Metro inc. — Call Transcript 2025

Good morning, ladies and gentlemen, and welcome to the Metro Inc. 2025 third quarter results conference call. At this time, note that all participant lines are in the listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. Also note that this call is being recorded on Wednesday, August 13th, 2025. I would like to turn the conference over to Sharon Kadoche, Director of Investor Relations and Corporate Finance. Please go ahead. Merci, Sylvie. Good morning, everyone, and thank you for joining us today. Our comments will focus on the financial results of our third quarter, which ended on July 5th. With me today is Mr. Eric La Flèche, President and CEO, Nicolas Amyot, Executive VP and CFO, Marc Giroux, Chief Operating Officer, and Jean-Michel Coutu, President of the Pharmacy Division. During the call, we will present our third quarter results and comment on its highlights. We'll then be happy to take your questions. Before we begin, I would like to remind you that we will use in today's discussion different statements that could be construed as forward-looking information. In general, any statement which does not constitute a historical fact may be deemed a forward-looking statement. Words or expressions such as expect, intend, or confident that will, and other similar words or expressions are generally indicative of forward-looking statements. The forward-looking statements are based upon certain assumptions regarding the Canadian food and pharmaceutical industries, the general economy, our annual budget, and our 2025 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 materially. Risk factors that could cause actual results or events to differ materially from our expectations, as expressed in or implied by our forward-looking statements, are described under the Risk Management section in our 2024 annual report. We believe these forward-looking statements to be reasonable and pertinent at this time and represent our expectations. The company does not intend to update any forward-looking statement except as required by applicable law. I will now turn the call over to Nicolas. Okay, thank you, Sharon, and good morning, everyone. I will now go over our Q3 results. Total sales reached $6.9 billion, an increase of 3.3% versus the third quarter last year. Food same-store sales grew by 1.9% in the quarter, while pharmacy same-store sales grew by 5.5%, supported by a 6.2% growth in prescription sales and a 4% growth in front-end sales. Our gross margin stood at 19.8% of sales versus 19.6% in the same quarter last year. The year-over-year increase is partly attributable to productivity gains in our food distribution centers, as well as shrink improvement in food retail activities. Operating expenses were $702 million, representing 10.2% of sales, a similar level to our third quarter last year. We benefited from the fact that we cycled transition duplicate costs last year related to our Terrebonne automated distribution center, but these benefits were offset by inflationary pressures, operational expenses related to our Fresh phase II DC in Toronto, as well as an increase in fees related to the growth of our online partnership sales. EBITDA for the quarter totaled $656 million, up 5.7% year-over-year, while EBITDA as a percentage of sales stood at 9.5% this quarter, an increase of 20 basis points over Q3 2024. Total depreciation and amortization expense for the quarter was $185 million, up $11 million. The increase in depreciation and amortization expense is mainly driven by retail investments, as well as by the commissioning of investments in our supply chain, including the final phase of our fresh distribution center in Toronto last summer and some automation technology in the pharmacy division. Net financial costs for the third quarter were $45 million, compared to $47 million last year. The decrease is mainly attributable to a lower interest expense on net debt, partly offset by lower capitalized interest. Our effective tax rate of 24.1% is lower than the effective tax rate of 25.9% in the third quarter last year, largely driven by the Terrebonne tax holiday, consistent with what we have reported in our first two quarters this year. Adjusted net earnings were $332 million, compared to $305 million last year, an increase of 8.8%, while adjusted net earnings per share amounted to $1.52 versus $1.35 last year, and that's up 12.6% year-over-year. Our Capital Expenditures for the third quarter totaled $146 million, down $41 million versus last year. As expected, the lower CapEx level is mainly the result of the completion of our automated distribution centers. On the food retail side, after 40 weeks, we opened eight new stores, including three conversions, and carried out major expansions and renovations at 12 stores for a net increase of 194,000 sq ft, or 0.9% of our food retail network square footage. Under our normal course issuer bid program, as of August 1st, we have repurchased 5.7 million shares for a total consideration of $562 million, representing an average share price of $98.55. To conclude, we have delivered solid Q3 results, and I will now turn it over to Eric for more color on our performance. Thank you. Thank you, Nicolas, and good morning, everyone. We are pleased with our results in the third quarter as our teams continue to deliver on our customer promises, in particular good value with competitive everyday prices, effective promotional strategies, our full range of private label products, and our loyalty program. For the quarter, total sales grew by 3.3%, EBITDA by 5.7%, and adjusted EPS by 12.6%. Starting with food, same-store sales were up 1.9% and 4.4% over two years. Discount continues to drive same-store sales growth faster than Metro, with a gap between both remaining stable. Our internal food inflation, basket inflation, was in line with the reported food CPI of 3.1%. We continue to see inflationary pressures on certain commodity prices, namely in the meat category. The introduced tariffs and counter tariffs are also a contributing factor to food inflation as we continue to receive price increase requests from our vendor partners. Teams continue to negotiate to minimize the impact on consumers, and for now, the effect remains manageable. During the quarter, transaction count was slightly down but offset by an increase in the average basket. Promotional penetration remains at elevated levels, and private label sales continue to outperform national brands. The competitive environment intensified somewhat in the quarter, and we held our own in terms of market share and tonnage. The Buy Canada movement is also persisting, with sales of Canadian products outpacing total sales, albeit at a slower pace. Online sales grew by 14% for the quarter. Growth is being driven by the ramp-up of Click and Collect services and also the launch of home delivery at Super C and Food Basics, as well as third-party marketplaces. Also, we announced in mid-July the expansion of third-party delivery services to include DoorDash in Quebec and Ontario. This is in addition to Instacart and Uber, with whom we've been operating for a few years now. Turning to pharmacy, the business sustained its positive momentum and delivered another strong quarter with comp sales of 5.5% for a two-year stack of 11%. Prescription sales were up 6.2%, driven by continued organic growth, specialty medications, GLP-1s, and clinical services. Commercial sales were up 4%. The strong performance was driven by growth in OTC, HABA, and cosmetics. As Nicolas mentioned, we are on track with our plan to accelerate the development of our growing discount banners as we successfully opened five new stores in the quarter. In our fourth quarter, we plan on opening another six stores, including two conversions, bringing the total to 14 in fiscal 2025. A new Adonis store will open in London tomorrow, our fifth Adonis in Ontario. As we begin our fourth quarter, we continue to see similar market trends, and our teams continue to focus on delivering the best value possible to our customers in this uncertain economic environment. Finally, we are confident that our sustained investments in our retail networks and supply chain, combined with strong execution, will continue to fuel our growth and create long-term shareholder value. Thank you, and we'll now be happy to take your questions. Thank you. Ladies and gentlemen, if you do have any questions at this time, please press star followed by one on your touch-tone phone. You will then hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by two. If you're using a speakerphone, please lift the handset first before pressing any keys. Please go ahead and press star one now if you do have any questions. Your first question will be from Mark Carden at UBS. Please go ahead, Mark. Good morning, and thanks for taking our question. Strong performance, but a notable step down from last quarter. I was wondering if you could detail your comp performance within the quarter, how that trended, and then any early read on how 4Q is looking. Thanks. I think we had a strong quarter, and I don't agree that we've had a notable step down, certainly not in our sales top line and bottom line and EPS growth, and we're pleased with our performance. If you're referring to the slightly lower same-store sales growth on the food side, I think you have to look at it over two years. I think comp sales are a function of what you're comping. We've had steady and strong comps for many, many quarters. We had good comps this quarter. Yes, it was a bit softer than the previous quarter, but if you look at it on a two-year basis, we're pleased with our performance. Great, and just as a follow-up, I'm curious what your view is on the consumer. Has anything changed in their shopping habits over the last quarter? Any more trade down happening within categories? I wouldn't say there's more trading down. The search for value has been ongoing for a couple of years now or more. It's the same trends. I referred to it in my opening comments. People are searching for value. Promotional levels are high. Private label sales are high. We're seeing pretty much the same picture on the consumer side. Some meat prices have, you know, there's a strong inflation in the meat category, so we're seeing some adjustments. You called it maybe some trading down or higher promotional penetration in the meat category because our costs have gone up substantially on the meat side, and some retail prices are reflecting that. That's what I would say. Thank you. Thanks so much. Next question will be from Tamy Chen at BMO Capital Markets. Please go ahead, Tamy. Hi, good morning. Thanks for the question. Eric, could you elaborate a bit more on your comment that you saw the competitive environment intensify somewhat in the quarter? Is this both your region, provinces in the country? Is it coming from a certain few competitors or pretty broad? I assume you're talking about like not just promo penetration, but specifically like promotional intensity. Is this a fairly meaningful step up in that? I don't want to spook anybody. We are operating in a competitive environment. It's always competitive. We noticed a bit of an uptick in promotional activity, openings of new stores, conversions. There's been quite a bit of activity in the market out there in Q3. That intensifies competition. I think it's normal or it's expected, I should say. We operate in a competitive environment. I think prices are rational, but it did intensify a bit in Q3. That's what I'd like to say. Is that clear, Tamy? I don't know if that answers your question. We're not identifying anybody. It's just at large, we noticed an uptick in the competitive intensity, promotional pricing due to market conditions. It intensified somewhat, a little bit in Q3. I see what you mean. Are you able to talk a bit about your conventional banner? I noticed you said discount is still driving the comp, but how is your conventional banners doing in your two regions? I think in Quebec, you picked up some share. I'm curious how it's doing in Ontario because I think there are some competitors that have been fairly aggressive rolling out this new discount square footage, particularly in Ontario. Thank you. We're pleased with our conventional stores. Our Metro stores in both provinces are holding their own really well versus their conventional peers, as measured by Nielsen GDM Conventional. We're pleased with our performance in both markets. We're holding our own. Clearly, there's been more growth in discount than in conventional over the past few years. That is continuing, albeit at a slower pace, but it's still continuing. Overall, I'm not saying our conventional stores are gaining market share, but relative to the competitive set of conventional stores, we're holding our own and pleased with our performance. Okay, thank you. That's it for me. Thank you. Next question will be from Irene Nattel at RBC Capital Markets. Please go ahead, Irene. Thanks, and good morning, everyone. Just switching gears a little bit, you noted, Eric, in your