Q4 2024 Metro Inc Earnings Call

The normal course of business between November 27th, 2024, and November 26th, 2025 up to 10 million of our common shares. So, an increase of 3 million shares,

Our fiscal.

Disclose annual growth targets. That is to grow sales by 2 to 4% operating income by 4 to 6 and adjusted earnings per share by 8 to 10% over the medium and long term. That's it for me.

24 results have landed well within the guidance provided last year, and we expect to gradually resume our profit growth. In fiscal 25, and we maintain our publicly

I'll turn it over to Eric.

Thank you, France. And

Our supply chain modernization project that we started in 2017. Last September, we completed the second and Final Phase of our Toronto. Automated fresh facility.

To take a moment to highlight the completion of.

Reaching the final Milestone of our 7-year nearly 1 billion dollar investment in our supply chain. It was by no means an easy Journey building

On existing sites while maintaining service to our stores during the CEO. Pandemic was a significant challenge as with the implementation of new systems and automation technology.

You know, Ontario, we built 2, new automated distribution centers, a frozen facility that that opened in 2022 and the fresh facility with Phase 1 in 2021.

And Phase 2 that we just finalized.

Our fresh produce Distribution Center. In Laval this year,

In Quebec. We built a new automated fresh and frozen Distribution Center in tarban. That opened in 2023 and we expand

So, we now have state-of-the-art distribution centers for fresh and frozen products in both provinces.

And this transformation will provide capacity for future growth and efficiency while strengthening our Market position. I want to really thank my colleague

And our partners for their hard work to successfully deliver this ambitious program.

By strong comparable, sales growth in both Food, and pharmacy. On top of a very strong quarter last year.

Fiscal, 24 ended uh, with a solid fourth quarter driven.

Customers across all banners in a very competitive market.

our teams continue to offer, good value to our

For this transition year. Met our expectations and have landed well within the guidance provided last year.

This resulted in overall market share gains and dollars and tonnage as far as mentioned our results.

For the quarter of food, same store sales were up 2.2%

For a 2-year stack of 9.1%, our discount banners continue to outperform our conventional banners. However, we are seeing the gaap narrow as we cycle our

Strong discount performance over the past 3 years. Our internal food basket. Inflation came in slightly higher than the reported food CPI of

.7%.

Basket remained stable promotional penetration was up. Again this this quarter compared to last year and private label sales, continue to outpace

Our merchandising programs continue to resonate well, with his customers with transaction counts up in all banners. While the

Brand.

A 12 week comparable basis, fueled by third-party Partnerships for same day, delivery.

25.

and the ongoing expansion of our click and collect service to our discount banners, the service is now deployed at Super C and in progress, at Basics, with additional stores planned,

as well mentioned, we opened 9 new

Stores in fiscal, 25, including a few conversions.

2024, we see more opportunities in the coming years and our plan calls for a dozen new discounts.

On the pharmacy.

% for a 2-year stack of 11.5%.

pharmacists, this quarter with comp sales of 5.7

Prescription sales were up. 6.8% driven by organic growth specialty medications and professional.

Services commercial sales were up 3.3% driven by consistent growth across all core categories.

For re-recorded, 4.3 million, Clinical Services performed in our network of pharmacies.

A number that is well aligned with our leading Market position in the province of Quebec.

additionally, 650,000 of these Services were for treating minor ailments helping to take pressure off the Health Care System following

Recent adoption of bills. 67 here in.

We are expecting further increases in Professional Services. That may be performed in our phies.

Hard to inform customers, that more Clinical Services will be offered at their neighborhood. Pharmacy.

As such our teams are working.

Innovations in fiscal 24. And for fiscal, 25, we are planning another 30 major projects, including 12 expansion and 18, major Renovations of which not

In in the pharmacy Network, we delivered 28 Major Rental.

Will be our new store layout design.

October.

Turning to loyalty building on the success of Muay and Quebec. We launched more rewards in Ontario late in

Members will earn points by shopping at Metro Food Basics and our pharmacie banners across Ontario. We are pleased with the customer response to date.

