Q2 2025 Alimentation Couche-Tard Inc Earnings Call
Good morning, my name is Joelle and I will be your conference operator today. Bonjour, je m'appelle Joelle et je serai votre paire de kiss pour la conférence d'aujourd'hui.
Good morning, My name is joelle and that will be your conference. Operator today I also have my parents or what is your so how about some push outs just select comfort house Deutsche I'm, sorry, I will now introduce Mr. Metz, you Burnett, Vice President Investor Relations and Treasury at any my touch all crashed off do you have it may not pass it up I heard I missed you match it.
I will now introduce Mr. Mathieu Bruner, Vice President in Vassier Relations and Treasury at Alim attation Couche-Tard. Je vais maintenant penser la parole à monsieur Mathieu Bruner, vice-président, relation investisseur et réserveurélie pour alimentation Couche-Tard.
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Speaker Change: Hello, I would first like to welcome you to the conference call regarding the release of the financial results for the second quarter of the 2025 fiscal year of Alimentation Couche-Tard. All lines will be placed in mute mode to avoid any unnecessary noise. Following the presentation, we will answer analysts' questions live. We would like to remind you that this webcast will be available on our website for a period of 90 days.
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Speaker Change: Furthermore, please note that some of the topics discussed during this webcast may consist of forward-looking statements provided by the company with the usual disclaimers. These disclaimers or risks, as well as these uncertainties, are described in our financial reports. It is therefore possible that our future results may differ from the information presented today. The financial results will be presented by Mr. Alex Miller, President and CEO .
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Speaker Change: and Mr. Philippe de Silva, Chief of the Financial Direction.
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Speaker Change: Good morning. I would like to welcome everyone to this web conference presenting Alim Couche-Tard's Financial Results for the second quarter of fiscal year 2025. All lines will be kept on mute to prevent any background noise. After the presentation, we will answer questions from our list of lives during the web conference.
Speaker Change: Good morning, I would like to welcome everyone to this web conference presenting any month that some pushed out financial results for the second quarter of fiscal year 2025.
Speaker Change: All lines will be kept on mute to prevent any background noise. After the presentation. We will answer questions from analysts ask live during the web conference.
Speaker Change: We would like to remind everyone that if this webcast presentation will be available on our website for a 90-day period.
To remind everyone that this webcast presentation will be available on our website for a 90 day period.
Speaker Change: Also, please remember that some of the issues discussed during this webcast might be forward looking statements which are provided by the corporation with its usual caveats. These caveats are risks and uncertainties are outlined in our financial reporting. Therefore, our future results could differ from the information discussed today.
Speaker Change: Also please remember that some of the issues discussed during this webcast may be forward looking statements, which are provided by the corporation with its usual caveats. These.
Speaker Change: These caveats are risks.
Speaker Change: Certainties are outlined in our financial reporting therefore, our future results could differ from the information discussed today.
Speaker Change: Our financial results will be presented by Mr. Alex Miller, President and Chief Executive Officer, and Mr. Philippe de Silva, Chief Financial Officer. Alex, you may begin your conference.
Speaker Change: Our financial results will be presented by Mr. Alex Miller, President and Chief Executive Officer, and Mr. Philippe de Silva Chief Financial Officer.
Speaker Change: Alex you May begin your conference.
Alex Miller: Thank you, Matthew. Good morning, everyone. And thank you for joining us for our presentation of our second quarter result.
Alex Miller: Thank you Matthew good morning, everyone and thank you for joining us for our presentation of our second quarter results.
Alex Miller: While parts of our convenience and fuel business continue to be challenged this quarter, as consumers carefully watch their spending, we remain confident in the advantages of our globally diversified network and long term strategic growth plan. In our European markets, most categories perform positively as did fuel volumes in Europe and Canada.
Alex Miller: While parts of our convenience and fuel business continued to be challenged this quarter as consumers carefully watch their spending we remain confident in the advantages of our globally diversified network and long term strategic growth plan.
Alex Miller: In our European markets, most categories performed positively as did fuel volumes in Europe and Canada.
Alex Miller: Fuel margins also remain healthy across the network.
Alex Miller: Fuel margins also remained healthy across the network.
Alex Miller: Throughout the quarter, we focused relentlessly on providing value to our customers, including introducing bundle meal deals in the US, expanding our private brand offer at affordable price points.
Alex Miller: The quarter, we focused relentlessly on providing value to our customers, including introducing bundled meal deals in the U S expanding our private brand offer at affordable price points.
Alex Miller: and continuing popular fuel day promotion.
Alex Miller: And continuing popular fuel day promotions.
Alex Miller: Later in this presentation, I will go into more detail on these initiatives as well as on our convenience and mobility results.
Alex Miller: Later in this presentation I will go into more detail on these initiatives as well as on our convenience and mobility results.
Alex Miller: However, before I do so, I will touch on two notable areas of the quarter. The catastrophic hurricanes in the U.S. and our global efforts to grow the network, both through M&A and organic.
However, before I do so I will touch on two notable areas areas of the quarter the catastrophic hurricanes in the U S and our global efforts to grow the network, both through M&A and organically.
Alex Miller: I want to start off by acknowledging the heroic work of our teams across the southeastern U.S., who had to contend with two major hurricanes, Hurricane Helene and Hurricane Milton, which impacted four of our business units within two weeks of each other. The hurricane shut down hundreds of our stores, mainly due to power loss, but thanks to the extraordinary efforts of our operations, fuel, facilities, and logistics teams, we were able to open all but a handful of them within a few days. Make sure all our team members were safe and provide our communities with essential goods and service.
Alex Miller: I wanted to start off by acknowledging the heroic work of our teams across the southeastern U S who had to contend with two major hurricanes Hurricanes, Helene and Hurricane Knowlton, which impacted four of our business units within two weeks of each other the hurricane shutdown hundreds of our stores, mainly due to power loss.
Alex Miller: But thanks to the extraordinary effort of our operations fuel facilities and logistics teams, we were able to open all but a handful of them within a few days make sure all our team members were safe and provide our communities with essential goods and services.
Alex Miller: This took massive coordination and outstanding dedication by thousands of team members and I could not be more proud of how as one team they helped each other and our customers in community.
Alex Miller: This took massive coordination and outstanding dedication by thousands of team members and I could not be more proud of how as one team they helped each other and our customers and communities.
Alex Miller: I also want to briefly mention our ongoing commitment to acquire seven and I holdings. No doubt, you have seen much in the media about our most recent proposal to purchase the entire business, as well as our visit to Japan to learn more about its store operations and to meet with key stakeholders.
I also want to briefly mention our ongoing commitment to acquire <unk> holdings no doubt you have seen much in the media about our most recent proposal to purchase the entire business.
Alex Miller: As well as our visit to Japan to learn more about store operations and to meet with key stakeholders.