commentary that you're starting to, that you're getting more price increase requests from vendors that are tariff-related. Can you just talk a little bit about that, what the magnitude of the price increases are, you know, efforts to offset and the like? Thank you. Yeah, so the number of price requests, it's similar. We're still in the normal environment, but those related to tariffs, they represent about 20% of the increases demands that we're receiving from vendors. There's about 3,000 SKUs right now that are affected by tariffs that we've received increases and accepted increases related to tariffs. We negotiate hard, and it has to be with a code number, and it has to be proven and all of that. We're talking about, you know, high single digits or percentage are the asks. We don't necessarily finish there, but we negotiate as best we can to minimize the impact on our consumers in this environment where everybody's searching for value and everybody's more price sensitive. We're working hard with our vendors to minimize that impact. The counter tariff started in March. Some suppliers waited to impose cost increases on us, but some of those have now started to flow in. On the HABA side, one large U.S. CPG company, you know, we've started to see some price increases that we've had to take in this month in August. We're seeing some of that. Like I said in my opening statement, it's manageable. We're still in line with CPI. CPI is around 3%. We'd like it to be 2%, but we're at 3% these days. Thanks, Eric. In those categories where you are seeing the price increases, are you seeing an acceleration in, let's say, you know, trade down to private label to the extent that it exists in those categories and increased penetration, or are you seeing consumers just kind of say, yeah, we're just going to switch out of these products if possible? I don't have a specific example for you, but I think those increases contribute to the rise or the growth in sales for private label. It's a contributing factor, not the only one, but it certainly helps. The price increases related to tariffs that I just referred to on the HABA side are very recent, so I can't really point to a change in consumer behavior there. On the food side, what we've seen since March, those products that have been affected, like we said before, we search for other suppliers in other countries just to minimize prices and maintain quality. The consumer, you know, we've been able to navigate and to provide value to our customers despite these tariffs. That's why I say it's been manageable. Hopefully, it'll stay that way. That's great. Thanks, Eric. Thanks. Next question will be from Michael Van Aelst at TD Cowen. Please go ahead, Michael. Yes, thank you. Just to start off, can I clarify on the same-store sales growth, when you're talking about two-year stack, are you looking at it that way because you benefited in May of last year when there was a boycott on a competitor and therefore, you know, had a bigger boost last year and you're cycling that now? If so, did you see your same-store sales growth reaccelerate in June after you cycled the May boycott? This quote-unquote boycott may have helped us a little bit last year, so we had to comp that. That's one of the reasons I referred to the two-year number to give you a better picture. We're not going to give you details on our sales. We don't give guidance on our sales in June, July, or August, or whatever. The quarter ended early July, so it's all pretty much behind us now. All right. On the distribution centers that have opened, can you provide some color as to how they performed during Q3 in terms of pick efficiencies and services stores, and how that is different heading into Q4? Our food DCs in Terrebonne and Toronto Fresh phase II were very pleased with our performance. If I look at cost per case productivity numbers, we're very pleased with the performance. It did contribute to our gross margin improvement of 20 basis points, those productivity gains. We're pleased with the performance. We're on track, pretty much on track with our head of our plan related to our DC performance. That performance of Q3 is continuing into Q4. I'm not really concerned by that. It's hard work, but ramping up well. I don't know if that answers your question. Your outlook statement changed a bit. You had talked about productivity initiatives or efficiencies, and then you talked about service to the stores. It seems like you took out the part of this quarter where you're saying you're looking to improve service to the stores. I was wondering. We took it out because the transition is over and our service to our stores is very good. We're not concerned by that. It's done. We're focused on productivity, efficiency gains. The service to the stores is satisfactory and we're pleased with that performance. We're always focused on service to our stores, but it's not a specific focus going forward. Okay. I know there's no kind of finish line, but when do you, how much longer do you expect it to be before you get a run rate of efficiencies in the DCs that is in line with the business plan or at least in line with what you now expect? I think we're there now. We're in line with our business plans. The freezer, both freezers in Quebec and Ontario, were ahead of plan and very pleased with the performance, the productivity. The automated fresh in Toronto is a bit more of a challenge. The supply chain has to adjust. The packaging from our vendors has to adjust to be automatable. We'd like a higher percentage of cases to go through the automation system. We're close to where we want to be, but we're not there yet. There's room to improve on the fresh side. It may take a little more time, as I said, the supply chain adjusts. The rest, fresh meat, frozen meat, in both provinces, deli, dairy, we're very pleased with our performance. Great. Thank you very much. Thank you. Next question will be from Yiyang Liu at Scotiabank. Please go ahead, Yiyang. Thank you, and good morning. I wanted to ask about GLP-1s, in particular Ozempic and Wegovy. Can you talk about the state of your product business and how you expect the expiry of those weight loss drugs' patents is expected to impact your generic business and how these transitions have played out historically? Should I let Jean-Michel take this one? Can you hear me? Can you hear him well? Yes. Yeah. Right now, maybe I should clarify one thing. The only patent that's being challenged is for Ozempic. Wegovy, which is the one that actually has the indication for weight loss, is not going to be challenged in terms of its patent since it's fairly new in Canada. It's too early to tell how it's going to happen with Health Canada in terms of approval. We know that there are some companies that have submitted to have those patents broken. Obviously, if that's the case, we're going to work with our vendor community and our partners to try to get a product equivalent, as we always do with every generic molecule that has sufficient volume. Usually, the way it works is when a molecule becomes generic, the networks convert as quickly as the pharmacists convert as quickly as they can because it is margin accretive for them within their stores. When we talk about margin here, it's really professional allowances, which they have to reinvest in their stores according to the law in Quebec. It is margin, but it's margin that needs to be guided towards certain expenses within their stores. I hope that answers a little bit of your question. Yeah, that's helpful. Thank you. To complement on that, for the company here as a distributor, if those drugs become generics, we will make a generic fee, a distribution fee on the generic lower price. There could be a dilutive impact here for that, but volume usually picks up the slack. Thank you. I guess just another, I wanted to double click on the performance between your two provinces. I'm wondering in particular about the exposure to certain Ontario markets that are perhaps more impacted by the tariff environment. Have you noticed any consumer behavior changes there? Not that we can point out more specifically that what we're describing as the consumer environment, competitive environment concerns both of our markets. Thank you. Thank you. Next question will be from Mark Petrie at CIBC. Please go ahead, Mark. Yeah, thanks. Good morning. I wanted to just ask about the SG&A rate. Maybe if you can give some more specifics about sort of the puts and takes there. Eric, you've commented about Fresh phase II, but hoping you could give some sense of when you would expect that facility to turn to a tailwind when it comes to SG&A. Thank you. Okay, so good morning, Mark. Maybe I start with SG&A. As I've mentioned, SG&A was at 10.2% of sales this quarter, similar to last quarter. I mentioned that we cycled out transition costs, so obviously that was a tailwind for us. However, there's overall inflation in pretty much all the categories of expenses that flow into SG&A. We're happy with the cost control performance we've had, but we have seen SG&A inflation pressures there for sure. Also, the commissioning of our distribution center, Fresh phase II in Toronto last summer, is now driving recurring expenses that are now in SG&A and that we are going to be incorporated going forward. Finally, I would say, as I mentioned, that the ongoing growth of the e-commerce business is driving fees to our partners in SG&A. I guess nothing abnormal, but consistent with the growth in e-commerce sales. Overall, I would say happy with the performance on SG&A. More specific to Fresh phase II, like I said, we're on plan, we're on track with the ramp-up that we expected. I said automation, we could automate, if we could automate even, if we can put through more products through the automation machine, it would be even better. That takes time because it's a supply chain, it's a vendor adjustment. It's generally a tailwind. We're pleased with the performance, we're reaching our objectives, and there's going to be room for more as the industry adjusts. I don't know how I give you a clearer answer. Okay, fair enough. With specific to the online growth, is it fair to say that a lot of that growth is being driven by sort of short timeframe delivery, third-party orders? I guess, what's your latest thinking about your infrastructure and processes? I know that's been a source of constant review, but any view to any alterations in that over the next 12-18 months? Good morning, Mark. It's Marc here. As you know, we've gone to market with a multi-service model, meaning that we leverage third party, we leverage Click and Collect in our own infrastructure, and we do our own delivery. To your first question, the growth on our own delivery has been at the same level as third parties. Consumers, there's a mix of need in the market. Consumers are looking for quick delivery, but also planned delivery and Click and Collect. All of these services have been growing at a steady rate. As we look at the future of our platform, we will continue to go to market with multiple types of investment or platform through third-party marketplaces, Click and Collect, and our own delivery. As you noticed in our comments, we just signed a new partnership with DoorDash, giving us a new channel to market through the DoorDash marketplace. We're continuing in the same line as our strategy of the last few years. Okay, thanks for that. One last one. As you look within Q3 and then in Q4 to date, and you think about the buy Canadian trend, would you say that that trend is stable, accelerating, or decelerating? It's decelerating somewhat. Consumers are still buying more Canadians, so we're seeing more growth on Canadian product and non-Canadian product, but it has decelerated slightly. Okay, thanks for that. All the best. Thanks. Once again, ladies and gentlemen, if you do have any questions, please press star followed by one on your telephone keypad. Your next question will be from Vishal Sridhar at National Bank. Please go ahead, Vishal. Hi, this is Anshul in for Vishal Sridhar. I wanted to follow up on your duplicate costs related to the new DCs. From your last conference call, it was fair to say that you lapped peak duplicate costs in Q2 and Q3 last year. Is it fair to expect SG&A leverage going forward, notwithstanding heightened third-party partnership fees? As you've mentioned, we lapped duplicate costs in the third quarter, this quarter, Q2 last year. Going forward, we would not have that lapse. I think SG&A, we're always looking to create leverage and grew SG&A at a lower pace than revenue growth. I would expect modest leverage in the coming quarters for SG&A. Understood. Thank you. Thank you. At this time, it appears we have no other questions registered, so I will turn the call back over to Sharon Kadoche. Thank you all for your interest in Metro., and please mark your calendars for our Q4 results on November 19th. Thank you. Thank you. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending, and at this time, we ask that you please disconnect your lines. Have a good day.