With more than 1 million enrollments in less than 4 weeks.

New members have already started to redeem in store and are providing positive comments on the ease of accumulation and Redemption of Rewards.

In Quebec, or more program continues to achieve strong performance metrics with, with 2.7.

Million active members across our banners members. Visiting multiple Banners are spending on average 5 times, more than single banner members, our strategy to drive more

Member engagement is delivering results.

so to conclude, as we begin, the new fiscal year, our teams are focused on exe, executing our business plans,

Positions for growth to create long-term value, shareholder value.

To deliver value and a great customer experience in all of our banners. And with the significant investments in the modernization of our supply chain behind us. We are well

Thank you and we'll be happy to take your questions.

Sir, ladies and gentlemen.

Questions, please, press star, followed by 1 on your touch Tom phone. You will hear a prompt that your hand has been raised. And if you wish to decline from the polling process, please press star followed by 2. And if using your speaker phone you will need to lift the handset before pressing any keys. Please go ahead and press star 1. Now if you have any questions

First, we will hear from Irene natel at RBC, please go ahead.

Appreciate it. It sounds as though you're continuing to see an intensification of consumer, value seeking Behavior. Uh, can you talk a little bit?

Thanks and good morning everyone. Uh thank you for all your commentary. Uh very

About you know sort of um other than your promotional intensity and trade private label, what you're seeing in both your front of the store in pharmacie as well as in food. Sweet. Thank you.

Of years and it continues, I would say in pretty similar fashion. So on the, on the buying Behavior,

Um Irene I would say there's intensification in the in the search for Value. It's been there for several quarters, actually the last couple.

Is there we see that in both food and pharmacie? Um, we're well positioned to Service. Uh, those value needs in all of our banners. So be it Metro Basics, Super C and

Uh, people are buying more on promotion. No change there. They're like you said they're buying more private label, no change.

We have effective promotional strategies to resonating well, uh, customer counts are up, uh, in all banners. So, you know, uh, the the

While you search, uh, has not changed. Uh, there is, there's valuable searching in in all of our banners, uh, obviously more in discount than conventional, but still still the

The value, the value is on.

In our, in all of our banners.

So, not a big, not a big change.

Um, I wouldn't call it in.

specification, I think the behavior is

Is pretty much the same.

Thanks Eric, much appreciated. Uh, quick question on you mentioned.

To Discount does that in both Ontario and Quebec.

There were going to be some conversions from convention.

Uh, there could be so we're not going to Telegraph for competitive. I'll just competitive reasons, but

We have a few planned in, in, in Quebec. We'll see. We'll see about Ontario. It's, it's more. It's more of a Quebec, uh, program. Uh, but there could be, you never know.

To, to the very to the compelling features of the program. Um, how do you expect the adoption rate to mature in Ontario as word kind of spreads about?

Thank you. And just 1 final question if I might. Um, and this goes to the introduction of 1 Ontario. Um, you know, here on Quebec we're very

The significant value out of well relative to to air miles.

A very good start, a million members in in in 4 weeks or so is is quite strong. Um, we're very confident that we're going to reach the metrics that we had with our previous program.

Well, I I'll I'll let Mark answer and give you more color but we've had a a good

Quite fast.

So, um, our, our teams are really focused on on engaging customers, finding them up, and then engaging them digitally to, uh, to get more of their spend. So Marc if you want to add the

Uh, comments are good. Uh, we have a, we have a good strong program that you know, is improved personalization, provide rewards, um,

I think you said it. Well Eric I would just added that the that in in as uh as we as we talked about in a little as 4 weeks, we, we had about a million

Of of points and uh, and how fast they can redeem for dollars in savings. So, um, so we're confident that the program is going to resonate. Uh, we're

In Ontario and already C consumers shopping. Our stores are happy about their the ease of um of accumulation.

our experience in Quebec and uh and and we're looking forward to continue to grow the base of member and to continue to

to uh, to

Increase the engagement in the program and to the overall commercial program and and both our banners and Pharmacy in Ontario.