Alex Miller: We continue to see a strong opportunity to grow together and enhance our offerings and serve us to millions of customers across the globe.
Alex Miller: We continue to see a strong opportunity to grow together and enhance our offerings and service to millions of customers across the globe.
Alex Miller: We also remain confident in our ability to finance and complete this combination.
Alex Miller: We also remain confident in our ability to finance and complete this combination.
Alex Miller: We will be persistent and continue our friendly approach to creating what we see as the most compelling outcome for all shareholders, employees and key constituencies of both companies.
Alex Miller: We will be persistent and continue our friendly approach to creating what we see as the most compelling outcome for all shareholders employees and key constituent constituencies of both companies.
Alex Miller: While discussing M&A, let me briefly mention the good progress we are making with Gekko, which we expect to close in calendar 2025. I and members of the executive team spend a very productive few days with the Gekko management and employees in September , visiting stores and facilities. We are excited about our early learnings about Gekko's extremely popular food and loyalty programs and dedicated team members.
Alex Miller: While discussing M&A, let me briefly mentioned the good progress we are making with gecko, which we expect to close in calendar 2025.
Alex Miller: I and members of the executive team spent a very productive few days with the get go management and employees in September visiting stores and facilities. We are excited about our early learnings about get goes extremely popular food and loyalty programs.
Alex Miller: And dedicated team members.
Alex Miller: We also recently completed a small tuck-in purchase agreement in the US with 20 stores in Oklahoma and Kansas, bringing our circle cave presence back to these two states.
Alex Miller: We also recently completed a small tuck in purchase agreement in the U S with 20 stores in Oklahoma, and Kansas, bringing our circle K presence back to these two states.
Alex Miller: Moving to Europe , we are pleased with the ongoing work with our four new business units as they successfully transition out of a complex carve out with total energies. The teams are highly energized and engaged and are making good progress with store rebranding and integration plans.
Alex Miller: Moving to Europe, we are pleased with the ongoing work with our four new business units as they successfully transitioned out of a complex carve out with total energies. The teams are highly energized and engaged and are making good progress with store rebranding and integration plans.
Alex Miller: In organic growth, we continue to make strong strides on our 500 new store build goal. We open 14 stores this quarter and we are on track to open over 100 in North America this fiscal year.
Inorganic growth, we continue to make strong strides on our 500, new store build goal. We opened 14 stores this quarter and we are on track to open over 100 in North America This fiscal year.
Alex Miller: As part of our strategic growth ambition, our new stores include dozens of high-speed diesel and rural locations.
Alex Miller: That's part of our strategic growth ambition or new stores include dozens of high speed diesel and rural locations.
Alex Miller: Now let me get back to our quarterly results starting with convenience.
Alex Miller: Now, let me get back to our quarterly results starting with convenience.
Alex Miller: We paraded the same quarter last year, same-store merchandise revenues decreased by 1.6% in the United States, by 1.5% in Europe and other regions, and by 2.3% in Canada.
Alex Miller: Compared to the same quarter last year same store merchandise revenues decreased by one 6% in the United States by.
Alex Miller: By one 5% in Europe, and other regions and by two 3% in Canada.
Alex Miller: As I mentioned earlier, in our European businesses, most categories perform positively with same-store sales increasing by 1.8%.
Alex Miller: As I mentioned earlier and our European businesses, most categories performed positively with same store sales increasing by one 8%.
Alex Miller: However, the overall Europe and other region results were again impacted by weak results in our Hong Kong market, driven by decreases in cigarette units and increased sales
However, the overall Europe in other region results were again impacted by weak results in our Hong Kong market driven by a decrease in cigarette units and increased sales taxes.
Alex Miller: Again, this quarter, as challenging inflationary conditions persisted, we have been relentlessly focused on providing customers with value, both inside our stores and on our four courts. In October , in the US, we launched our $3, $4 and $5 meal deals. We are encouraged by early results. After only six weeks, over 300,000 meals are being sold on a weekly basis, accelerating traffic and unit growth.
Alex Miller: Again, this quarter as challenging inflationary conditions persisted, we have been relentlessly focused on providing customers with value both inside our stores and on our four cohorts in October in the U S. We launched our $3 $4 and $5 meal deals.
We are encouraged by early results after only six weeks over 300000 meals are being sold on a weekly basis accelerating traffic and unit growth while.
Alex Miller: While meal deals have become common in QSRs, we can differentiate ourselves through partnerships with our suppliers by offering a variety of options including energy drinks and chips that are not available at QSR.
Alex Miller: While meal deals have become common in <unk>, we can differentiate ourselves through partnerships with our suppliers by offering a variety of options, including energy drinks and chips that are not available at <unk>.
Alex Miller: We are also providing value through an expanding array of private label products which are increasingly popular with customers looking for savings but still wanting good quality and taste.
Alex Miller: We are also providing value through an expanding array of private label products, which are increasingly popular with customers looking for savings, but still wanting good quality and taste.
Alex Miller: Private label was growing for us in the high single digits across the network and we are looking to add over 100 private label products this year.
Alex Miller: Divot label is growing for us in the high single digits across the network and we are looking to add over 100 private label products. This year.
Alex Miller: Reoccurring fuel days continue to provide value to our customers at the pump while also driving traffic to our locations. Last week, we had about 5,000 locations across the U.S. participating in a Circle K fuel day, offering a Thanksgiving discount of up to 40 cents per gallon.
Alex Miller: Reoccurring fuel days continue to provide value to our customers at the pump while also driving traffic to our locations.
Last week, we had about 5000 locations across the U S participating in the circle K fuel day offering of Thanksgiving discount of up to <unk> 40 per gallon with.
Alex Miller: With the holidays being full of busy celebrations and costs, we are proud to offer our customers a meaningful way to say.
Alex Miller: With the holidays being fuller busy celebrations in cost we are proud to offer our customers a meaningful way to save.
Alex Miller: This quarter, we also grew our loyalty membership programs in the US and Europe . In the US, inner circle registrations and full enrollments reached 8.3 million fully enrolled customers representing a 12% increase from the previous quarter. We continue to see a sales lift through increased personalization, making a key focus of the team. And in the coming quarters, we are committed to simplifying our sign-up process to drive even greater sign-up conversions.
Alex Miller: This quarter. We also grew our loyalty membership programs in the U S and Europe in the U S. Inner circle registrations in full enrollments reached $8 3 million fully enrolled customers, representing a 12% increase from the previous quarter. We continue to see a sales lift through increased personalization, making a key.
Alex Miller: Focus of the team and in the coming quarters, we are committed to simplifying our sign up process to drive even greater sign up conversion.
Alex Miller: We are also linking our Easy Pay Fuel Program with Inner Circle to unlock additional benefits to our customers and provide a more frictionless single-card experience.
