2006 FIRST QUARTER HIGHLIGHTS

• 74.5% sales growth
• Net earnings increase of 28.5% before special costs
• 5% increase in quarterly dividend to $0.105 per share

(Montréal, January 24, 2006)
For the first quarter, METRO INC. has realized net earnings of $32 million as compared to $38.6 million for the same quarter last year, and fully diluted net earnings per share of $0.28 versus $0.40 last year. Without taking into account integration and rationalization costs of $18.3 million and an additional tax expense of $5.3 million resulting from an increase in future tax liabilities due to a 3% hike in Quebec’s tax rate by 2009, our resulting adjusted net earnings stand at $49.6 million, up 28.5% from last year. Adjusted fully diluted net earnings per share rose to $0.43 compared to $0.40 for the same quarter last year, a 7.5% increase.

Results of Operations
We have realized net earnings of $32 million in the first quarter of 2006 compared with $38.6 million for the corresponding quarter of the previous fiscal year, and fully diluted net earnings per share of $0.28 versus $0.40 last year. An additional tax expense of $5.3 million was recorded in the first quarter as well as integration and rationalization costs of $18.3 million. Without these items, net earnings for the first quarter would have been $49.6 million on a adjusted basis, up 28.5% over the corresponding quarter and adjusted fully diluted net earnings per share would have been $0.43 compared to $0.40 last year, a 7.5% increase.

We continued our evaluation of our integration and rationalization plan following the acquisition of A&P Canada. We anticipate such costs will total $55 million over the next two fiscal years for the plan’s implementation.

SALES
First quarter sales increased 74.5 % to $2,524.1 million compared with $1,446.1 million for the same quarter last year. Including A&P Canada stores, same-store sales rose 0.9%. Without taking into account the $1,070.9 million increase in sales resulting from the acquisition of A&P Canada, the sales increase would have been 0.5%, and 3.3 % excluding the following items:

Together with the retailers, we invested $79.7 million in the first quarter, resulting in a net increase of 233,000 square feet, an increase of 1.3% for our retail network. Major expansions and renovations were completed in 9 stores, while 11 new stores were opened

INTEGRATION AND RATIONALIZATION COSTS
During the first quarter, we continued the evaluation of our integration and rationalization plan following the acquisition of A&P Canada. We have identified three main lines, namely stores and distribution centres, common services, and implementing our information systems at A&P Canada. Regarding Ontario stores, we expect to convert some stores to different banners and to close a few others. We will also streamline both common services shared by Québec and Ontario operations, and our distribution centres operations.

Total anticipated costs over the next two fiscal years are $55 million, which includes the $18.3 million incurred in the first quarter of 2006. In the coming quarters, additional impacts of the plan, with regard to A&P Canada operations, will be presented in the purchase price allocation as they are evaluated.

Integration and Rationalization Costs
(Millions of dollars)

EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (EBITDA) (1)
Earnings before interest, taxes, depreciation and amortization for the first quarter were $107.7 million, representing 4.3% of sales, compared to $72.1 million or 5% for the same quarter last year. Without taking into account the $18.3 million in integration and rationalization costs, EBITDA as a percentage of sales would be 5%. Following the acquisition of A&P Canada, we forecasted $60 million in synergies of which $35 million would be realized in the first year. In the first quarter, we realized $7.9 million in synergies, mainly resulting from lower resale good costs. First quarter earnings from our investment in Alimentation Couche-Tard Inc. were $6.8 million compared to $5.2 million for the same quarter last year.

(1) Earnings are presented for information purposes only. They do not have a standardized meaning prescribed by Canadian GAAP and therefore may not be comparable to similar measures presented by other public companies.

INTEREST, DEPRECIATION AND AMORTIZATION
Total depreciation and amortization expense for the first quarter rose to $38.8 million compared with $17 million last year. This increase results primarily from A&P Canada for $20.6 million. First quarter interest expenses totalled $15.5 million versus $0.6 million last year. This increase results primarily from financing for the acquisition of A&P Canada. First quarter interest rates averaged 4.7% compared with 3.6% for the corresponding quarter of the previous fiscal year.

INCOME TAXES
The income tax expense of $21.4 million for the first quarter of 2006 represents an effective tax rate of 40.1% compared with $15.9 million and an effective tax rate of 29.2% for the corresponding quarter last year. During the first quarter, an approval milestone was met with regards to the Québec government’s budget tabled on April 21, 2005 providing among other things for increase of large businesses tax rates from 8.9% to 11.9% planned between January 1, 2006 to January 1, 2009. Thus, we have recorded in the first quarter an increase of $5.3 million in both our future income tax liabilities and tax expenses corresponding to the future 3% Québec income tax increase that will apply to our future tax liabilities. Not taking this additional expense into account, the effective tax rate would have been 30.2% in the first quarter of 2006. The 1% statutory Québec tax rate increase effective January 1, 2006 represents a 0.7% tax impact on the effective tax rate for the first quarter and for fiscal 2006.