That answer your question.

It does. Thank you gentlemen.

Thank you. Next question, will be from Tammy Chen, at BMO Capital markets, please go ahead.

Can you talk about how you thought, uh, about that expectation, maybe 1 of the things? I think we're curious about is what you expect of the unwind of the, you know, the duplic duplicative costs.

Hi, good morning, thanks for the question. Um, I was just wanted to start off with your expectation for Cisco, 25. Um, you mentioned, you expect profit growth to gradually resume?

The supply chain projects and any other notable pieces that factored into your outlook.

Yes, so Tammy. Hi, good morning. Uh, so by by gradual what we

Mean is that uh, you know, there's no magic Line in the Sand uh that after September 28th, we're back to uh we're back to full uh pre-transition the years.

We mean is that, you know, for example we're still ramping up the fresh DC Phase 2 in in Toronto and we're improving the metrics of the other DC. So we we see gradual improvements.

And and and and and reductions in the duplicated costs. Now they're better than last year for sure. So by gradual, what we mean is, when we build our plan,

For fiscal 25.

By the term gradual.

Uh, our our, our EPS growth objective but our profitability will in will improve gradually throughout the year. That's what we mean by uh, by the by.

Got it. Okay, thank you for that. Um and for the gross margin this quarter I you know I think you're

Stopping, you know, year-over-year from last year that that had the the strike and passed. It just would have thought that'd be a bit more Improvement. So, anything to call out on the margin performance, this

No, I think our gross margin was uh very much in line with our expectations, our mix. Um and

The market environment.

We're in. So gross, margin was up uh 20 basis points.

Pretty consistent, uh, environment. So the margin, uh,

a bit last year, but like I said, uh,

Came in at the level we expected.

1 is on the pharmacie side here. Um, you mentioned the uh the same store sales is almost 7%. Several things drilled that I don't know if you could

okay, and my last

Rent that between, you know, organic growth, the specialty and Professional Services. And when you talk about the, the the projects for next year, I think you mentioned 30 million

Major of them. So is that kind of the the pace we should expect between either expansions or, or major rentals, kind of like that 30 a year. Thanks.

Yep. So on the when you when you look at retail sales pharmacie growth, um a lot of it is coming from organic growth and then the rest is complemented by

Okay, so Michelle, we'll take that.

Next year is uh, fairly close to to the Run rate. Uh, we're hoping a little bit higher at term, but it's a fairly close to where we want to be in terms of uh, investing in.

Some of the newer sales from some of the higher cost medication specialty as we mentioned and Professional Services. Uh that's probably the way you should look at it um and the 30 the 30 major project.

Our Network and making sure that we're rolling out the the best Concepts possible to better serve customers.

and it's uh, um, helped also by the services and the specialty that John, Michelle, we're not going to

So, just on the growth of RX there is strong organic growth.

A few contributors but they're strong organic growth. We have new patients.

between the different contributors there.

Our, our our, a Tailwind if you want.

For, for our X and Quebec, and we're really well positioned to capture that.

Makes sense. That's it for me. Thank you.

Next question will be, from there at National Bank. Please go ahead.

Thank you.

Hi. Um, thanks for taking my questions. Uh, now would be

Major supply chain, Investments, um, largely behind us, and all the work Associated and with the announcement of France was um pending departure.

And there have been media indications of change.

And responsibilities among Senior Management as well just wondering how investors should think about the likelihood of more executive changes in the year ahead, or do you think it will be a period of constancy with the executive team looking into the near term?

Well the uh now it's retired.

Department of my colleague. That was a little earlier than we would have liked. I'm saying this to, uh, tongue and cheek know that. That was a, a little faster than we would have liked the rest of the succession plan is working as planned, uh, was elevated.

For Quebec and Ontario. So, with internal candidates.