Alex Miller: We're also linking our easy pay fuel program with inner circle to unlock additional benefits to our customers and provide a more frictionless single card experience.
Alex Miller: In Europe , active members in our extra program have also increased, particularly in our Scandinavian markets, where we have integrated more closely with our strong EV charging business. In Sweden, the recently launched Extra 2.0 pilot is seeing a lift in both traffic and increased margin, and we are planning to scale it across Sweden and additional countries in Europe .
Alex Miller: In Europe active members in our extra program have also increased particularly particularly in our Scandinavian markets, where we have integrated more closely with our strong EV charging business in Sweden. The recently launched extra 2.0 pilot is seeing a lift in both traffic and increased margin and we are planning to ski.
Alex Miller: Across Sweden, and additional countries in Europe.
Alex Miller: In the United States, our popular winter beer campaign continued until the start of this quarantine. While the beer provided exceptional flavors and exciting and exclusive tastes, which lead to the growth of the unit and the dispensing of beers, the compelling value once again compressed the margins this quarantine.
Alex Miller: In the U S. Our popular summer beverage campaign continued into the beginning of this quarter, while it provided exceptional value and exciting exclusive flavors, leading to unit growth and dispense beverages. The compelling value did once again compressed margins this quarter.
Alex Miller: In the adult beverage category, we experienced continued momentum with sales slightly down compared to the prior year while unit velocity showed growth. This performance reflected on-going efforts to drive value through singles and capitalized on favorable industry trends, particularly growing customer enthusiasm for Mexican imports.
In the adult beverage category, we experienced continued momentum with sales slightly down compared to the prior year, while unit velocity showed growth this performance.
Alex Miller: <unk> reflected ongoing efforts to drive value through singles and capitalized on favorable industry trends.
Alex Miller: Particularly particularly growing customer enthusiasm for Mexican imports.
Alex Miller: Starting at the beginning of the quarter, following a change in legislation in Ontario, Canada's largest market, we have been able to offer a selection of beer, cider, wine, and ready to drink alcoholic beverages in our eligible stores. To take full advantage of this opportunity, our team carefully allocated the proper space and a timely manner. We now command an impressive market leadership in beer sales in Ontario.
Alex Miller: Starting at the beginning of the quarter following a change in legislation legislation in Ontario, Canada's largest market, we have been able to offer a selection of beer cider wine and ready to drink alcoholic beverages in our eligible stores.
Alex Miller: To take full advantage of this opportunity our team carefully allocated the proper space in a timely manner, we know command and impressive market leadership in beer sales in Ontario.
Alex Miller: In cigarette sticks, we are seeing some stabilization in the US and we continue to outperform our competitive peer group. This is partially due to our price optimization efforts along with taking advantage of our scale to expand our portfolio of affordable products in a profitable manner.
Alex Miller: In cigarette sticks, we are seeing some stabilization in the U S and we continue to outperform our competitive peer group. This is partially due to our price optimization efforts along with taking advantage of our scale to expand our portfolio of affordable products in a profitable manner.
Alex Miller: We also continued personalization programs for our age-barified cuss.
Alex Miller: We also continued personalization programs for our age verified customers.
Alex Miller: In other nicotine products, strong growth continues across the US and Europe .
Alex Miller: And other nicotine products strong growth continues across the U S and Europe.
Alex Miller: Moving to our fuel business, same-store road transportation fuel volumes decreased by 2.2% in the United States, impacted by lower industry demand and those two major hurricanes, while it increased by 1% in Europe and other regions, and by 0.1% in Europe and in other regions, and by 0.5% in Canada.
Alex Miller: Moving to our fuel business same store road transportation fuel volumes decreased by two 2% in the United States impacted by lower industry demand in those two major hurricanes, while it increased by 1% in Europe, and other regions and by 5% or excuse me, 0.1% in euro.
And in other regions and by 0.5% and Canada.
Alex Miller: As I mentioned earlier, our fuel margins remain healthy across the network as we continue to work on building value from our fuel supply chain and serving our customers through lower cost sourcing options.
Alex Miller: As I mentioned earlier, our fuel margins remained healthy across the network as we continue to work on building value from our fuel supply chain and serving our customers through lower cost sourcing options.
Alex Miller: Are Europe B2B fuel business had a solid second quarter with overall card volume slightly ahead of prior year? The truck segment is showing resilience and maintaining national volumes in the legacy business units while international volumes have seen strong growth driven by changes in bio rates and Sweden and early wins in the new mid-European market?
Alex Miller: Our Europe <unk> business had a solid second quarter with overall card volume slightly ahead of prior year.
Alex Miller: The truck segment is showing resilience and maintaining national volumes in the legacy business units, while international volumes have seen strong growth driven by changes in bio rates in Sweden and early wins in the new mid European markets.
Alex Miller: In fleet, we continue to focus on developing our customer portfolio.
Alex Miller: In fleet, we continued to focus on developing our customer portfolio.
Alex Miller: The B2B fuel share in the U.S. continues to grow quarter over quarter as we develop customer relationships with fleets of all sizes. Enhance the B2B driver experience through specific B2B driver benefits on inner circle and expand our reach by developing and implementing strategic partnerships.
Alex Miller: The BTB fuel share in the U S continues to grow quarter over quarter as we develop customer relationships with fleets of all sizes enhanced the <unk> driver experience through specific BTB driver benefits on inner circle and expand our reach by developing and implementing strategic partnerships.
Alex Miller: REV Fast Charging Network in Europe now consists of over 2900 charge points. We had a 65% increase on transactions on Circle K branded transit chargers from the same period last year. Driven both by networking, expansion, and improved utilization.
Alex Miller: Our EV fast charging network in Europe now consists of over 2900 charge points, we had a 65% increase on transactions on circle K branded transit Chargers from the same period last year.
Alex Miller: Driven both by networking expansion and improved utilization.
Alex Miller: We also continue to expand the charging network in the mid-European markets as well as in Ireland.
Alex Miller: We also continue to expand the charging network in the mid European markets as well as in Ireland.
Alex Miller: In North America, we continued with a discipline approach to network expansion.
Alex Miller: In North America, we continued with a disciplined approach to network expansion.
Alex Miller: I also want to mention some of the work that we are doing to improve operational excellence. Reinforcing our approach as a low cost operator. In North America, reducing shrink is an important focus for us. And we are bringing in prevention technology as well as strategic vendor partnerships that can assist in identifying shrink the historic surveillance system.
Alex Miller: I also want to mention some of the work that we're doing to improve operational excellence reinforcing our approach as a low cost operator.
Alex Miller: In North America, reducing shrink is an important focus for us and we are bringing in prevention technology as well as strategic vendor partnerships that can assist in identifying shrink via stores surveillance systems. We are also looking to expand our gig worker partnership to improve our food program execution and grow our sale.
