Metcash (ASX:MTS) delivered another strong cash flow performance in its fiscal year 2026 results while margin pressures continued on its Independent Hardware Group business, according to a Monday Jefferies note.

The company reported Monday fiscal year 2026 underlying earnings of AU$0.245 per share, down from AU$0.251 a year earlier. Analysts polled by FactSet expected earnings of AU$0.24 per share.

The company's performance was particularly strong for the Hardware and Tools division, especially given the challenging economic backdrop, the note added.

Jefferies noted that the food division had a softer start to the period, although trading trends improved in June.

Jefferies kept a buy rating on Metcash with a price target of AU$3.50.

The company's shares fell 2% on market close.