To Chief Operating Officer. We, we, we went back to the EVP structure.

you know, Carmen fortino, who heads our

chain.

Is is at a more advanced stage than possible it is.

So he's he's going to stay on for another year. So there will be normal succession after that. So uh, yeah, it's it's normal succession planning and

You know, we're pleased that that we have a good strong bench and that we were able to fill the positions.

As as we, uh, as we execute on that plan.

we will, we are

out.

Market uh uh, outside for a CFO candidate that process is ongoing and we'll keep you, uh, keep you posted. But uh, pass was is here until the the spring so you

I haven't seen the last of them yet.

Okay, thank you for that.

1 of your drugstore, peers, indicated softness in certain categories, and it's is taking certain actions of pricing and stores.

pjc is Trends seem to be solid in the front store so I'm not sure if you're seeing similar pressures

Part part perhaps due to different category mixes, but how does management feel about the value proposition at pjc and are they seeing the, the search for Value management?

Best at in, in pjc front stores, that could suggest future weekend in trends.

Well, something that Jean Jean.

Price positioning is all is very competitive.

With, with the best prices in the market.

If if, uh, we we do our job if we do our job, right? So the mix of categories versus the competitor, uh, the comments that you've made and then

It, it's a, it's a well established brand that resonates well in the province of Quebec. And that, and that continues. So, people looking for Value, you can find Value in 2, I always have and and always will

for sure, we don't sell many electronics so I can't comment on on on on that more specifically and food is is less of a

Uh, uh, seasonal. You know, January is providing good value. Yep. That's exactly it. And as Eric mentioned, as an opening in his opening statement, uh, we're seeing this

It's it's a smaller part of the mix of junk food. There is some food, but it's it's a smaller part. So in the core categories health and beauty cosmetics,

Underlying Trends in in Pharma. So, obviously promotional is growing a little bit faster than regular sales. Um, we're seeing seeking, we're seeing customers, see us seeking value every day in our stores and our commercial.

Or continue to resonate well with customers um and our core categories. I think

in terms of price point on the Cosmetics end, we uh we're a little bit more of a mast

Um um in terms of our offering which is resonating very well right now with with customers. So uh so the dynamic is a little bit different based on the assortment that we do have. Um, and right now it's working well for us.

Okay. And um capex came in a little bit lighter than we would have, uh, expected this year.

Think about, um, uh, capex. Um, next year I know you can have some indications, but, uh, further thoughts would be appreciated.

I think the guide was around 650. Um do we expect some of that capex to to flow into next year that that Delta and how should we

Uh, so yes, that will, uh, some of these projects will flow into the next fiscal year. You know, capex is more choppy than p&l, obviously. So, uh, while we

yeah, so it's timing Xiao

Uh, we constantly we have we go back every project and we we make sure we have the right project, the right return, the right reasons. So uh, it's timing. And so what I said earlier was that next

Be constantly.

uh, you know, giving the given the Big Supply chains behind us, you, you know,

we should expect an environment of 550 to 600 so we'll probably be on the on the

Um, giving the sum of the capex will be pushing to the fiscal 25.

giving.

Okay. Uh, thank you very much. Thank you.

Next question.

Will be from Michael Van Ells at TD Cowen. Please go ahead.

The end of your comments on the guidance. Earlier that you were expecting it to to hit that 8 to 10% EPS growth Target in fiscal. 25 just not

Good morning. Um, so fro I just wanted to quickly confirm that you, you did say.

First quarter, I guess is what you're assuming.

Not necessarily.

However, we you know, we're we're we're we're comping a transition year. So we we build. We always build plans to achieve those. Those objectives. What I meant is that as you just said, it's not going to happen.

That's what, that's what I that's what I was, I meant. Yeah. So we our our targets are medium to long term, they're annual targets over, medium long-term uh perspective,

But not in q1. It's going to be a gradual Improvement in profitability as we expected. So there's no, there's no change in our in our, in our perspectives.