Alex Miller: We are also looking to expand our gig worker partnership to improve our food program execution and grow our sales.
Alex Miller: Yes.
Speaker Change: Felipe will provide additional color on our cost management, including our fit to serve initiative.
Speaker Change: Philippe will provide additional color on our cost management, including our fit to serve initiatives.
Speaker Change: Coming back to where I started, fully recognizing the continued strain on our customers' discretionary spending. I'm pleased with the many ways we are providing meaningful value while keeping our focus on driving traffic to our locations. We remain confident in the strength of our globally diversified network and long-term strategy and are encouraged by signs of positive momentum in parts of the business in both convenience and fuel.
Speaker Change: Coming back to where I started fully recognizing the continued strain on our customers' discretionary spending I am pleased with the many ways, we are providing meaningful value, while keeping our focus on driving traffic to our locations. We remain confident in the strength of our globally diversified network and long term strategy.
Speaker Change: And are encouraged by signs of positive momentum in parts of the business and both convenience and fuel.
Philippe: And with that, I'll turn it over to Felipe.
Philippe: And with that I'll turn it over to Philippe.
Philippe: Thank you, Alex. Good morning, everyone.
Philippe: Thank you Alex and good morning, everyone.
Philippe: We've a little over a year in my role at CFO , I've witnessed this resident organization tackle techniques and challenges, from elevated interest rates, high inflationary pressures
Philippe: We are a little over a year in my role as CFO.
Philippe: Weakness this readiness organization that goes significant challenges from elevated interest rates high inflationary pressures.
Philippe: And this will continue to buy challenges impacting our global network.
Philippe: I'm impressed of how we have come together to have overcome some of this hide-wee.
I'm impressed of how we've come together to overcome some of these headwinds.
Philippe: Delivering solidarity groups as we continue to integrate our recent acquisitions and gain market share in key categories.
Philippe: Delivering solid revenue growth as we continue to integrate our recent acquisitions and gain market share in key categories.
Philippe: Throughout the second quarter, we saw sequential monthly improvement, particularly in U.S., same-store merchandise review, and I encourage by this input-positive momentum as we enter the third quarter.
Philippe: Throughout the second quarter, we saw sequential monthly improvement, particularly in U S. Same store merchandise revenue and are encouraged by these inputs and momentum as we enter the third quarter.
Speaker Change: However, as Alex mentioned earlier, it's worth noting that the Euricans affected after from us during the quarter on both our merchandise revenue and food volumes.
Speaker Change: However, as Alex mentioned earlier, it's worth noting that the <unk> I think the doctor from us during the quarter on both arms.
Speaker Change: Merchandise revenue and crude volumes.
Speaker Change: Excluding this impact, we estimate that USA's strong merchandise revenues would have aligned closer to our Q1 release.
Excluding this impact we estimate that U S Gulf merchandise revenues without aligned close up our Q1 results.
Speaker Change: In addition, our focus on operational excellence and discipline cost management The model is 2.3% of normal-like growth in expenses.
Speaker Change: In addition, our focus on operational excellence and disciplined cost management drove a modest two 3% of normalized growth in expenses.
Speaker Change: enabling us to outpace a slowing inflationary environment.
Speaker Change: Enabling us to outpace a slowing in production environment.
Speaker Change: We are also pleased to see impressive results coming from our fee-to-serve inshets.
Speaker Change: We are also pleased to see increased results from our <unk>.
Speaker Change: further enhancing our world-class cost-culture and efficient approach to spend it.
Speaker Change: Further enhancing our world class cost coaster and efficient approach to spending.
Speaker Change: More specifically, we continue to leverage our side and scale, and that's how we've gone.
Speaker Change: More specifically, we continue to leverage our size and scale and that's what we've done.
Speaker Change: approach to optimize costs across our network and scope operations as we continue to invest in technology. We seem to use more efficient marketing, repair, maintenance, and really
Speaker Change: Approach.
Speaker Change: Of course.
Speaker Change: Across our network Ensco operations as we continue to invest in technology.
This includes more efficient marketing.
Speaker Change: Bend and renegotiating financial fees.
Speaker Change: With regard to our store operations, we continue to improve labour management and reducing utility consumption while advancing our global capability net.
Speaker Change: With regard to our store operations, we continued to improve labor management and would you see equal section, while I've been seeing a global capability networks all.
Speaker Change: All of these initiatives are contributing to improved operational efficiency.
Speaker Change: All of these initiatives are contributing to improved operational efficiency.
Speaker Change: We now go over some key figures for the butter. For more details, please refer to our MDNA available on our website.
Speaker Change: I will now go over some key figures for the quarter for more details. Please refer to our MD&A available on our website.
Speaker Change: Right.
Speaker Change: For the second quarter of fiscal 2025, net earnings attributable to shareholders of a corporation where nearly $7.9 million or 75 cents per share on a daily basis.
Speaker Change: While the second quarter of fiscal 2025 net earnings attributable to shareholders of the corporation were nearly $7 9 million or 75 per share on a diluted basis.
Speaker Change: Excluding certain items described in more detail in our MDNA, adjusted net earnings attributable to shareholders of the corporation were approximately $705 million or 74 cents per share on an adjusted diluted basis, representing a decrease of 9.8% compared with the corresponding water of last.
Speaker Change: Excluding certain items described in more detail in our MD&A.
Speaker Change: Adjusted net earnings attributable to shareholders of the corporation were approximately $7 5 million or.
Speaker Change: <unk> 74 per share on an adjusted diluted basis, representing a decrease of nine 8% compared with the corresponding quarter of last fiscal year.
Speaker Change: During the second quarter, excluding the net impact from foreign currency translation, merchandise and service reviews increased by approximately $172 million or $6.6 percent.
Speaker Change: During the second quarter, excluding the net impact comp.
Speaker Change: And currency translation.
<unk> revenues increased by approximately 72 million or six six.
Speaker Change: <unk>.
Speaker Change: Primary attributable to the protrusion from acquisition which amounted to approximately three hundred and twenty-nine million dollars, partly offset by softness and trust.
Speaker Change: Primarily attributable to the contribution from acquisition, which amounted to approximately $329 million up partly offset by softness in traffic.
Speaker Change: Excluding the net impact from foreign currency translation, merchandise and service gross profit increased by approximately $76 million or $5.3%.
Speaker Change: Excluding the net impact from foreign currency translation merchandise and services gross profit increased by approximately $76 million or five 3%.
Speaker Change: This is primarily due to the contribution from acquisitions which amounted to approximately one of the nine million dollar partly offset by softness interest.
Speaker Change: This is primarily due to the contribution from acquisitions, which amounted to approximately $109 million bucket.
Speaker Change: Partly offset by softness in traffic.