Speaker 10: Good morning, ladies and gentlemen, and welcome to the Metro Inc. 2025 third quarter results conference call. At this time, note that all participant lines are in the listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. Also note that this call is being recorded on Wednesday, August 13th, 2025. I would like to turn the conference over to Sharon Kadoche, Director of Investor Relations and Corporate Finance. Please go ahead. Good morning, ladies and gentlemen, and welcome to the Metro Inc. 2025 third quarter results conference call. good morning ladies and gentlemen and welcome to the metro inc 2025 third quarter results conference call At this time, note that all participant lines are in the listen-only mode. at this time note that all participant lines are in the listen-only mode Following the presentation, we will conduct a question- and- answer session. following the presentation we will conduct a question- and- answer session If at any time during this call you require immediate assistance, please press star zero for the operator. if at any time during this call you require immediate assistance please press star zero for the operator Also note that this call is being recorded on Wednesday, August 13th, 2025. also note that this call is being recorded on wednesday august 13th 2025 I would like to turn the conference over to Sharon Kadoche, Director of Investor Relations and Corporate Finance. i would like to turn the conference over to sharon kadoche director of investor relations and corporate finance Please go ahead. please go ahead

Speaker 6: Merci, Sylvie. Good morning, everyone, and thank you for joining us today. Our comments will focus on the financial results of our third quarter, which ended on July 5th. With me today is Mr. Eric La Flèche, President and CEO, Nicolas Amyot, Executive VP and CFO, Marc Giroux, Chief Operating Officer, and Jean-Michel Coutu, President of the Pharmacy Division. During the call, we will present our third quarter results and comment on its highlights. We'll then be happy to take your questions. Before we begin, I would like to remind you that we will use in today's discussion different statements that could be construed as forward-looking information. In general, any statement which does not constitute a historical fact may be deemed a forward-looking statement. Words or expressions such as expect, intend, or confident that will, and other similar words or expressions are generally indicative of forward-looking statements. Merci, Sylvie. merci sylvie Good morning, everyone, and thank you for joining us today. good morning everyone and thank you for joining us today Our comments will focus on the financial results of our third quarter, which ended on July 5th. our comments will focus on the financial results of our third quarter which ended on july 5th With me today is Mr. Eric La Flèche, President and CEO, Nicolas Amyot, Executive VP and CFO, Marc Giroux, Chief Operating Officer, and Jean-Michel Coutu, President of the Pharmacy Division. with me today is mr eric la flèche president and ceo nicolas amyot executive vp and cfo marc giroux chief operating officer and jean-michel coutu president of the pharmacy division During the call, we will present our third quarter results and comment on its highlights. during the call we will present our third quarter results and comment on its highlights We'll then be happy to take your questions. we'll then be happy to take your questions Before we begin, I would like to remind you that we will use in today's discussion different statements that could be construed as forward-looking information. before we begin i would like to remind you that we will use in today's discussion different statements that could be construed as forward-looking information In general, any statement which does not constitute a historical fact may be deemed a forward-looking statement. in general any statement which does not constitute a historical fact may be deemed a forward-looking statement Words or expressions such as expect, intend, or confident that will, and other similar words or expressions are generally indicative of forward-looking statements. words or expressions such as expect intend or confident that will and other similar words or expressions are generally indicative of forward-looking statements The forward-looking statements are based upon certain assumptions regarding the Canadian food and pharmaceutical industries, the general economy, our annual budget, and our 2025 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 materially. Risk factors that could cause actual results or events to differ materially from our expectations, as expressed in or implied by our forward-looking statements, are described under the Risk Management section in our 2024 annual report. We believe these forward-looking statements to be reasonable and pertinent at this time and represent our expectations. The company does not intend to update any forward-looking statement except as required by applicable law. I will now turn the call over to Nicolas. The forward-looking statements are based upon certain assumptions regarding the Canadian food and pharmaceutical industries, the general economy, our annual budget, and our 2025 action plan. the forward-looking statements are based upon certain assumptions regarding the canadian food and pharmaceutical industries the general economy our annual budget and our 2025 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 materially. 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 materially Risk factors that could cause actual results or events to differ materially from our expectations, as expressed in or implied by our forward-looking statements, are described under the Risk Management section in our 2024 annual report. risk factors that could cause actual results or events to differ materially from our expectations as expressed in or implied by our forward-looking statements are described under the risk management section in our 2024 annual report We believe these forward-looking statements to be reasonable and pertinent at this time and represent our expectations. we believe these forward-looking statements to be reasonable and pertinent at this time and represent our expectations The company does not intend to update any forward-looking statement except as required by applicable law. the company does not intend to update any forward-looking statement except as required by applicable law I will now turn the call over to Nicolas. i will now turn the call over to nicolas

Speaker 9: Okay, thank you, Sharon, and good morning, everyone. I will now go over our Q3 results. Total sales reached $6.9 billion, an increase of 3.3% versus the third quarter last year. Food same-store sales grew by 1.9% in the quarter, while pharmacy same-store sales grew by 5.5%, supported by a 6.2% growth in prescription sales and a 4% growth in front-end sales. Our gross margin stood at 19.8% of sales versus 19.6% in the same quarter last year. The year-over-year increase is partly attributable to productivity gains in our food distribution centers, as well as shrink improvement in food retail activities. Operating expenses were $702 million, representing 10.2% of sales, a similar level to our third quarter last year. Okay, thank you, Sharon, and good morning, everyone. okay thank you sharon and good morning everyone I will now go over our Q3 results. i will now go over our q3 results Total sales reached $6.9 billion, an increase of 3.3% versus the third quarter last year. total sales reached $6.9 billion an increase of 3.3% versus the third quarter last year Food same-store sales grew by 1.9% in the quarter, while pharmacy same-store sales grew by 5.5%, supported by a 6.2% growth in prescription sales and a 4% growth in front-end sales. food same-store sales grew by 1.9% in the quarter while pharmacy same-store sales grew by 5.5% supported by a 6.2% growth in prescription sales and a 4% growth in front-end sales Our gross margin stood at 19.8% of sales versus 19.6% in the same quarter last year. our gross margin stood at 19.8% of sales versus 19.6% in the same quarter last year The year-over-year increase is partly attributable to productivity gains in our food distribution centers, as well as shrink improvement in food retail activities. the year-over-year increase is partly attributable to productivity gains in our food distribution centers as well as shrink improvement in food retail activities Operating expenses were $702 million, representing 10.2% of sales, a similar level to our third quarter last year. operating expenses were $702 million representing 10.2% of sales a similar level to our third quarter last year We benefited from the fact that we cycled transition duplicate costs last year related to our Terrebonne automated distribution center, but these benefits were offset by inflationary pressures, operational expenses related to our Fresh phase II DC in Toronto, as well as an increase in fees related to the growth of our online partnership sales. EBITDA for the quarter totaled $656 million, up 5.7% year-over-year, while EBITDA as a percentage of sales stood at 9.5% this quarter, an increase of 20 basis points over Q3 2024. Total depreciation and amortization expense for the quarter was $185 million, up $11 million. The increase in depreciation and amortization expense is mainly driven by retail investments, as well as by the commissioning of investments in our supply chain, including the final phase of our fresh distribution center in Toronto last summer and some automation technology in the pharmacy division. We benefited from the fact that we cycled transition duplicate costs last year related to our Terrebonne automated distribution center, but these benefits were offset by inflationary pressures, operational expenses related to our Fresh phase II DC in Toronto, as well as an increase in fees related to the growth of our online partnership sales. we benefited from the fact that we cycled transition duplicate costs last year related to our terrebonne automated distribution center but these benefits were offset by inflationary pressures operational expenses related to our fresh phase ii dc in toronto as well as an increase in fees related to the growth of our online partnership sales EBITDA for the quarter totaled $656 million, up 5.7% year- over- year, while EBITDA as a percentage of sales stood at 9.5% this quarter, an increase of 20 basis points over Q3 2024. ebitda for the quarter totaled $656 million up 5.7% year- over- year while ebitda as a percentage of sales stood at 9.5% this quarter an increase of 20 basis points over q3 2024 Total depreciation and amortization expense for the quarter was $185 million, up $11 million. total depreciation and amortization expense for the quarter was $185 million up $11 million The increase in depreciation and amortization expense is mainly driven by retail investments, as well as by the commissioning of investments in our supply chain, including the final phase of our fresh distribution center in Toronto last summer and some automation technology in the pharmacy division. the increase in depreciation and amortization expense is mainly driven by retail investments as well as by the commissioning of investments in our supply chain including the final phase of our fresh distribution center in toronto last summer and some automation technology in the pharmacy division Net financial costs for the third quarter were $45 million, compared to $47 million last year. The decrease is mainly attributable to a lower interest expense on net debt, partly offset by lower capitalized interest. Our effective tax rate of 24.1% is lower than the effective tax rate of 25.9% in the third quarter last year, largely driven by the Terrebonne tax holiday, consistent with what we have reported in our first two quarters this year. Adjusted net earnings were $332 million, compared to $305 million last year, an increase of 8.8%, while adjusted net earnings per share amounted to $1.52 versus $1.35 last year, and that's up 12.6% year-over-year. Our Capital Expenditures for the third quarter totaled $146 million, down $41 million versus last year. As expected, the lower CapEx level is mainly the result of the completion of our automated distribution centers. Net financial costs for the third quarter were $45 million, compared to $47 million last year. net financial costs for the third quarter were $45 million compared to $47 million last year The decrease is mainly attributable to a lower interest expense on net debt, partly offset by lower capitalized interest. the decrease is mainly attributable to a lower interest expense on net debt partly offset by lower capitalized interest Our effective tax rate of 24.1% is lower than the effective tax rate of 25.9% in the third quarter last year, largely driven by the Terrebonne tax holiday, consistent with what we have reported in our first two quarters this year. our effective tax rate of 24.1% is lower than the effective tax rate of 25.9% in the third quarter last year largely driven by the terrebonne tax holiday consistent with what we have reported in our first two quarters this year Adjusted net earnings were $332 million, compared to $305 million last year, an increase of 8.8%, while adjusted net earnings per share amounted to $1.52 versus $1.35 last year, and that's up 12.6% year- over- year. adjusted net earnings were $332 million compared to $305 million last year an increase of 8.8% while adjusted net earnings per share amounted to $1.52 versus $1.35 last year and that's up 12.6% year- over- year Our Capital Expenditures for the third quarter totaled $146 million, down $41 million versus last year. our capital expenditures for the third quarter totaled $146 million down $41 million versus last year As expected, the lower CapEx level is mainly the result of the completion of our automated distribution centers. as expected the lower capex level is mainly the result of the completion of our automated distribution centers On the food retail side, after 40 weeks, we opened eight new stores, including three conversions, and carried out major expansions and renovations at 12 stores for a net increase of 194,000 sq ft, or 0.9% of our food retail network square footage. Under our normal course issuer bid program, as of August 1st, we have repurchased 5.7 million shares for a total consideration of $562 million, representing an average share price of $98.55. To conclude, we have delivered solid Q3 results, and I will now turn it over to Eric for more color on our performance. Thank you. On the food retail side, after 40 weeks, we opened eight new stores, including three conversions, and carried out major expansions and renovations at 12 stores for a net increase of 194,000 sq ft , or 0.9% of our food retail network square footage. on the food retail side after 40 weeks we opened eight new stores including three conversions and carried out major expansions and renovations at 12 stores for a net increase of 194,000 sq ft or 0.9% of our food retail network square footage Under our normal course issuer bid program, as of August 1st, we have repurchased 5.7 million shares for a total consideration of $562 million, representing an average share price of $98.55. under our normal course issuer bid program as of august 1st we have repurchased 5.7 million shares for a total consideration of $562 million representing an average share price of $98.55 To conclude, we have delivered solid Q3 results, and I will now turn it over to Eric for more color on our performance. to conclude we have delivered solid q3 results and i will now turn it over to eric for more color on our performance Thank you. thank you