NET EARNINGS
First quarter net earnings reached $32 million versus $38.6 million for the same quarter last year. Fully diluted net earnings per share were $0.28 versus $0.40 last year. Without taking into account integration and rationalization costs of $18.3 million and the additional tax expense of $5.3 million, adjusted net earnings(2) would be $49.6 million, up 28.5% from the same quarter last year. Net earnings as a percentage of sales would have been 2% compared to 2.7% last year. Adjusted fully diluted net earnings per share would have been $0.43, up 7.5% from last year.

(2) These earnings are presented for information purposes only. They do not have a standardized meaning prescribed by Canadian GAAP and therefore may not be comparable to similar measures presented by other public companies

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OPERATING ACTIVITIES
Operating activities required outflows of $53 million in the first quarter of 2006 compared to outflows of $51.9 million in 2005. Each first quarter, the holiday period results in increased accounts receivable and inventories, outflows are used for this purpose. Things generally turn around in the second quarter with operating activities generating cash flows throughout the rest of the fiscal year.

INVESTMENT ACTIVITIES
Investing activities required outflows of $47.7 million in the first quarter of 2006 compared to $33.4 million in 2005. This increase is due primarily to the acquisition of additional fixed assets linked to the increased size of the Company.

FINANCING ACTIVITIES
Cash flows from financing activities totalled $88.4 million in the first quarter of 2006 compared to $60.1 million in 2005. During the first quarter, the Company issued $200 million worth of Series A 10-year medium-term notes at a nominal interest rate of 4.98% and $400 million worth of Series B 30 year notes at a nominal interest rate of 5.97%. The amounts received from these issues were used to repay the balance of the Credit Facility B and $100 million of the $750 million Credit Facility A.

Financial Position
Our financial position is very solid at the end of the first quarter with a ratio of long-term debt to shareholder equity of 0.85 : 1. With interest rate swap contracts for a notional amount of $150 million of Credit Facility A entered in the first quarter, we were able to exchange variable interest payments for fixed interest rate payments in accordance with the following terms:

In the first quarter, the picture of our main long-term debts was as follows:

Given the interest rate swap contracts at the end of the first quarter, we have the equivalent of $750 million of our long-term debt at fixed rates varying from 4.6480% to 5.97% and $500 million at variable rates that fluctuate with changes in banker’s acceptance rates.

CAPITAL STOCK AND STOCK OPTIONS

STOCK REDEMPTION PROGRAM
During the first quarter of fiscal 2006, no shares were redeemed whereas 384,500 Class A Subordinate Shares were redeemed in the first quarter of fiscal 2005. Under the stock redemption program approved by the Board of Directors last year, since February 4, 2005, the Company has purchased in the normal course of business 605,500 of its Class A Subordinate Shares at an average price of $27.35 per share. The redemption program will not be renewed this year as the Company will use its excess cash to pay down its debt.

DIVIDENDS
On January 23, 2006, the Company’s Board of Directors declared a quarterly dividend of $0.105 per Class A Subordinate Share and Class B Share payable March 2, 2006, an increase of 5% over the dividend for the corresponding quarter last year. On an annualized basis, this dividend represents 25% of 2005 net earnings.

SHARE TRADING
The value of METRO shares remained in the range of $29.11 to $36 over the first quarter of fiscal 2006. During this period, a total of 11.1 million shares were traded on the Toronto Stock Exchange. The closing price on Friday, January 13, 2006 was $30.32, compared with $34.25 at the end of fiscal 2005, a decrease of 11.5%.

Subsequent Event
On December 22, 2005, the credit agreement was amended and restated from its original version signed on August 12, 2005 reflecting, in particular, the $600 million Credit Facilities repayment made by the Company when $600 million of medium-term notes were issued on October 12, 2005, and provided for the release of guarantees granted by the Company’s main subsidiaries.

The above-mentioned instrument released the guarantees related to the medium-term notes granted by the main subsidiaries of METRO INC. under the deed of trust dated September 30, 2005

Outlook
“Over the next few quarters, we will complete our purchase price allocation for A&P Canada in order to present it in our financial statements, and continue to work toward achieving combined annual synergies estimated at $60 million, starting with $35 million in 2006 and an additional $25 million in 2007. We will also work on implementing our integration and rationalization plan, and our information systems to A&P Canada’s operations,” stated the President and Chief Executive Officer, Mr. Pierre H. Lessard.

Conference Call
Financial analysts are invited to participate in a conference call at 4 o’clock p.m. EDT January 24, 2006 on the first quarter results of fiscal 2006. To access the conference call, please dial 416-644-3423 or 514-807-8791. The media and public are invited to listen to the call in real time or delayed time on the METRO INC. Web site at www.metro.ca.

Projections
Any statement contained in the present press release which does not constitute an historic fact, may be deemed a projection. Verbs such as “believe”, “foresee”, “estimate” and other similar expressions appearing in this press release generally indicate projections. These projections do not provide guarantees as to the future performance of METRO INC. and are subject to risks, both known and unknown, as well as uncertainties which may cause the outlook, profitability and actual results of METRO INC. to differ significantly from the profitability or future results stated or implied in these projections.