Speaker Change: In the United States, our merchandise and growth margins decreased by 1% to 33.8% impacted by the commercial effort to support our ongoing campaigns. One, it increased by 0.4% in Canada to 33.6%. impacted favorably by a change in product mix. In product.
Speaker Change: In the United States, all merchandising gross <unk> gross margin decreased by 1% to 33, 8% impacted.
Speaker Change: Impacted by the promotional.
Speaker Change: To support our ongoing company, while it increased by <unk>, 4% in Canada to 53, 6% impacted favorably by a change in product mix.
Speaker Change: Bruce.
Speaker Change: In Europe and over regions are metronized and service growth margin decreased by 0.4% to 38.2% impacted by the integration of certain bidet assets from total energy, which are the different product mix than our over operations in Europe and over regions.
Speaker Change: In Europe, and other regions, our merchandise and services gross margin decreased by <unk>, 4% to 58, 2%.
By the integration of certain retail assets from total energy, which have a different product mix, but our over operations in Europe and overreaching.
Speaker Change: Excluding this impact, our growth margin in Europe and over regions with an increase by 2.20%.
Speaker Change: Excluding this impact our gross margin in Europe, and Novo regions would have increased by two 1%.
Speaker Change: Driven by a favorable change in product mix, from lower cigarette revenues in Asia.
Speaker Change: Driven by a favorable change in product mix from lower <unk> in Asia.
Speaker Change: Moving on to the fuel side of our business. In the second quarter of fiscal 2025, excluding the net impact from foreign currency translation, road transportation fuel growth growth increased by approximately $1.28 million or $8.8%.
Speaker Change: Moving on to the food side of our business in the second quarter of fiscal 2025, excluding the net impact from foreign currency translation.
Speaker Change: Petition fuel gross profit increased by approximately $128 million or eight 8%.
Speaker Change: This is mainly attributable to the contribution from acquisition, which amounted to approximately one of the 81 million dollars, including the favorable impact from the range of station of the fuel supply agreement with the vendor, of which 38 million dollars is related to
Speaker Change: This is mainly attributable to the contribution from acquisitions, which amounted to approximately 181 million.
Speaker Change: Including the favorable impact from the renegotiation of the fuel supply agreement with a vendor of which $58 million is related to previous quarters.
Speaker Change: Stuckly off-safe by the decline in world transportation fuel growth margin in the U.S.
Actually offset by the decline in the road transportation to gross margin in the United States.
Speaker Change: Our road to transportation fuel growth margin was 46.1 cents per gallon in the United States. The decrease of 3.46 cents per gallon, the healthy margin in the competitive and well-supplied market environment. And in Canada, it was 13.35 cents canadian per liter.
Speaker Change: Our rule to transportation to gross margin was $46 one <unk>.
Per gallon in the United States, the decrease of $3 46.
Per gallon the healthy margin in a competitive and once you blend market environment and in Canada. It was $13 65 Canadian periods here.
Speaker Change: The decrease of 0.28 cents can add in purely.
The decrease those.
Speaker Change: 28 Canadian per liter.
Speaker Change: In Europe and over regions, it was 10.51 cents US per liter, an increase of 0.31 cents US per liter impacted by the retroactive adjustment which had a favorable impact on local transportation food was margin of 0.888 cents US per liter,
In Europe and over a region. It was $10 <unk>, an increase of 61, <unk> <unk> impacted by the retroactive adjustments, which had a favorable impact on LOE transportation through gross margin of eight eight years.
Speaker Change: 88, <unk>, partially offset by the impact of the change now will save a key piece.
Speaker Change: Now looking at ISGNA for the second quarter of fiscal 2025, normalized operating expenses increased by 2.3% year-over.
Speaker Change: Now looking at SG&A for the second quarter of fiscal 2025 normalized operating expenses increased by two 3% year over year.
Speaker Change: This is mainly driven by impressionary pressures and intolerance for investment to support our strategic interest.
Speaker Change: This is mainly driven by inflationary pressures and interim about EBIT is meant to support our strategic initiatives.
Speaker Change: Tacky of said by the ongoing thought to control our expenses, including labor efficiency enough.
Speaker Change: Partly offset by the ongoing part two controlled occupancy, including labor efficiency in our stores.
Speaker Change: More specifically, we'll reduce store administration through refined protocol and increase back of these automation.
More specifically, we reduced store administration, who refine Coca Cola and increased back office automation.
Speaker Change: U.S. store associates over-time costs were reduced just as we were also achieved in improvements in manager over-time spend in the first half of 2020.
Speaker Change: U S store associates overtime costs were reduced just as we have also achieved an improvement in manager over time spent in the <unk>.
FY 'twenty five.
Speaker Change: Excluding specific items described in more details in our MDNA, the adjusted APDA for the second quarter of fiscal 2025 increased by just over $36 million or 2.4 percent, compared with the corresponding quarter of fiscal 2024, many due to the contribution from acquisitions, which amounted to approximately $158 million, partly offset by lower road transportation fuel growth margin and investment in merchandise and service growth margin in the United States. As well as by the softness, traffic and fuel demand, as though in concursumer, women impacted by challenging economics.
Speaker Change: Excluding specific items described in more detail.
Speaker Change: The adjusted EBITDA for the second quarter of fiscal 2025 increased by just over $36 million or two 4% compared with the corresponding quarter of fiscal 2024, mainly due to the contribution from acquisitions, which amounted to approximately $158 million.
Speaker Change: Partly offset by lower road transportation fuel gross margin and EBIT months in merchandise and services gross margin in the United States as well as by the softness in traffic and true demand as low income consumer women impacted by challenging economic conditions.
Speaker Change: From the tax perspective, the income tax rate for the second quarter of fiscal 2025 was 23.4%. Compared with 22.8% from the corresponding period for fiscal 2024.
Speaker Change: From a tax perspective, the income tax rate for the second quarter of fiscal 2025 was 23, 4% compared with 22, 8% profit corresponding periods for fiscal 2024.
Speaker Change: The increased mainly stems from the impact of the different mix in our earnings across the various jurisdictions in which we are.
Speaker Change: The increase mainly stems from the impact of a different mix.
Across the various jurisdictions in which will create.
Speaker Change: As of October 13, 2024, we recorded a return on equity of 19.1%, and our return on employed capital remained at 12.3%.
Speaker Change: As of October 13, 2024, we will copy the retailed on equity at 19, 1% and our return on capital employed to 12.
Speaker Change: 3%.
Speaker Change: During the fiscal year, our leverage ratio decreased to 2.07. During the fiscal year, our leverage ratio decreased to, sorry, we also add, sorry. We also add strong balance sheet liquidity with 2.2 billion dollars in cash and an additional 2.7 billion dollars available through our main revolving credit.