Speaker 13: Thank you, Nicolas, and good morning, everyone. We are pleased with our results in the third quarter as our teams continue to deliver on our customer promises, in particular good value with competitive everyday prices, effective promotional strategies, our full range of private label products, and our loyalty program. For the quarter, total sales grew by 3.3%, EBITDA by 5.7%, and adjusted EPS by 12.6%. Starting with food, same-store sales were up 1.9% and 4.4% over two years. Discount continues to drive same-store sales growth faster than Metro, with a gap between both remaining stable. Our internal food inflation, basket inflation, was in line with the reported food CPI of 3.1%. We continue to see inflationary pressures on certain commodity prices, namely in the meat category. Thank you, Nicolas, and good morning, everyone. thank you nicolas and good morning everyone We are pleased with our results in the third quarter as our teams continue to deliver on our customer promises, in particular good value with competitive everyday prices, effective promotional strategies, our full range of private label products, and our loyalty program. we are pleased with our results in the third quarter as our teams continue to deliver on our customer promises in particular good value with competitive everyday prices effective promotional strategies our full range of private label products and our loyalty program For the quarter, total sales grew by 3.3%, EBITDA by 5.7%, and adjusted EPS by 12.6%. for the quarter total sales grew by 3.3% ebitda by 5.7% and adjusted eps by 12.6% Starting with food, same-store sales were up 1.9% and 4.4% over two years. starting with food same-store sales were up 1.9% and 4.4% over two years Discount continues to drive same-store sales growth faster than Metro, with a gap between both remaining stable. discount continues to drive same-store sales growth faster than metro with a gap between both remaining stable Our internal food inflation, basket inflation, was in line with the reported food CPI of 3.1%. our internal food inflation basket inflation was in line with the reported food cpi of 3.1% We continue to see inflationary pressures on certain commodity prices, namely in the meat category. we continue to see inflationary pressures on certain commodity prices namely in the meat category The introduced tariffs and counter tariffs are also a contributing factor to food inflation as we continue to receive price increase requests from our vendor partners. Teams continue to negotiate to minimize the impact on consumers, and for now, the effect remains manageable. During the quarter, transaction count was slightly down but offset by an increase in the average basket. Promotional penetration remains at elevated levels, and private label sales continue to outperform national brands. The competitive environment intensified somewhat in the quarter, and we held our own in terms of market share and tonnage. The Buy Canada movement is also persisting, with sales of Canadian products outpacing total sales, albeit at a slower pace. Online sales grew by 14% for the quarter. The introduced tariffs and counter tariffs are also a contributing factor to food inflation as we continue to receive price increase requests from our vendor partners. the introduced tariffs and counter tariffs are also a contributing factor to food inflation as we continue to receive price increase requests from our vendor partners Teams continue to negotiate to minimize the impact on consumers, and for now, the effect remains manageable. teams continue to negotiate to minimize the impact on consumers and for now the effect remains manageable During the quarter, transaction count was slightly down but offset by an increase in the average basket. during the quarter transaction count was slightly down but offset by an increase in the average basket Promotional penetration remains at elevated levels, and private label sales continue to outperform national brands. promotional penetration remains at elevated levels and private label sales continue to outperform national brands The competitive environment intensified somewhat in the quarter, and we held our own in terms of market share and tonnage. the competitive environment intensified somewhat in the quarter and we held our own in terms of market share and tonnage The Buy Canada movement is also persisting, with sales of Canadian products outpacing total sales, albeit at a slower pace. the buy canada movement is also persisting with sales of canadian products outpacing total sales albeit at a slower pace Online sales grew by 14% for the quarter. online sales grew by 14% for the quarter Growth is being driven by the ramp-up of Click and Collect services and also the launch of home delivery at Super C and Food Basics, as well as third-party marketplaces. Also, we announced in mid-July the expansion of third-party delivery services to include DoorDash in Quebec and Ontario. This is in addition to Instacart and Uber, with whom we've been operating for a few years now. Turning to pharmacy, the business sustained its positive momentum and delivered another strong quarter with comp sales of 5.5% for a two-year stack of 11%. Prescription sales were up 6.2%, driven by continued organic growth, specialty medications, GLP-1s, and clinical services. Commercial sales were up 4%. The strong performance was driven by growth in OTC, HABA, and cosmetics. Growth is being driven by the ramp-up of Click and Collect services and also the launch of home delivery at Super C and Food Basics, as well as third-party marketplaces. growth is being driven by the ramp-up of click and collect services and also the launch of home delivery at super c and food basics as well as third-party marketplaces Also, we announced in mid-July the expansion of third-party delivery services to include DoorDash in Quebec and Ontario. also we announced in mid-july the expansion of third-party delivery services to include doordash in quebec and ontario This is in addition to Instacart and Uber, with whom we've been operating for a few years now. this is in addition to instacart and uber with whom we've been operating for a few years now Turning to pharmacy, the business sustained its positive momentum and delivered another strong quarter with comp sales of 5.5% for a two-year stack of 11%. turning to pharmacy the business sustained its positive momentum and delivered another strong quarter with comp sales of 5.5% for a two-year stack of 11% Prescription sales were up 6.2%, driven by continued organic growth, specialty medications, GLP-1s, and clinical services. prescription sales were up 6.2% driven by continued organic growth specialty medications glp-1s and clinical services Commercial sales were up 4%. commercial sales were up 4% The strong performance was driven by growth in OTC, HABA, and cosmetics. the strong performance was driven by growth in otc haba and cosmetics As Nicolas mentioned, we are on track with our plan to accelerate the development of our growing discount banners as we successfully opened five new stores in the quarter. In our fourth quarter, we plan on opening another six stores, including two conversions, bringing the total to 14 in fiscal 2025. A new Adonis store will open in London tomorrow, our fifth Adonis in Ontario. As we begin our fourth quarter, we continue to see similar market trends, and our teams continue to focus on delivering the best value possible to our customers in this uncertain economic environment. Finally, we are confident that our sustained investments in our retail networks and supply chain, combined with strong execution, will continue to fuel our growth and create long-term shareholder value. Thank you, and we'll now be happy to take your questions. As Nicolas mentioned, we are on track with our plan to accelerate the development of our growing discount banners as we successfully opened five new stores in the quarter. as nicolas mentioned we are on track with our plan to accelerate the development of our growing discount banners as we successfully opened five new stores in the quarter In our fourth quarter, we plan on opening another six stores, including two conversions, bringing the total to 14 in fiscal 2025. in our fourth quarter we plan on opening another six stores including two conversions bringing the total to 14 in fiscal 2025 A new Adonis store will open in London tomorrow, our fifth Adonis in Ontario. a new adonis store will open in london tomorrow our fifth adonis in ontario As we begin our fourth quarter, we continue to see similar market trends, and our teams continue to focus on delivering the best value possible to our customers in this uncertain economic environment. as we begin our fourth quarter we continue to see similar market trends and our teams continue to focus on delivering the best value possible to our customers in this uncertain economic environment Finally, we are confident that our sustained investments in our retail networks and supply chain, combined with strong execution, will continue to fuel our growth and create long-term shareholder value. finally we are confident that our sustained investments in our retail networks and supply chain combined with strong execution will continue to fuel our growth and create long-term shareholder value Thank you, and we'll now be happy to take your questions. thank you and we'll now be happy to take your questions

Speaker 10: Thank you. Ladies and gentlemen, if you do have any questions at this time, please press star followed by one on your touch-tone phone. You will then hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by two. If you're using a speakerphone, please lift the handset first before pressing any keys. Please go ahead and press star one now if you do have any questions. Your first question will be from Mark Carden at UBS. Please go ahead, Mark. Thank you. thank you Ladies and gentlemen, if you do have any questions at this time, please press star followed by one on your touch-tone phone. ladies and gentlemen if you do have any questions at this time please press star followed by one on your touch-tone phone You will then hear a prompt that your hand has been raised. you will then hear a prompt that your hand has been raised Should you wish to decline from the polling process, please press star followed by two. should you wish to decline from the polling process please press star followed by two If you're using a speakerphone, please lift the handset first before pressing any keys. if you're using a speakerphone please lift the handset first before pressing any keys Please go ahead and press star one now if you do have any questions. please go ahead and press star one now if you do have any questions Your first question will be from Mark Carden at UBS . your first question will be from mark carden at ubs Please go ahead, Mark. please go ahead mark

