The company told shareholders at its annual meeting on Tuesday that suggestions that it will use the money for an acquisition are pure "speculation" at this point.
Chief executive Eric La Fleche later told reporters that Metro will examine all acquisition opportunities for growth and cost synergies, but that no deal is "imminent."
"Organic growth is a challenge but we've met that challenge over the past years and we hope to continue to do that ... (but) acquisitions are an interesting alternative if something that's worthwhile comes about," he told a news conference.
Industry observers have speculated that Metro could use the estimated $380 million in net proceeds from the sale of stock in Couche-Tard, a convenience store and fuel station operator, for either an acquisition or to reward shareholders.
Possible targets in Canada's grocery or pharmacy sector include B.C. supermarket chain Overwaitea, Safeway Canada, Rexall pharmacy or Quebec's Uniprix pharmacy.
Montreal-based Metro (TSX:MRU) sold 48.2 per cent of its investment in Couche-Tard (TSX:ATD.B) to three Canadian banks for $479 million.
In the meantime, the grocer said it intends to buy up to two million of its common shares from arm's-length, third-party sellers at a discount to the market price.
The company has the OK from the Toronto Stock Exchange to purchase up to six million shares for cancellation this year, but has only bought four million in each of the past two years. Overall, it has bought back 21 million shares over the last five years at a cost of more than $830 million.
The Couche-Tard money will likely fund the additional share purchases this year, although no decision has been made, La Fleche said.
"That could be one way (to reward shareholders). There could also be investments to accelerate growth, improve efficiencies, increase productivity."
A special dividend is also a possibility, he said.
La Fleche said the company has the financial flexibility to make acquisitions.
"We could look at pretty much any acquisition in Canada, that's for sure. We have the capacity to look at them — that doesn't mean we'll do it but we have the capacity."
With its joint venture partner, the founders of the Adonis chain, Metro will add two new Adonis stores this year.
It is also expanding in the Ontario market with a new store opening in April in Mississauga and at a location in downtown Montreal near the Canadiens' old home at the Forum. A second Ontario store is possible towards year-end.
In addition to a difficult operating environment with low increases in food prices, Metro is feeling the effects of Wal-Mart's expansion through the acquisition of old Zeller's stores.
But La Fleche said Metro could actually benefit from the spring arrival of Target because they both operate in some of the same malls.
"We're looking forward to having them as neighbours. Hopefully they will attract more people than the previous tenant did and with lease restrictions or exclusivities we have in our favour I don't think fresh food will be their main focus."
On Monday, Metro increased its quarterly dividend to 25 cents from 21.5 cents, payable March 15 to shareholders of record as of Feb. 19.
Metro shares were down 51 cents to $63.61 in afternoon trading on the Toronto Stock Exchange.
It reported an 11 per cent increase in net earnings from continuing operations for its fiscal first quarter to $115 million, or $1.16 per diluted share, up from $104 million or $1.01 per diluted share in the year earlier period.
That beat estimates by a penny per share, according to a poll of analysts by Thomson Reuters
Sales revenue was up 2.7 per cent to $2.7 billion in the quarter from the year earlier period. The grocer said same store sales were up 1.5 per cent year over year. Analysts had called for revenue of $2.76 billion for the quarter.
Meanwhile, La Fleche criticized efforts by shareholder rights group Medac to force Metro to alter its name by adding an accent over the letter e to conform with the French language.
Shareholders massively rejected the idea in two votes held Tuesday, with La Fleche saying no one is confused about Metro's deep roots in the province as a Quebec-run company.
Metro is Quebec's leading grocery chain with nearly 34 per cent market share. It has more than 65,000 employees in Quebec and Ontario.
The company's 65,000 employees work at a network of more than 600 food stores under several banners including Metro, Metro Plus, GP, Super C and Food Basics, as well as over 250 drugstores under the Brunet, Brunet Plus, Clini Plus, The Pharmacy and Drug Basics banners.