Speaker Change: During the fiscal year, our leverage ratio decreased to two <unk> during the fiscal year, our leverage ratio decreased to so we also we also are strong balance sheet liquidity with $2 $2 billion in cash and an additional $2 $7 billion available, while mainly we will increase investments.
Speaker Change: During the second quarter of fiscal 2025 we were purchase 8.7 million shares for an amount of nearly $519 million.
During the second quarter of fiscal 2025, we repurchased eight 7 million shares for an amount of <unk>.
Speaker Change: $519 million.
Speaker Change: We also repaid our Canadian dollar denominated senior and sexual note for seven hundred million dollar Canadian and set all the cross-currency interest rate swaps associated with the notes which are an info about the value of one hundred fifty two million dollars of the
Speaker Change: We also repaid a Canadian dollar denominated senior unsecured note for $700 million Canadian and settled the cross currency interest rate swaps associated with the notes, which had an improvable sale value of nearly $52 million.
Speaker Change: On August 16, 2024, we entered into inviting agreement to acquire 270 company owned and operated a common on three-tail and shoot-fight operating under the get-go cap.
Speaker Change: On August 16, 2024, we entered into a binding agreement to acquire 270 company owned and operated convenience retail in <unk> site operating and of the get go Cassie.
Speaker Change: Plus, Market Brown from Supermarket Retail, Giant Ingalls Inc. for a purchase price of approximately 1.5 billion.
Speaker Change: Plus market Brown from supermarket retail giant Eagle, Inc. For a purchase price of approximately $1 6 billion.
Speaker Change: Subject to post closing adjust
Speaker Change: Subject to post closing adjustments <unk> sites are located in the eastern States of Indiana, Maryland, Pennsylvania, and West Virginia in the United States.
Speaker Change: Get go sites are located in the United States of Indiana, Maryland, Ohio, Pennsylvania, and West Virginia in the United.
Speaker Change: The transaction, which would be financed using our available cash and all exacting free necessities, including our United States commercial paper program, is expected to close in calendar year 2025 and is subject to custom-reclosing conditions and regulatory approval.
Speaker Change: The transaction, which would be financed using our available cash and or exiting <unk>, including our United States commercial paper program is expected to close in calendar year, 2025, and is subject to customary closing conditions and regulatory approvals.
Speaker Change: Turning now to the dividend, the Board of Directors declared yesterday a quarterly dividend of 19.5 cents can attend Coche-Tard, an increase of 9.4% for the second quarter of fiscal 2025 to share all those on record as a December 4, 2024, and approve this payment effective December
Speaker Change: Turning now to the dividend the board of directors declared yesterday equality of $19.05 Canadian per share an increase of 11, 4% for the second quarter of fiscal 2025 to shareholders on record as of December 2024, and acuity is payment effective December 18th 2020.
Speaker Change: Paul.
Paul: With that, let me rate you rate a few keys.
Paul: With that let me reiterate a few key points.
Paul: We are maintaining solid momentum as we are into the fourth quarter. We're cautious about the macro-environment and consumer-up.
Paul: We are maintaining solid momentum as we head into the third quarter with cautious optimism about the macro environment and consumer uptake.
Paul: We continue to get market share in each category and capitalize on our recent opposition while maintaining operational excellence.
Paul: We continue to gain market share in key categories and capitalize on our recent acquisition, while maintaining operational excellence.
Paul: We are focused on person growth opportunities leveraging our firm balance sheet and maintaining the discipline capital deployment to support our proven long-term goal of creating value for our shoulders.
Paul: We are focused on pursuing growth opportunities leveraging our strong balance sheet and maintaining a disciplined capital deployment to support our proven long term goal of creating value for our shareholders.
Speaker Change: I thank you all for the attention. I will turn the call over again to our president and CEO Alex.
Speaker Change: Thank you all for the attention I will turn the call over again, two operating units you Alex veto.
Speaker Change: Thank you, Felipe. But the many economic challenges across the globe. These are not easy days for our customers.
Speaker Change: Thank you Philippe.
With the many economic challenges across the globe. These are not easy days for our customers.
Speaker Change: As we are on the eve of Thanksgiving in the U.S., I just want to close by saying thank you. Thank you to our store and field team members for your commitment to making our customers lives a little easier every day.
As we are on the eve of Thanksgiving in the U S. I just want to close by saying Thank you. Thank.
Speaker Change: Thank you to our store and field team members for your commitment to making our customers' lives a little easier every day.
Speaker Change: Thank you to our valued customers for visiting us and seeing first hand our efforts to provide you with compelling offer.
Speaker Change: And thank you to our valued customers for visiting us and seeing firsthand our efforts to provide you with compelling offers.
Speaker Change: also want to thank our shareholders for your continued support of the business.
Speaker Change: Also want to thank our shareholders for your continued support of the business.
Speaker Change: For all of you in the U.S., I hope you have a wonderful Thanksgiving filled with family and friends. And if you need any last minute items or fuel to get to your destination, come visit our locations as we are old.
Speaker Change: For all of you in the U S. OPI are a wonderful Thanksgiving build with family and friends and if you need any last minute items, our fuel to get to your destination come visit our locations as we are open.
Speaker Change: On that note, let's turn it over to the operator to answer Analyst's question.
Speaker Change: On that note, let's turn it over to the operator to answer analyst questions.
Speaker Change: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the one on your touchtone phone. You will hear prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the
Speaker Change: Thank you ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press star followed by the one on your Touchtone phone.
You'll hear a prompt that your hand has been raised should you wish to decline from the polling process. Please press star followed by the <unk>.
Speaker Change: If you are using a speaker phone, please lift the hands up before pressing any-
Speaker Change: If you are using a speaker phone please lift the handset before pressing any keys one moment. Please for your first question.
Speaker Change: One moment, please feel your first question.
Speaker Change: Your first question comes from Michael Venny with QD Cowan. Your line is now open.
Speaker Change: Your first question comes from Michael Van <unk> with TD Cowen. Your line is now open.
Speaker Change: Thank you and good morning. Question first on the same scale performance in the U.S. and the promotional activity that came along with it at the same time.
Thank you and good morning.
Speaker Change: Question first on the same store sales performance in the U S.
Speaker Change: And the promotional activity that came along with that at the same time.
Speaker Change: I think last quarter, you talked about higher levels of promotional activity and that was going to be limited to Q2, but we saw that again in Q3.
Speaker Change: We are going to be limited to Q2 but we saw that again in Q3. Can you talk about how?
Speaker Change: Can you talk about how.
Speaker Change: You know, I guess why the promotional activity was extended and it wasn't any different and then, you know, was that directly?
Speaker Change: I guess why the promotional activity was.
Standard and it wasn't any different and then.
Speaker Change: Where does that directly.
Speaker Change: Hi to the improved performance on the same-sure sales as you exited as you went through Q2 and if you're positive heading into Q.