Speaker 1: Good morning, and thanks for taking our question. Strong performance, but a notable step down from last quarter. I was wondering if you could detail your comp performance within the quarter, how that trended, and then any early read on how 4Q is looking. Thanks. Good morning, and thanks for taking our question. good morning and thanks for taking our question Strong performance, but a notable step down from last quarter. strong performance but a notable step down from last quarter I was wondering if you could detail your comp performance within the quarter, how that trended, and then any early read on how 4Q is looking. i was wondering if you could detail your comp performance within the quarter how that trended and then any early read on how 4q is looking Thanks. thanks

Speaker 13: I think we had a strong quarter, and I don't agree that we've had a notable step down, certainly not in our sales top line and bottom line and EPS growth, and we're pleased with our performance. If you're referring to the slightly lower same-store sales growth on the food side, I think you have to look at it over two years. I think comp sales are a function of what you're comping. We've had steady and strong comps for many, many quarters. We had good comps this quarter. Yes, it was a bit softer than the previous quarter, but if you look at it on a two-year basis, we're pleased with our performance. I think we had a strong quarter, and I don't agree that we've had a notable step down, certainly not in our sales top line and bottom line and EPS growth, and we're pleased with our performance. i think we had a strong quarter and i don't agree that we've had a notable step down certainly not in our sales top line and bottom line and eps growth and we're pleased with our performance If you're referring to the slightly lower same-store sales growth on the food side, I think you have to look at it over two years. if you're referring to the slightly lower same-store sales growth on the food side i think you have to look at it over two years I think comp sales are a function of what you're comping. i think comp sales are a function of what you're comping We've had steady and strong comps for many, many quarters. we've had steady and strong comps for many many quarters We had good comps this quarter. we had good comps this quarter Yes, it was a bit softer than the previous quarter, but if you look at it on a two-year basis, we're pleased with our performance. yes it was a bit softer than the previous quarter but if you look at it on a two-year basis we're pleased with our performance

Speaker 1: Great, and just as a follow-up, I'm curious what your view is on the consumer. Has anything changed in their shopping habits over the last quarter? Any more trade down happening within categories? Great, and just as a follow-up, I'm curious what your view is on the consumer. great and just as a follow-up i'm curious what your view is on the consumer Has anything changed in their shopping habits over the last quarter? has anything changed in their shopping habits over the last quarter Any more trade down happening within categories? any more trade down happening within categories

Speaker 13: I wouldn't say there's more trading down. The search for value has been ongoing for a couple of years now or more. It's the same trends. I referred to it in my opening comments. People are searching for value. Promotional levels are high. Private label sales are high. We're seeing pretty much the same picture on the consumer side. Some meat prices have, you know, there's a strong inflation in the meat category, so we're seeing some adjustments. You called it maybe some trading down or higher promotional penetration in the meat category because our costs have gone up substantially on the meat side, and some retail prices are reflecting that. That's what I would say. I wouldn't say there's more trading down. i wouldn't say there's more trading down The search for value has been ongoing for a couple of years now or more. the search for value has been ongoing for a couple of years now or more It's the same trends. it's the same trends I referred to it in my opening comments. i referred to it in my opening comments People are searching for value. people are searching for value Promotional levels are high. promotional levels are high Private label sales are high. private label sales are high We're seeing pretty much the same picture on the consumer side. we're seeing pretty much the same picture on the consumer side Some meat prices have, you know, there's a strong inflation in the meat category, so we're seeing some adjustments. some meat prices have you know there's a strong inflation in the meat category so we're seeing some adjustments You called it maybe some trading down or higher promotional penetration in the meat category because our costs have gone up substantially on the meat side, and some retail prices are reflecting that. you called it maybe some trading down or higher promotional penetration in the meat category because our costs have gone up substantially on the meat side and some retail prices are reflecting that That's what I would say. that's what i would say

Speaker 1: Thank you. Thanks so much. Thank you. thank you Thanks so much. you thanks so much

Speaker 10: Next question will be from Tamy Chen at BMO Capital Markets. Please go ahead, Tamy. Next question will be from Tamy Chen at BMO Capital Markets. next question will be from tamy chen at bmo capital markets Please go ahead, Tamy. please go ahead tamy

Speaker 2: Hi, good morning. Thanks for the question. Eric, could you elaborate a bit more on your comment that you saw the competitive environment intensify somewhat in the quarter? Is this both your region, provinces in the country? Is it coming from a certain few competitors or pretty broad? I assume you're talking about like not just promo penetration, but specifically like promotional intensity. Is this a fairly meaningful step up in that? Hi, good morning. hi good morning Thanks for the question. thanks for the question Eric, could you elaborate a bit more on your comment that you saw the competitive environment intensify somewhat in the quarter? eric could you elaborate a bit more on your comment that you saw the competitive environment intensify somewhat in the quarter Is this both your region, provinces in the country? is this both your region provinces in the country Is it coming from a certain few competitors or pretty broad? is it coming from a certain few competitors or pretty broad I assume you're talking about like not just promo penetration, but specifically like promotional intensity. i assume you're talking about like not just promo penetration but specifically like promotional intensity Is this a fairly meaningful step up in that? is this a fairly meaningful step up in that

Speaker 13: I don't want to spook anybody. We are operating in a competitive environment. It's always competitive. We noticed a bit of an uptick in promotional activity, openings of new stores, conversions. There's been quite a bit of activity in the market out there in Q3. That intensifies competition. I think it's normal or it's expected, I should say. We operate in a competitive environment. I think prices are rational, but it did intensify a bit in Q3. That's what I'd like to say. Is that clear, Tamy? I don't know if that answers your question. We're not identifying anybody. It's just at large, we noticed an uptick in the competitive intensity, promotional pricing due to market conditions. It intensified somewhat, a little bit in Q3. I don't want to spook anybody. i don't want to spook anybody We are operating in a competitive environment. we are operating in a competitive environment It's always competitive. it's always competitive We noticed a bit of an uptick in promotional activity, openings of new stores, conversions. we noticed a bit of an uptick in promotional activity openings of new stores conversions There's been quite a bit of activity in the market out there in Q3. there's been quite a bit of activity in the market out there in q3 That intensifies competition. that intensifies competition I think it's normal or it's expected, I should say. i think it's normal or it's expected i should say We operate in a competitive environment. we operate in a competitive environment I think prices are rational, but it did intensify a bit in Q3. i think prices are rational but it did intensify a bit in q3 That's what I'd like to say. that's what i'd like to say Is that clear, Tamy? is that clear tamy I don't know if that answers your question. i don't know if that answers your question We're not identifying anybody. we're not identifying anybody It's just at large, we noticed an uptick in the competitive intensity, promotional pricing due to market conditions. it's just at large we noticed an uptick in the competitive intensity promotional pricing due to market conditions It intensified somewhat, a little bit in Q3. it intensified somewhat a little bit in q3

Speaker 2: I see what you mean. Are you able to talk a bit about your conventional banner? I noticed you said discount is still driving the comp, but how is your conventional banners doing in your two regions? I think in Quebec, you picked up some share. I'm curious how it's doing in Ontario because I think there are some competitors that have been fairly aggressive rolling out this new discount square footage, particularly in Ontario. Thank you. I see what you mean. i see what you mean Are you able to talk a bit about your conventional banner? are you able to talk a bit about your conventional banner I noticed you said discount is still driving the comp, but how is your conventional banners doing in your two regions? i noticed you said discount is still driving the comp but how is your conventional banners doing in your two regions I think in Quebec, you picked up some share. i think in quebec you picked up some share I'm curious how it's doing in Ontario because I think there are some competitors that have been fairly aggressive rolling out this new discount square footage, particularly in Ontario. i'm curious how it's doing in ontario because i think there are some competitors that have been fairly aggressive rolling out this new discount square footage particularly in ontario Thank you. thank you

Speaker 13: We're pleased with our conventional stores. Our Metro stores in both provinces are holding their own really well versus their conventional peers, as measured by Nielsen GDM Conventional. We're pleased with our performance in both markets. We're holding our own. Clearly, there's been more growth in discount than in conventional over the past few years. That is continuing, albeit at a slower pace, but it's still continuing. Overall, I'm not saying our conventional stores are gaining market share, but relative to the competitive set of conventional stores, we're holding our own and pleased with our performance. We're pleased with our conventional stores. we're pleased with our conventional stores Our Metro stores in both provinces are holding their own really well versus their conventional peers, as measured by Nielsen GDM Conventional. our metro stores in both provinces are holding their own really well versus their conventional peers as measured by nielsen gdm conventional We're pleased with our performance in both markets. we're pleased with our performance in both markets We're holding our own. we're holding our own Clearly, there's been more growth in discount than in conventional over the past few years. clearly there's been more growth in discount than in conventional over the past few years That is continuing, albeit at a slower pace, but it's still continuing. that is continuing albeit at a slower pace but it's still continuing Overall, I'm not saying our conventional stores are gaining market share, but relative to the competitive set of conventional stores, we're holding our own and pleased with our performance. overall i'm not saying our conventional stores are gaining market share but relative to the competitive set of conventional stores we're holding our own and pleased with our performance

Speaker 2: Okay, thank you. That's it for me. Okay, thank you. okay thank you That's it for me. that's it for me

Speaker 10: Thank you. Next question will be from Irene Nattel at RBC Capital Markets. Please go ahead, Irene. Thank you. thank you Next question will be from Irene Nattel at RBC Capital Markets. next question will be from irene nattel at rbc capital markets Please go ahead, Irene. please go ahead irene