Perfect. Just want to make that clear. Okay? Um the e-commerce growth, uh, is still pretty elevated at 28% and I know you you, you mentioned, clicking collect, uh,

Roll out.

Man. Can you can you kind of break down or rank the the growth in terms of third-party apps versus Metro online delivery?

Versus click and collect.

Is due to increased capacity.

So, as you know, we've had a prudent approach to uh, the deployment of our e-com strategy. So we're continuing to deploy. So part of the growth,

in our, in our own store as we finalize the

Third party uh has a contributed to that growth uh as well. Consumers in the market are looking for immediacy. So express, delivery, within 2 hours.

Super C and continue to deploy in Ontario.

And the Partnerships that we have with uh with multiple third parties, allowing us to capture that growth in both discount and conventional.

And then you're on online delivery business. Is that, uh, is that kind of flatter then,

No, it's growing as well, uh, slower than uh, than the express delivery and click and collect but it has been growing as well.

Yet. Uh, and you know, is there a year-over-year earnings headwind again? Uh, next year or are we starting to see that come down?

Okay. And then as a as this continues to grow, are you seeing your margins improved?

Well, we've been able to manage our Ecom growth as part of the overall business and it has not impacted overall margin or earnings. Uh, as I said,

Our, our capital investment in e-com has been prudent over the years, and we've been able to manage that as part of our regular business.

Is, I'm not.

I'm not actually clear on that. So I know margins gross margins can be good on the e-commerce but from a net margin or net profit standpoint.

Are you saying that you're not seeing any?

Any negative impact? It's not losing money. So it's dilutive. It's dilutive in the sense that Ecom is less profitable than our brick and mortar business.

what I'm saying is that we've been able to manage that as part of our overall business,

Because of our approach.

With, with our approach with multiple platform, overall Ecom is profitable at Metro.

Uh, but for sure it's uh, it's not as profitable as our brick and mortar business.

and just finally, I guess from Francois, uh,

Great, that's helpful.

And interest numbers in Q4, are a good run rates going forward.

With the supply chain transformation. Mostly complete here. Uh, would you say that the depreciation?

Uh well you should expect a depreciation expense going forward.

To, to have increases, uh, normal increases that you've seen pre, uh, pre those big Investments. So, you know, we always, we always invest in our business retail and, and, and, and distribution not to the knot.

To the level that we did in the last few years. So you you should expect a more normal depreciation, increase year-over-year not not nothing like you saw this year and in

Address again.

as we comp, that lower capitalized interest,

Expense will.

Again.

More in line with.

The past the past.

Past years.

Obviously reflecting reflecting the current environment of rates and and and, and the current level of of debt. But yes, you you should, you should go back to to to more normal.

Increases pre 24.

Great. Thanks very much. Yep.

BC, please go ahead.

Thank you. Next question, will be from Marc Petri at C.

Overlapping a weaker period which is impacted by, uh, by the strike. So it was maybe somewhat surprising to not see, more of a bounce back. And you know, if you look historically Q4, typically

Yeah, thanks uh good morning. I I I did want to just follow up on the comments with regards to the gross margin rate. Um as you noted.

These bigger jump from Q3 just, you know, with seasonality, uh, then what we saw this year? So is it fair to say this is just noise, given the continued impact of

Of of ramping up the the DC Investments or are there some external factors that might have shifted somewhat that were affecting that rate?

No, I wouldn't say that there a different external factors. It's, it's, it's, it's our merchandising, it's our mix. And, uh, like I said earlier, the number came,

In.

Is tonnage.

uh uh uh, at a level that we, we expected and planned for and we're happy with our overall, Topline performance, gross margin performance and bottom line performance with

so,

We're pleased with that performance.

On on the square footage growth. Um, you know, the 1 and a half percent for fiscal 24 and food. I mean, that's the highest in in several years. I mean, is it just fair to character?