Speaker Change: Hi to the improved performance.
Speaker Change: On the same store sales as you exited as you went through Q2, and if youre positive heading into Q3.
Speaker Change: Yeah, sure. And thanks for the question. Our plans had, especially around our dispensed beverages, they were summer campaigns kind of into the fall and that was always the plan. So those dispensed beverage campaigns continued through a fairly feasible chunk of this last quarter. Those have now ended. I think we're getting increasingly better with our data sets, increasingly faster understanding our promotions. As a result, we have shut down quite a few promotions activity. And we're seeing the results of that over the last eight weeks or the first eight weeks of this quarter. And it looks like the things that we are doing are working. So I think you'll see a difference going forward. And we feel really good about the traffic we drove, the unit growth we drove, the value we showed. And now we're pivoting to our meal deals. Those are being really well received. They're growing exponentially week on week and we believe we've just trashed the surface. The margin profile of those meal deals are more attractive than what we were doing over the summer. And again, I think we're encouraged by the first eight weeks of this quarter.
Yes, sure and thanks for the question.
Our plans had especially around our dispense beverages. They were summer campaigns kind of into the fall and that was always the plan. So those dispense beverage campaigns are continued through a fairly sizable chunk of this last quarter.
Speaker Change: Those have now ended I think we're getting increasingly better.
Speaker Change: With our datasets increasingly faster understanding our promotions as a result, we have shut down.
Speaker Change: A few promotions activity and we're seeing the results of that.
Speaker Change: Over the last eight weeks are the first eight weeks of this quarter and it looks like the things that we're doing are working so I think I think youll see a difference.
Going forward and we feel really good about the traffic we drove the unit growth we drove the value we showed and.
Speaker Change: And now we're pivoting to our meal deals.
Speaker Change: Those are being really well received they are growing exponentially week on week and we believe we've just scratched the surface on the margin profile of those meal deals are more attractive than what we were doing over the summer.
Speaker Change: And again I think we're encouraged by the first eight weeks of this quarter.
Speaker Change: Great, thank you. Can you just quantify the impact of the hurricanes as a follow-up?
Speaker Change: Okay, great. Thank you and can you just quantify the impact of the Hurricanes.
Speaker Change: Follow up.
Speaker Change: We pay.
Speaker Change: Philippe.
Speaker Change: Yes, it was, we estimated the impact of roughly 40 basis points in our same thought sales in US.
Speaker Change: Yes.
Speaker Change: We estimate that the impact of roughly 40 basis points.
Speaker Change: Same store sales in U S.
Speaker Change: And that's for the merge and for the volume actually, we should make that at a 70 basis point.
Speaker Change: And not for the <unk> and for the <unk> much relief to estimate that that 70 basis point actually.
Speaker Change: and I'm not sure I'll answer this, but heading into Q3 was same store sales in the U.S.
Okay, and I am not sure Alex answered this but <unk>.
Heading into Q3, why the same store sales in the us positive.
Speaker Change: For state, we feel good.
Firstly, we don't feel good.
Speaker Change: Yeah, yeah
Speaker Change: Yes, yes.
Speaker Change: Thank you very much.
Okay. Thank you very much.
Speaker Change: Your next question comes from Mark Petrie with CIBC. Your line is now open.
Your next question comes from Mark Petrie with CIBC. Your line is now open.
Mark Petrie: Yeah, thanks good morning. I guess I I wanted to ask mostly about
Mark Petrie: Yes. Thanks, Good morning, I guess I wanted to ask mostly about.
Mark Petrie: about the cost control initiatives, obviously Q1 was a little bit of an aberration with regards to the organic SG&A increase that came under or that I guess sort of normalized in Q2. Could you talk about the dynamics there? Was there sort of an incremental action or was this just sort of the natural ebb and flow of the b-
Mark Petrie: How about the cost control initiatives, obviously Q1 was a little bit of an aberration with regards to the organic SG&A increase that came under or that I guess.
Mark Petrie: Normalized in Q2 could you talk about.
Mark Petrie: The dynamics, there or was there sort of incremental action or was this just sort of the natural ebb and flow of.
Mark Petrie: Of the business.
Speaker Change: Yes and.
Speaker Change: Thank you Paul for the question.
Speaker Change: Yes.
<unk>.
We mentioned.
Speaker Change: Few tons.
Speaker Change: R R.
Speaker Change: Medium term goal is always to beat inflation by by 1% so quarter to quarter you as we have seen in Q1.
Speaker Change: We either some impact related to the investment that we are doing it in some part of the business and here in that case was with technology.
Speaker Change: <unk>.
But when we look at the overall cost we feel pretty good about <unk> two <unk> initiatives, we have mentioned that earlier in the call, but we see a locker.
Speaker Change: Good stuff happening.
Speaker Change: In store. So for example, <unk> to <unk>.
Speaker Change: Some more data.
Speaker Change: We used 3% less hours in last year install so a lot of <unk> in terms of automation the New York.
Speaker Change: Streamlining processes.
Speaker Change: Continuing with visa is youll see some <unk> in order to remove Banco pizza.
Speaker Change: Task from the stores and to put <unk> sensor.
Speaker Change: We see a lot of.
Speaker Change: Wholesale saw good inkjet you around the GFR and centralization of.
Speaker Change: Negotiation on the contract for Jennifer so on the marketing side.
Speaker Change: <unk> payments. So we have been through some you know.
Speaker Change: Good news good negotiation to.
Speaker Change: <unk> routine.
Speaker Change: <unk> contract so.
Speaker Change: So a lot of.
Speaker Change: Savings come from there and finally also on the on the.
Speaker Change: On the global functions.
Speaker Change: We see costs going down compared to last year. So that's coming from also the centralization the shafts some incentives that we are.
Speaker Change: Put in place.
Speaker Change: So overall you see many initiatives that to give us a very good co products.
Speaker Change: In terms of control.
Speaker Change: Cost control, but we'll continue to deliver.
Speaker Change: We are quite disciplined.
Speaker Change: D&A, so very confident that the cost will help us to work through this challenging time on the on the top line.
Speaker Change: Yeah, okay. That's helpful. Thank you. And if I could just follow up on the comment earlier with regards to the the beverage program through Q2 and the investment there. How did that program perform versus your expectations with regards to both the top line impact and then the net impact.
Speaker Change: Yeah. Okay. That's helpful. Thank you and if I could just follow up on the comment earlier with regards to the <unk>.
Speaker Change: Our beverage program through Q2, and the investment there.
How did that program performed versus your expectations with regards to both the top line impact and then the.
Speaker Change: The net impact.
Speaker Change: It absolutely grew units, which is an in-group trips to our stores, which was the intent. It did not, the basket associated with not what we expected, and as a result of that it impacted our sales and it impacted our margin. It was about 80% of the margin miss, so that's the color.