Speaker 8: Thanks, and good morning, everyone. Just switching gears a little bit, you noted, Eric, in your commentary that you're starting to, that you're getting more price increase requests from vendors that are tariff-related. Can you just talk a little bit about that, what the magnitude of the price increases are, you know, efforts to offset and the like? Thank you. Thanks, and good morning, everyone. thanks and good morning everyone Just switching gears a little bit, you noted, Eric, in your commentary that you're starting to, that you're getting more price increase requests from vendors that are tariff-related. just switching gears a little bit you noted eric in your commentary that you're starting to that you're getting more price increase requests from vendors that are tariff-related Can you just talk a little bit about that, what the magnitude of the price increases are, you know, efforts to offset and the like? can you just talk a little bit about that what the magnitude of the price increases are you know efforts to offset and the like Thank you. thank you

Speaker 13: Yeah, so the number of price requests, it's similar. We're still in the normal environment, but those related to tariffs, they represent about 20% of the increases demands that we're receiving from vendors. There's about 3,000 SKUs right now that are affected by tariffs that we've received increases and accepted increases related to tariffs. We negotiate hard, and it has to be with a code number, and it has to be proven and all of that. We're talking about, you know, high single digits or percentage are the asks. We don't necessarily finish there, but we negotiate as best we can to minimize the impact on our consumers in this environment where everybody's searching for value and everybody's more price sensitive. We're working hard with our vendors to minimize that impact. The counter tariff started in March. Yeah, so the number of price requests, it's similar. yeah so the number of price requests it's similar We're still in the normal environment, but those related to tariffs, they represent about 20% of the increases demands that we're receiving from vendors. we're still in the normal environment but those related to tariffs they represent about 20% of the increases demands that we're receiving from vendors There's about 3,000 SKUs right now that are affected by tariffs that we've received increases and accepted increases related to tariffs. there's about 3,000 skus right now that are affected by tariffs that we've received increases and accepted increases related to tariffs We negotiate hard, and it has to be with a code number, and it has to be proven and all of that. we negotiate hard and it has to be with a code number and it has to be proven and all of that We're talking about, you know, high single digits or percentage are the asks. we're talking about you know high single digits or percentage are the asks We don't necessarily finish there, but we negotiate as best we can to minimize the impact on our consumers in this environment where everybody's searching for value and everybody's more price sensitive. we don't necessarily finish there but we negotiate as best we can to minimize the impact on our consumers in this environment where everybody's searching for value and everybody's more price sensitive We're working hard with our vendors to minimize that impact. we're working hard with our vendors to minimize that impact The counter tariff started in March. the counter tariff started in march Some suppliers waited to impose cost increases on us, but some of those have now started to flow in. On the HABA side, one large U.S. CPG company, you know, we've started to see some price increases that we've had to take in this month in August. We're seeing some of that. Like I said in my opening statement, it's manageable. We're still in line with CPI. CPI is around 3%. We'd like it to be 2%, but we're at 3% these days. Some suppliers waited to impose cost increases on us, but some of those have now started to flow in. some suppliers waited to impose cost increases on us but some of those have now started to flow in On the HABA side, one large U.S. on the haba side one large u.s CPG company, you know, we've started to see some price increases that we've had to take in this month in August. cpg company you know we've started to see some price increases that we've had to take in this month in august We're seeing some of that. we're seeing some of that Like I said in my opening statement, it's manageable. like i said in my opening statement it's manageable We're still in line with CPI. we're still in line with cpi CPI is around 3%. cpi is around 3% We'd like it to be 2%, but we're at 3% these days. we'd like it to be 2% but we're at 3% these days

Speaker 8: Thanks, Eric. In those categories where you are seeing the price increases, are you seeing an acceleration in, let's say, you know, trade down to private label to the extent that it exists in those categories and increased penetration, or are you seeing consumers just kind of say, yeah, we're just going to switch out of these products if possible? Thanks, Eric. thanks eric In those categories where you are seeing the price increases, are you seeing an acceleration in, let's say, you know, trade down to private label to the extent that it exists in those categories and increased penetration, or are you seeing consumers just kind of say, yeah, we're just going to switch out of these products if possible? in those categories where you are seeing the price increases are you seeing an acceleration in let's say you know trade down to private label to the extent that it exists in those categories and increased penetration or are you seeing consumers just kind of say yeah we're just going to switch out of these products if possible

Speaker 13: I don't have a specific example for you, but I think those increases contribute to the rise or the growth in sales for private label. It's a contributing factor, not the only one, but it certainly helps. The price increases related to tariffs that I just referred to on the HABA side are very recent, so I can't really point to a change in consumer behavior there. On the food side, what we've seen since March, those products that have been affected, like we said before, we search for other suppliers in other countries just to minimize prices and maintain quality. The consumer, you know, we've been able to navigate and to provide value to our customers despite these tariffs. That's why I say it's been manageable. Hopefully, it'll stay that way. I don't have a specific example for you, but I think those increases contribute to the rise or the growth in sales for private label. i don't have a specific example for you but i think those increases contribute to the rise or the growth in sales for private label It's a contributing factor, not the only one, but it certainly helps. it's a contributing factor not the only one but it certainly helps The price increases related to tariffs that I just referred to on the HABA side are very recent, so I can't really point to a change in consumer behavior there. the price increases related to tariffs that i just referred to on the haba side are very recent so i can't really point to a change in consumer behavior there On the food side, what we've seen since March, those products that have been affected, like we said before, we search for other suppliers in other countries just to minimize prices and maintain quality. on the food side what we've seen since march those products that have been affected like we said before we search for other suppliers in other countries just to minimize prices and maintain quality The consumer, you know, we've been able to navigate and to provide value to our customers despite these tariffs. the consumer you know we've been able to navigate and to provide value to our customers despite these tariffs That's why I say it's been manageable. that's why i say it's been manageable Hopefully, it'll stay that way. hopefully it'll stay that way

Speaker 8: That's great. Thanks, Eric. That's great. that's great Thanks, Eric. thanks eric

Speaker 13: Thanks. Thanks. thanks

Speaker 10: Next question will be from Michael Van Aelst at TD Cowen. Please go ahead, Michael. Next question will be from Michael Van Aelst at TD Cowen. next question will be from michael van aelst at td cowen Please go ahead, Michael. please go ahead michael

Speaker 5: Yes, thank you. Just to start off, can I clarify on the same-store sales growth, when you're talking about two-year stack, are you looking at it that way because you benefited in May of last year when there was a boycott on a competitor and therefore, you know, had a bigger boost last year and you're cycling that now? If so, did you see your same-store sales growth reaccelerate in June after you cycled the May boycott? Yes, thank you. yes thank you Just to start off, can I clarify on the same-store sales growth, when you're talking about two-year stack, are you looking at it that way because you benefited in May of last year when there was a boycott on a competitor and therefore, you know, had a bigger boost last year and you're cycling that now? just to start off can i clarify on the same-store sales growth when you're talking about two-year stack are you looking at it that way because you benefited in may of last year when there was a boycott on a competitor and therefore you know had a bigger boost last year and you're cycling that now If so, did you see your same-store sales growth reaccelerate in June after you cycled the May boycott? if so did you see your same-store sales growth reaccelerate in june after you cycled the may boycott

Speaker 13: This quote-unquote boycott may have helped us a little bit last year, so we had to comp that. That's one of the reasons I referred to the two-year number to give you a better picture. We're not going to give you details on our sales. We don't give guidance on our sales in June, July, or August, or whatever. The quarter ended early July, so it's all pretty much behind us now. This quote-unquote boycott may have helped us a little bit last year, so we had to comp that. this quote-unquote boycott may have helped us a little bit last year so we had to comp that That's one of the reasons I referred to the two-year number to give you a better picture. that's one of the reasons i referred to the two-year number to give you a better picture We're not going to give you details on our sales. we're not going to give you details on our sales We don't give guidance on our sales in June, July, or August, or whatever. we don't give guidance on our sales in june july or august or whatever The quarter ended early July, so it's all pretty much behind us now. the quarter ended early july so it's all pretty much behind us now

Speaker 5: All right. On the distribution centers that have opened, can you provide some color as to how they performed during Q3 in terms of pick efficiencies and services stores, and how that is different heading into Q4? All right. all right On the distribution centers that have opened, can you provide some color as to how they performed during Q3 in terms of pick efficiencies and services stores, and how that is different heading into Q4? on the distribution centers that have opened can you provide some color as to how they performed during q3 in terms of pick efficiencies and services stores and how that is different heading into q4

Speaker 13: Our food DCs in Terrebonne and Toronto Fresh phase II were very pleased with our performance. If I look at cost per case productivity numbers, we're very pleased with the performance. It did contribute to our gross margin improvement of 20 basis points, those productivity gains. We're pleased with the performance. We're on track, pretty much on track with our head of our plan related to our DC performance. That performance of Q3 is continuing into Q4. I'm not really concerned by that. It's hard work, but ramping up well. I don't know if that answers your question. Our food DCs in Terrebonne and Toronto Fresh phase II were very pleased with our performance. our food dcs in terrebonne and toronto fresh phase ii were very pleased with our performance If I look at cost per case productivity numbers, we're very pleased with the performance. if i look at cost per case productivity numbers we're very pleased with the performance It did contribute to our gross margin improvement of 20 basis points, those productivity gains. it did contribute to our gross margin improvement of 20 basis points those productivity gains We're pleased with the performance. we're pleased with the performance We're on track, pretty much on track with our head of our plan related to our DC performance. we're on track pretty much on track with our head of our plan related to our dc performance That performance of Q3 is continuing into Q4. that performance of q3 is continuing into q4 I'm not really concerned by that. i'm not really concerned by that It's hard work, but ramping up well. it's hard work but ramping up well I don't know if that answers your question. i don't know if that answers your question

Speaker 5: Your outlook statement changed a bit. You had talked about productivity initiatives or efficiencies, and then you talked about service to the stores. It seems like you took out the part of this quarter where you're saying you're looking to improve service to the stores. I was wondering. Your outlook statement changed a bit. your outlook statement changed a bit You had talked about productivity initiatives or efficiencies, and then you talked about service to the stores. you had talked about productivity initiatives or efficiencies and then you talked about service to the stores It seems like you took out the part of this quarter where you're saying you're looking to improve service to the stores. it seems like you took out the part of this quarter where you're saying you're looking to improve service to the stores I was wondering. i was wondering