Yeah, yeah, understood. Okay. Thank you.

that is essentially a response to the population growth that you've seen in your markets and how would you quantify, you know, fiscal 25 or even fiscal 26 when it comes to

Of the general expectations for for square footage growth.

So it's a good observation. Yes, it's a little higher, maybe some some catching up.

Versus previous years but we see we where we open stores is because we see a good opportunity. There's been population growth, there's shift in populations to certain areas or certain towns or certain neighborhoods.

so, uh,

And try to capture that that growth either by relocating stores expanding stores or building new ones.

Increase of this year in square footage. We expect about the same next year. With the Dozen discount stores that I talked about, um, and we see good opportunities uh in discount.

So that resulted in

Mostly in both provinces, we see opportunities for us to expand our Network. Grow, our market share, and grow our tonnage. Food Basics in Ontario, is doing really well, and has been on on a very good run for, for a few years. Capturing, share, and we see more opportunities, same with superc.

To sort of, you know, location, whether it be Urban.

Is there any particular SKU to that with regard?

Rural suburban, uh, or is it all pretty consistent with with the network? Is there is there is there sort of a, a piece of that?

You feel like you might be under representative and you see somewhat more of an opportunity or is it pretty balanced?

It's really marketed by market, we're balanced, there's some some uh, Urban Suburban rural, there's opportunities, uh, in in our markets, uh, in in, in all of these. Uh, um,

Market, uh, opportunities. So, again, for competitive reasons, we're going to, we're not going to Telegraph our plan here. But we, we see opportunities for growth and we, uh, we intend

We have a plan to deliver on it.

Yeah, understood. Okay, thanks very much. For all the comments all the best.

Thank you. Thank you.

Shouldn't be from Chrissy at the Jade. Please go ahead.

Next question.

Hi, good morning everyone. Um, just maybe a follow up on the, the outlook for for fiscal 2025.

I was wondering if you can, please provide us with just a high level.

And actually just just directionally how we should be thinking about those 3 items as we try to model.

thoughts on a few of the drivers so you know your thoughts on on inflation and also your thoughts on, on gross margin

The um, the growth for next year. Thank you.

That normal level if you will around the 2% level, that's uh, that's what we see now. Uh, so we don't see a we don't see a zero or a deflationary environment

well, I'm not going to get, we're not going to give an outlook on gross margin and Chris, but uh, as far as inflation we I think we mentioned that before we we we we we see inflation at a, you know, at a

Environment. We still we we think there's still some pressure in the system that we that's what we called it but so it'll be you know,

Or regular environment on that front. But I I won't comment on, on on on ghost margin we we you know, gross margin is is based on our merchandising the the the the mix.

to a

so,

Um, we'll give, we'll give caller as we as we report on our results.

Okay, now that's that's right. I just maybe just follow up on the gross margin, Maybe.

not any numerical guidance but just yeah if you can walk us through some of the the major drivers be positive or negative, that will impact your margin, I'm thinking like like shrink Improvement, you mentioned makes

supply chain modernization like just maybe a few drivers that we should be considering

for next year.

It, it's all of those. It's all of those. Uh, we're always looking

To improve our shrink. There's opportunities there, and always, but it's good execution, it's good merchandising, uh, to get to, to the margin level, that we need, uh, to to get deliver value to our customers number 1, and to provide returns to our shareholders. So we have experienced teams, both in store and on the merchandising side.

To deliver a program and I think our track record speaks for itself.

Okay, so thanks for that. And then um, just given your increase in your ncib for next year. Do you expect

to include sufficient, free cash flow to fully fund the BuyBacks and dividends, or to Envision, you know, taking advantage of your strong, balance sheet and and, and taking on some make sure that to fund the increase in the

Share BuyBacks.

Well, we, we said that given the big supply chain Investments that we had, uh, you know, our leverage, uh, was was, was lower.

