired shares recorded as treasury shares in reduction of capital stock.

As at March 13, 2010, 204,581 shares were held in trust for participants until the PSUs shall have vested or been cancelled (as at September 26, 2009 - 257,255 shares).

The compensation expense comprising all of these PSUs amounted to $0.7 for the 12-week period ended March 13, 2010 (2009 - $0.5) and to $1.4 for the 24-week period of fiscal 2010 (2009 - $1.1).

    
    10. Contributed Surplus

    -------------------------------------------------------------------------
    Balance as at September 26, 2009                                 $   3.7
    Stock-based compensation cost                                        2.5
    Stock options exercised                                             (1.3)
    Released treasury shares                                            (0.3)
    PSUs cash settlement                                                (0.5)
    -------------------------------------------------------------------------
    Balance as at March 13, 2010                                     $   4.1
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    11. Accumulated Other Comprehensive Income

    Derivative designated as cash flow hedge constitutes the sole component of
Accumulated Other Comprehensive Income. The changes during the 24-week periods
ended March 13, 2010 and March 14, 2009 were as follows:

                                                  -------------
                                                         2010           2009
    -------------------------------------------------------------------------

    Balance - beginning of period                   $    (2.0)     $    (1.0)
    Change in fair value of designated
     derivative net of income taxes of $0.5 (2009
     - $0.9)                                              1.0           (2.2)
    Balance - end of period                         $    (1.0)     $    (3.2)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                        ----------
    

%SEDAR: 00001783EF

SOURCE METRO INC.

For further information: For further information: Richard Dufresne, Senior Vice-President, Chief Financial Officer and Treasurer, (514) 643-1003; Investor 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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