Speaker 13: We took it out because the transition is over and our service to our stores is very good. We're not concerned by that. It's done. We're focused on productivity, efficiency gains. The service to the stores is satisfactory and we're pleased with that performance. We're always focused on service to our stores, but it's not a specific focus going forward. We took it out because the transition is over and our service to our stores is very good. we took it out because the transition is over and our service to our stores is very good We're not concerned by that. we're not concerned by that It's done. it's done We're focused on productivity, efficiency gains. we're focused on productivity efficiency gains The service to the stores is satisfactory and we're pleased with that performance. the service to the stores is satisfactory and we're pleased with that performance We're always focused on service to our stores, but it's not a specific focus going forward. we're always focused on service to our stores but it's not a specific focus going forward

Speaker 5: Okay. I know there's no kind of finish line, but when do you, how much longer do you expect it to be before you get a run rate of efficiencies in the DCs that is in line with the business plan or at least in line with what you now expect? Okay. okay I know there's no kind of finish line, but when do you, how much longer do you expect it to be before you get a run rate of efficiencies in the DCs that is in line with the business plan or at least in line with what you now expect? i know there's no kind of finish line but when do you how much longer do you expect it to be before you get a run rate of efficiencies in the dcs that is in line with the business plan or at least in line with what you now expect

Speaker 13: I think we're there now. We're in line with our business plans. The freezer, both freezers in Quebec and Ontario, were ahead of plan and very pleased with the performance, the productivity. The automated fresh in Toronto is a bit more of a challenge. The supply chain has to adjust. The packaging from our vendors has to adjust to be automatable. We'd like a higher percentage of cases to go through the automation system. We're close to where we want to be, but we're not there yet. There's room to improve on the fresh side. It may take a little more time, as I said, the supply chain adjusts. The rest, fresh meat, frozen meat, in both provinces, deli, dairy, we're very pleased with our performance. I think we're there now. i think we're there now We're in line with our business plans. we're in line with our business plans The freezer, both freezers in Quebec and Ontario, were ahead of plan and very pleased with the performance, the productivity. the freezer both freezers in quebec and ontario were ahead of plan and very pleased with the performance the productivity The automated fresh in Toronto is a bit more of a challenge. the automated fresh in toronto is a bit more of a challenge The supply chain has to adjust. the supply chain has to adjust The packaging from our vendors has to adjust to be automatable. the packaging from our vendors has to adjust to be automatable We'd like a higher percentage of cases to go through the automation system. we'd like a higher percentage of cases to go through the automation system We're close to where we want to be, but we're not there yet. we're close to where we want to be but we're not there yet There's room to improve on the fresh side. there's room to improve on the fresh side It may take a little more time, as I said, the supply chain adjusts. it may take a little more time as i said the supply chain adjusts The rest, fresh meat, frozen meat, in both provinces, deli, dairy, we're very pleased with our performance. the rest fresh meat frozen meat in both provinces deli dairy we're very pleased with our performance

Speaker 5: Great. Thank you very much. Great. great Thank you very much. thank you very much

Speaker 10: Thank you. Next question will be from Yiyang Liu at Scotiabank. Please go ahead, Yiyang. Thank you. thank you Next question will be from Yiyang Liu at Scotiabank . next question will be from yiyang liu at scotiabank Please go ahead, Yiyang. please go ahead yiyang

Speaker 12: Thank you, and good morning. I wanted to ask about GLP-1s, in particular Ozempic and Wegovy. Can you talk about the state of your product business and how you expect the expiry of those weight loss drugs' patents is expected to impact your generic business and how these transitions have played out historically? Thank you, and good morning. thank you and good morning I wanted to ask about GLP-1s, in particular Ozempic and Wegovy. i wanted to ask about glp-1s in particular ozempic and wegovy Can you talk about the state of your product business and how you expect the expiry of those weight loss drugs' patents is expected to impact your generic business and how these transitions have played out historically? can you talk about the state of your product business and how you expect the expiry of those weight loss drugs' patents is expected to impact your generic business and how these transitions have played out historically

Speaker 13: Should I let Jean-Michel take this one? Should I let Jean-Michel take this one? should i let jean-michel take this one

Speaker 3: Can you hear me? Can you hear me? can you hear me

Speaker 13: Can you hear him well? Yes. Can you hear him well? can you hear him well Yes. yes

Speaker 3: Yeah. Right now, maybe I should clarify one thing. The only patent that's being challenged is for Ozempic. Wegovy, which is the one that actually has the indication for weight loss, is not going to be challenged in terms of its patent since it's fairly new in Canada. It's too early to tell how it's going to happen with Health Canada in terms of approval. We know that there are some companies that have submitted to have those patents broken. Obviously, if that's the case, we're going to work with our vendor community and our partners to try to get a product equivalent, as we always do with every generic molecule that has sufficient volume. Usually, the way it works is when a molecule becomes generic, the networks convert as quickly as the pharmacists convert as quickly as they can because it is margin accretive for them within their stores. Yeah. yeah Right now, maybe I should clarify one thing. right now maybe i should clarify one thing The only patent that's being challenged is for Ozempic. the only patent that's being challenged is for ozempic Wegovy, which is the one that actually has the indication for weight loss, is not going to be challenged in terms of its patent since it's fairly new in Canada. wegovy which is the one that actually has the indication for weight loss is not going to be challenged in terms of its patent since it's fairly new in canada It's too early to tell how it's going to happen with Health Canada in terms of approval. it's too early to tell how it's going to happen with health canada in terms of approval We know that there are some companies that have submitted to have those patents broken. we know that there are some companies that have submitted to have those patents broken Obviously, if that's the case, we're going to work with our vendor community and our partners to try to get a product equivalent, as we always do with every generic molecule that has sufficient volume. obviously if that's the case we're going to work with our vendor community and our partners to try to get a product equivalent as we always do with every generic molecule that has sufficient volume Usually, the way it works is when a molecule becomes generic, the networks convert as quickly as the pharmacists convert as quickly as they can because it is margin accretive for them within their stores. usually the way it works is when a molecule becomes generic the networks convert as quickly as the pharmacists convert as quickly as they can because it is margin accretive for them within their stores When we talk about margin here, it's really professional allowances, which they have to reinvest in their stores according to the law in Quebec. It is margin, but it's margin that needs to be guided towards certain expenses within their stores. I hope that answers a little bit of your question. When we talk about margin here, it's really professional allowances, which they have to reinvest in their stores according to the law in Quebec. when we talk about margin here it's really professional allowances which they have to reinvest in their stores according to the law in quebec It is margin, but it's margin that needs to be guided towards certain expenses within their stores. it is margin but it's margin that needs to be guided towards certain expenses within their stores I hope that answers a little bit of your question. i hope that answers a little bit of your question

Speaker 12: Yeah, that's helpful. Thank you. Yeah, that's helpful. yeah that's helpful Thank you. thank you

Speaker 13: To complement on that, for the company here as a distributor, if those drugs become generics, we will make a generic fee, a distribution fee on the generic lower price. There could be a dilutive impact here for that, but volume usually picks up the slack. To complement on that, for the company here as a distributor, if those drugs become generics, we will make a generic fee, a distribution fee on the generic lower price. to complement on that for the company here as a distributor if those drugs become generics we will make a generic fee a distribution fee on the generic lower price There could be a dilutive impact here for that, but volume usually picks up the slack. there could be a dilutive impact here for that but volume usually picks up the slack

Speaker 12: Thank you. I guess just another, I wanted to double click on the performance between your two provinces. I'm wondering in particular about the exposure to certain Ontario markets that are perhaps more impacted by the tariff environment. Have you noticed any consumer behavior changes there? Thank you. thank you I guess just another, I wanted to double click on the performance between your two provinces. i guess just another i wanted to double click on the performance between your two provinces I'm wondering in particular about the exposure to certain Ontario markets that are perhaps more impacted by the tariff environment. i'm wondering in particular about the exposure to certain ontario markets that are perhaps more impacted by the tariff environment Have you noticed any consumer behavior changes there? have you noticed any consumer behavior changes there

Speaker 13: Not that we can point out more specifically that what we're describing as the consumer environment, competitive environment concerns both of our markets. Not that we can point out more specifically that what we're describing as the consumer environment, competitive environment concerns both of our markets. not that we can point out more specifically that what we're describing as the consumer environment competitive environment concerns both of our markets

Speaker 12: Thank you. Thank you. thank you

Speaker 10: Thank you. Next question will be from Mark Petrie at CIBC. Please go ahead, Mark. Thank you. thank you Next question will be from Mark Petrie at CIBC . next question will be from mark petrie at cibc Please go ahead, Mark. please go ahead mark

Speaker 11: Yeah, thanks. Good morning. I wanted to just ask about the SG&A rate. Maybe if you can give some more specifics about sort of the puts and takes there. Eric, you've commented about Fresh phase II, but hoping you could give some sense of when you would expect that facility to turn to a tailwind when it comes to SG&A. Thank you. Yeah, thanks. yeah thanks Good morning. good morning I wanted to just ask about the SG&A rate. i wanted to just ask about the sg&a rate Maybe if you can give some more specifics about sort of the puts and takes there. maybe if you can give some more specifics about sort of the puts and takes there Eric, you've commented about Fresh phase II, but hoping you could give some sense of when you would expect that facility to turn to a tailwind when it comes to SG&A. eric you've commented about fresh phase ii but hoping you could give some sense of when you would expect that facility to turn to a tailwind when it comes to sg&a Thank you. thank you