And then the normal levels. So there's definitely room to, uh, to increase leverage somewhat. I'm like, we're not going to. But so that's why, you know, given that big investment behind us, we decided to, uh, to increase, uh, the, the, the share buyback. And, you know, we, we have, we have, we have sufficient free, cash flow to fund, our capex and dividends, and

And the buyback will be at a level based on where we want to, we want to leverage to be. So it's it's for us to its for us to manage, but there's, there's obviously no change in in our ability to generate sufficient free cash flow.

To fund to fund our growth.

Here and just ask maybe, just on a 1 time basis. Can you share with us? What is the split in Pharmacy and food for on a iPad basis? For Metro? You're right, you are already know we're not going to

Gotcha. Okay. And then um, thanks also for the um, incremental Revenue disclosures between food and pharmacie. I'm just going to be greedy.

Okay, no, no worries. I thought I would try but but but seriously like if I look at just your response Revenue growth, if I just do the back of the envelope math, you know, I think.

It's kind of grown around 78% kegger for the last 6 years versus 1 1. Jungle 2 was still public, I know Bernay was probably in there so it's that boosted growth a little bit but I'm just wondering

Like if as you look for it, um, you know, is that high single digit?

Pharmacie Revenue growth, sustainable going forward.

Strong, strong strong market, share a great Network 2, great banners, we cover the market. Well and uh, it's a market, uh, you know, with the demographics that uh,

Again we don't give guidance like that, but uh we we see we see growth in pharmacie for the reasons. We've explained many times we have uh uh,

Capture that growth. So yeah, we have confidence in our in our growth opportunities, in food, food and Pharma

long-term favor, uh, or, you know, position is well, pharmacie is, well, positioned in the market, like the province of Quebec and our Banners are, are well positioned to, uh,

The the only point of reference I can give you.

I went around and I you know we we were at we were at about 8% of our total revenues, what was Pharmacy? And that was basically bu so uh and now you see, you see. So obviously we, you know, are exported

Constitution transaction.

Pharmacie, uh, obviously as as increased significantly with the with the acquisition. But that's, that's from the, the the starting point was 8%.

Question, just on, maybe on pharmacie again, taking a longer term outlook on the industry. You know, besides 1 Bill 168 and you know, specialty drugs still growing very fast. As you look out to the industry.

Gotcha. Okay, that and the last

The next 2 or 3 years. All right. Are there other, you know, regulatory developments or trends that you are closely monitoring that could potentially impact um, sort of the growth of the business

Over the longer term.

Legal Services. Uh,

that's really where all the stakeholders.

Uh, I I could take the lead on that good morning, Chris. So obviously in Quebec the, the big shift in in the big transformation in

Different uh, approach to pharmacare. Um, so right now, when we look 2, 3 years out, uh really the focus is is making sure we maximize uh, the delivery of

Are are focusing on. Um, obviously we, you know, pharmacare is something that everyone's talking about, in Quebec, they're taking a little bit of a

Google services within within our networks, that that's really where all the the um,

The stakeholders are are are heading um, and other than that there's nothing.

that that we for that we see, as we look ahead and and start planning and and plan, uh, growth in our business,

Truly significant.

It's going to open up more Clinical Services to be performed in pharmacie as you know. So the pharmacists today are performing uh many Clinical Services

But still 67 is a major change.

Uh, they will be performing more of them over time. So uh, again like I said, in the, in the opening statement, uh, we're we're capturing Clinical Services and we expect to capture

Deliver more, um, in the years ahead.

Perfect. Thanks and all the best for the holiday season.

Thank you. Thank you, Chris.

As a reminder, ladies and Gentlemen, please press star 1. If you have any questions,

Next, we will hear from John's Emperor at Scotia Bank. Please go ahead.

Thank you. Good morning. I wanted to come back to a couple topics uh that we discussed previously. Maybe we could start with with loyalty and and the MUA launch in Ontario, I think.

you're seeing 5 times greater spending from Members than than not, are there any other insights that you have um, immediately after customers have signed up particularly on

On frequency or or basket size and and is there any incremental investment? We should be aware of from from Metro launching this program.

well, so

First part of your question, uh, referring to 5 times. So what we're saying is that consumers that are shopping, multiple Banners are

5 times more than members, that are shopping only 1 Banner, which uh, really highlights the fact that the program allows us to capture more basket more.