Speaker 9: Okay, so good morning, Mark. Maybe I start with SG&A. As I've mentioned, SG&A was at 10.2% of sales this quarter, similar to last quarter. I mentioned that we cycled out transition costs, so obviously that was a tailwind for us. However, there's overall inflation in pretty much all the categories of expenses that flow into SG&A. We're happy with the cost control performance we've had, but we have seen SG&A inflation pressures there for sure. Also, the commissioning of our distribution center, Fresh phase II in Toronto last summer, is now driving recurring expenses that are now in SG&A and that we are going to be incorporated going forward. Finally, I would say, as I mentioned, that the ongoing growth of the e-commerce business is driving fees to our partners in SG&A. I guess nothing abnormal, but consistent with the growth in e-commerce sales. Okay, so good morning, Mark. okay so good morning mark Maybe I start with SG&A. maybe i start with sg&a As I've mentioned, SG&A was at 10.2% of sales this quarter, similar to last quarter. as i've mentioned sg&a was at 10.2% of sales this quarter similar to last quarter I mentioned that we cycled out transition costs, so obviously that was a tailwind for us. i mentioned that we cycled out transition costs so obviously that was a tailwind for us However, there's overall inflation in pretty much all the categories of expenses that flow into SG&A. however there's overall inflation in pretty much all the categories of expenses that flow into sg&a We're happy with the cost control performance we've had, but we have seen SG&A inflation pressures there for sure. we're happy with the cost control performance we've had but we have seen sg&a inflation pressures there for sure Also, the commissioning of our distribution center, Fresh phase II in Toronto last summer, is now driving recurring expenses that are now in SG&A and that we are going to be incorporated going forward. also the commissioning of our distribution center fresh phase ii in toronto last summer is now driving recurring expenses that are now in sg&a and that we are going to be incorporated going forward Finally, I would say, as I mentioned, that the ongoing growth of the e-commerce business is driving fees to our partners in SG&A. finally i would say as i mentioned that the ongoing growth of the e-commerce business is driving fees to our partners in sg&a I guess nothing abnormal, but consistent with the growth in e-commerce sales. i guess nothing abnormal but consistent with the growth in e-commerce sales Overall, I would say happy with the performance on SG&A. Overall, I would say happy with the performance on SG&A. overall i would say happy with the performance on sg&a

Speaker 13: More specific to Fresh phase II, like I said, we're on plan, we're on track with the ramp-up that we expected. I said automation, we could automate, if we could automate even, if we can put through more products through the automation machine, it would be even better. That takes time because it's a supply chain, it's a vendor adjustment. It's generally a tailwind. We're pleased with the performance, we're reaching our objectives, and there's going to be room for more as the industry adjusts. I don't know how I give you a clearer answer. More specific to Fresh phase II, like I said, we're on plan, we're on track with the ramp-up that we expected. more specific to fresh phase ii like i said we're on plan we're on track with the ramp-up that we expected I said automation, we could automate, if we could automate even, if we can put through more products through the automation machine, it would be even better. i said automation we could automate if we could automate even if we can put through more products through the automation machine it would be even better That takes time because it's a supply chain, it's a vendor adjustment. that takes time because it's a supply chain it's a vendor adjustment It's generally a tailwind. it's generally a tailwind We're pleased with the performance, we're reaching our objectives, and there's going to be room for more as the industry adjusts. we're pleased with the performance we're reaching our objectives and there's going to be room for more as the industry adjusts I don't know how I give you a clearer answer. i don't know how i give you a clearer answer

Speaker 11: Okay, fair enough. With specific to the online growth, is it fair to say that a lot of that growth is being driven by sort of short timeframe delivery, third-party orders? I guess, what's your latest thinking about your infrastructure and processes? I know that's been a source of constant review, but any view to any alterations in that over the next 12-18 months? Okay, fair enough. okay fair enough With specific to the online growth, is it fair to say that a lot of that growth is being driven by sort of short timeframe delivery, third-party orders? with specific to the online growth is it fair to say that a lot of that growth is being driven by sort of short timeframe delivery third-party orders I guess, what's your latest thinking about your infrastructure and processes? i guess what's your latest thinking about your infrastructure and processes I know that's been a source of constant review, but any view to any alterations in that over the next 12 - 18 months? i know that's been a source of constant review but any view to any alterations in that over the next 12 - 18 months

Speaker 4: Good morning, Mark. It's Marc here. As you know, we've gone to market with a multi-service model, meaning that we leverage third party, we leverage Click and Collect in our own infrastructure, and we do our own delivery. To your first question, the growth on our own delivery has been at the same level as third parties. Consumers, there's a mix of need in the market. Consumers are looking for quick delivery, but also planned delivery and Click and Collect. All of these services have been growing at a steady rate. As we look at the future of our platform, we will continue to go to market with multiple types of investment or platform through third-party marketplaces, Click and Collect, and our own delivery. As you noticed in our comments, we just signed a new partnership with DoorDash, giving us a new channel to market through the DoorDash marketplace. Good morning, Mark. good morning mark It's Marc here. it's marc here As you know, we've gone to market with a multi-service model, meaning that we leverage third party, we leverage Click and Collect in our own infrastructure, and we do our own delivery. as you know we've gone to market with a multi-service model meaning that we leverage third party we leverage click and collect in our own infrastructure and we do our own delivery To your first question, the growth on our own delivery has been at the same level as third parties. to your first question the growth on our own delivery has been at the same level as third parties Consumers, there's a mix of need in the market. consumers there's a mix of need in the market Consumers are looking for quick delivery, but also planned delivery and Click and Collect. consumers are looking for quick delivery but also planned delivery and click and collect All of these services have been growing at a steady rate. all of these services have been growing at a steady rate As we look at the future of our platform, we will continue to go to market with multiple types of investment or platform through third-party marketplaces, Click and Collect, and our own delivery. as we look at the future of our platform we will continue to go to market with multiple types of investment or platform through third-party marketplaces click and collect and our own delivery As you noticed in our comments, we just signed a new partnership with DoorDash, giving us a new channel to market through the DoorDash marketplace. as you noticed in our comments we just signed a new partnership with doordash giving us a new channel to market through the doordash marketplace We're continuing in the same line as our strategy of the last few years. We're continuing in the same line as our strategy of the last few years. we're continuing in the same line as our strategy of the last few years

Speaker 11: Okay, thanks for that. One last one. As you look within Q3 and then in Q4 to date, and you think about the buy Canadian trend, would you say that that trend is stable, accelerating, or decelerating? Okay, thanks for that. okay thanks for that One last one. one last one As you look within Q3 and then in Q4 to date, and you think about the buy Canadian trend, would you say that that trend is stable, accelerating, or decelerating? as you look within q3 and then in q4 to date and you think about the buy canadian trend would you say that that trend is stable accelerating or decelerating

Speaker 4: It's decelerating somewhat. Consumers are still buying more Canadians, so we're seeing more growth on Canadian product and non-Canadian product, but it has decelerated slightly. It's decelerating somewhat. it's decelerating somewhat Consumers are still buying more Canadians, so we're seeing more growth on Canadian product and non-Canadian product, but it has decelerated slightly. consumers are still buying more canadians so we're seeing more growth on canadian product and non-canadian product but it has decelerated slightly

Speaker 11: Okay, thanks for that. All the best. Okay, thanks for that. okay thanks for that All the best. all the best

Speaker 4: Thanks. Thanks. thanks

Speaker 10: Once again, ladies and gentlemen, if you do have any questions, please press star followed by one on your telephone keypad. Your next question will be from Vishal Sridhar at National Bank. Please go ahead, Vishal. Once again, ladies and gentlemen, if you do have any questions, please press star followed by one on your telephone keypad. once again ladies and gentlemen if you do have any questions please press star followed by one on your telephone keypad Your next question will be from Vishal Sridhar at National Bank . your next question will be from vishal sridhar at national bank Please go ahead, Vishal. please go ahead vishal

Speaker 7: Hi, this is Anshul in for Vishal Sridhar. I wanted to follow up on your duplicate costs related to the new DCs. From your last conference call, it was fair to say that you lapped peak duplicate costs in Q2 and Q3 last year. Is it fair to expect SG&A leverage going forward, notwithstanding heightened third-party partnership fees? Hi, this is Anshul in for Vishal Sridhar. hi this is anshul in for vishal sridhar I wanted to follow up on your duplicate costs related to the new DCs. i wanted to follow up on your duplicate costs related to the new dcs From your last conference call, it was fair to say that you lapped peak duplicate costs in Q2 and Q3 last year. from your last conference call it was fair to say that you lapped peak duplicate costs in q2 and q3 last year Is it fair to expect SG&A leverage going forward, notwithstanding heightened third-party partnership fees? is it fair to expect sg&a leverage going forward notwithstanding heightened third-party partnership fees

Speaker 9: As you've mentioned, we lapped duplicate costs in the third quarter, this quarter, Q2 last year. Going forward, we would not have that lapse. I think SG&A, we're always looking to create leverage and grew SG&A at a lower pace than revenue growth. I would expect modest leverage in the coming quarters for SG&A. As you've mentioned, we lapped duplicate costs in the third quarter, this quarter, Q2 last year. as you've mentioned we lapped duplicate costs in the third quarter this quarter q2 last year Going forward, we would not have that lapse. going forward we would not have that lapse I think SG&A, we're always looking to create leverage and grew SG&A at a lower pace than revenue growth. i think sg&a we're always looking to create leverage and grew sg&a at a lower pace than revenue growth I would expect modest leverage in the coming quarters for SG&A. i would expect modest leverage in the coming quarters for sg&a

Speaker 7: Understood. Thank you. Understood. understood Thank you. thank you

Speaker 10: Thank you. At this time, it appears we have no other questions registered, so I will turn the call back over to Sharon Kadoche. Thank you. thank you At this time, it appears we have no other questions registered, so I will turn the call back over to Sharon Kadoche. at this time it appears we have no other questions registered so i will turn the call back over to sharon kadoche

Speaker 6: Thank you all for your interest in Metro., and please mark your calendars for our Q4 results on November 19th. Thank you. Thank you all for your interest in Metro ., and please mark your calendars for our Q4 results on November 19th. thank you all for your interest in metro and please mark your calendars for our q4 results on november 19th Thank you. thank you

Speaker 10: Thank you. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending, and at this time, we ask that you please disconnect your lines. Have a good day. Thank you. thank you Ladies and gentlemen, this does indeed conclude your conference call for today. ladies and gentlemen this does indeed conclude your conference call for today Once again, thank you for attending, and at this time, we ask that you please disconnect your lines. once again thank you for attending and at this time we ask that you please disconnect your lines Have a good day. have a good day