Spending in Quebec.

From Shoppers across all of our banners Pharma and food in Quebec.

Uh, the bigger their basket uh within 1 banner and and that's driving incremental, value incremental customer value.

uh, the the the members and the more loyal, the members are

Related to further investment in our program. Uh, the big, the the first part of the investment was the launch in Quebec, then the launching of Ontario will continue to invest in

um, the third part of your question was

Improving uh functionality of the program as as we have been over the last 10 years with the Metro Mo program in Quebec. Uh but it won't be uh, a significant

As the investment we have made in the launch in Quebec and Ontario. Hopefully I answered a question.

Uh, launching Ontario following the Quebec launch. Is there anything in particular you learned from the Quebec? Launch that. That's informed. Your Ontario strategy that you're willing to share.

Yes, that's that's helpful. Thank you. Um, and I wonder when you think about

Uh, in our conventional Banner Metro base Point, uh, for PE for consumers, when they shop in our stores. So when you spend a dollar in our store, uh, 3 dollars in our store, you get

Well, you saw the the how we decided to tweak the program to be more adapted to the Ontario market. So we're the only program in the province in Ontario that offers

Point and consumers are reacting well to that because they feel rewarded on their loyalty on their regular shopping. So we've adapted the program. We wanted the program to

To be uh a little bit more promotional in the Ontario environment uh allowing us to to compete with loyalty. A mix of our loyalty program and our commercial program.

Case it has a particularly on the third-party side and that becomes more relevant to your results. Would you consider taking higher pricing on certain party orders?

Okay, got it. Um, I want to move to Ecom. It's still pretty healthy growth in that part of the business. I wonder if that if that continues to grow

To the point where that basically not be March and diluted.

In our e-com strategy, uh same prices as in store for our own services and Marketplace. Uh we're going to Market with an unique channel strategy where we want consumers.

obviously for competitive reason, we won't talk about our pricing strategy, but our strategy has been to offer

To have the same experience with the brand in store and online.

Boiled in our stores, and we're seeing the overall customer value increase.

And it's paying off consumers uh that are shopping online. Uh are more engaged and more.

Uh, so for now that's been our strategy.

And then my last 1 is on the buyback. I I want to get a sense of the appetite.

Got it, okay.

Share price dependent or do you anticipate? You'll you'll hit the maximum number.

To hit the maximum level. Um, the the comments previously on on Leverage are helpful, but is the Buy

It's not a, we don't, it's not an obligation to do 10 million. So, but we feel that with the lower capex environment now that the big supply chain Investments are behind us. Uh, when we look at,

Well, it's it's it's a it's an amount that we can we can do up to. So it's not like

The capital allocation uh we felt that uh we it was time to to to to to go for a higher amount.

um,

So we'll see. Obviously, we always see.

The year progresses. But that's that's that's the plan is to do more more BuyBacks and we did this

This year.

Um, again, the capital allocation has not changed, it's it's our first priority is is capex. So

if for some reason, we see more capex opportunities and then

is kind of the last, the last portion of that Capital location, if if we're in an excess cash position and we don't see

The first priority and then dividends, of course uh that that that, that our policy continues. No change. So to buy back.

A good project, we return. The cash through BuyBacks. We find that the most efficient way, then to return cash, the excess cash to shareholders. So,

Uh, uh, you know, immediate uh, or short.

that's how we view the capital allocation and we

More room for buy box and then we did. Um and and and in 24

Got it. That's all for me. Appreciate the comments. Thank you. Thank you John.

And at this time she Kadesh we have no other questions, please proceed.

For our first.

328, thank you.

Connect your lines.

Thank you, ladies and gentlemen. This does indeed include your conference call for today. Once again, thank you for attending at this time. We ask that you please