It absolutely grew units.
Speaker Change: Which is in and grew trips to our stores, which was the intent it.
Speaker Change: It did not the basket associated was not what we expected in.
Speaker Change: And as a result of that.
Speaker Change: It impacted our sales and it impacted our margin it was about 80% of the.
Speaker Change: The margin Miss so.
Speaker Change: That's the color.
Speaker Change: Okay, very helpful. And sorry, I didn't actually hear what you were saying with regards to Q3 and the momentum on Mike's question. What is Q3 to date positive or when you say improve momentum?
Okay very helpful and sorry, I, just I didn't actually here.
Speaker Change: What you were saying with regards to Q3 and the momentum on on Mike's question.
Speaker Change: What is Q3 to date positive or just when you say improved momentum you just mean not as negative on U S March same store sales.
Speaker Change: Not as negative on U.S. merchant ship.
Speaker Change: Looks good, looks good, it's positive.
Speaker Change: It looks good it looks good it's positive.
Speaker Change: Thank you all the best thank you
Got you. Thank you all the best.
Speaker Change: Thank you.
Speaker Change: Your next question comes from Irene Netell with RBC Capital Markets. Your line is now open.
Speaker Change: Your next question comes from Irene <unk> with RBC capital markets. Your line is now open.
Speaker Change: Thank you. Good morning, everyone. If we could just turn to Europe for a moment, you know, certainly when when the access required from total, I think you referred to it as sort of a carve out, which is really what it was. Can you talk about, you know, where you stand right now in terms of stabilizing the business? And are we now at the point where you can actually start putting the circle cave programs into the total network in Europe ? And how we should think about sort of the rebranding going forward?
Speaker Change: Thanks, and good morning, everyone. If we could just turn to Europe for a moment certainly win when the assets required from Teck Hal I think you referred to it as Trevor.
Carve out which is really what it was can you talk about.
Speaker Change: Where you stand right now in terms of stabilizing the business and are we now at the point, where you can actually start putting the circle K programs into <unk> Hotel network in Europe, and how we should think about the rebranding going forward.
Speaker Change: Thank you, Irene. Do you want to take it, Philippe? Yeah, I can. So, on the integration of Total, Irene, it's moving at pace. We feel very good. As you have seen, the result on this perimeter is improving quarter over quarter in terms of integration. So, we have focused a lot of our attention in the first quarters to make sure that we are integrating in terms of back office, finance, and that's happening there. Of course, at store level, we have already started to put in place a pilot with our Horizon concept in the 4BUs. The results are promising there, too. So, I'm feeling good about that. And when we look at, I would say, the roadmap for the synergies, of course, it takes some time. And we believe that we'll see the full impact of the synergies based on year two or year three. But we are very confident that both in terms of merchandise, we'll see a nice uplift there on the cost side also. Both at store and corporate level, we'll see also great synergies coming from there. So, overall, I'm feeling good. And the team also, most importantly, has integrated well, starting to share and to get best practice from other parts of the business. That's something that you know is very important in our culture. So, yeah, I'm feeling good about the plan that we have there and the execution so far. Alex, anything that you want to add?
Speaker Change: Yes, I can share with you all but thank you Irene.
Speaker Change: Do you want to take it Philippe.
Speaker Change: Got you.
So.
Speaker Change: On the on the integration of total arena.
Speaker Change: It's moving it's moving at pace, we feel very good as you have seen.
Speaker Change: Sure.
Speaker Change: <unk>.
Speaker Change: The result on the on the on the on display modalities improving quarter over quarter.
In terms of integration. So we have a focus on local concentrate in the in the first quarter as you need to make sure that we are integrating in terms of renewal back office finance.
Speaker Change: And that's happening there of course.
Speaker Change: <unk>, we have already started to put in place.
Speaker Change: Pilots that we felt aurizon concept.
Speaker Change: In the former.
Speaker Change: The use of <unk>.
Speaker Change: Results are promising there too.
Speaker Change: So feeling good about that.
Speaker Change: And when we look at the I would say the roadmap for the synergies.
Speaker Change: Of course, it's.
Speaker Change: It takes some times and the lead that we will see the fuller full.
<unk>.
Speaker Change: The impact of the synergies are based on year to year.
But we see we are very confident that <unk> in terms of merchandise.
Speaker Change: We will see a nice at least to there.
Speaker Change: On the cost side also.
Speaker Change: At store and corporate level, we will see also.
Speaker Change: Great great synergies coming from there. So overall, we're feeling good.
And the team also most importantly.
Speaker Change: The integrated well.
Talking to shell and <unk> to debt with proceeds from over part of the business, that's something that cumulative brief accounting of the truck. So so yes.
Speaker Change: Feeling good about above the plan that we have there and the execution for Alex.
That you want to add.
Speaker Change: No, I think Irene, we started to retire some of the SLAs. We'll retire a couple more of them by the end of this calendar year. That realizes cost synergies, but it also enables other synergies as we take over accounting and different functions. So I think we're encouraged by that. The longest pull in the tent is IT and we just finalized our plan to accelerate that over the next 24 months and excited. So I think we're feeling good about our journey with total and hopefully and we believe we see it in our results and you see it in our results and I think we'll start reporting on synergies next quarter.
Speaker Change: Yes.
I think Irene we started to retire some of the SLS will retire a couple more of them by the end of this calendar year that realize cost synergies, but it also.
Enables other synergies as we take over accounting and different functions. So I think we're encouraged by that the longest pull in the tent is it.
Speaker Change: We just finalized our plan to accelerate that.
Speaker Change: The next 24 months.
Excited so I think we're feeling good about our journey with total <unk> and.
And hopefully and we believe we see it in our results and you see it in our results and I think we will start reporting on synergies next quarter.
Speaker Change: That's really helpful. Thank you. And then just as a follow up on the Hong Kong piece recognize it small. But, you know, any line of sight on when that that drag will sort of not be a drag anymore.
Speaker Change: That's really helpful. Thank you and then just as a follow up on the Hong Kong pace recognize that small.
Speaker Change: But any line of sight on on when that that drag will.
Speaker Change: Not be a drag anymore.
Speaker Change: Yeah, I think Hong Kong is doing better, but the drag of the cigarettes. I mean, they basically doubled cigarette prices in two years. So we'll cycle that kind of the end of this fiscal. So assuming we don't get another tax increase or something else, we should cycle that about the end of this fiscal Irene. So we'll cycle that about the end of this fiscal.
Speaker Change: Yes.
Hong Kong is doing better.
Speaker Change: The drag of the cigarettes, I mean, they basically doubled cigarette prices in two years. So we'll cycle that kind of at the end of this fiscal so assuming we don't get another tax increase or something else, we should cycled out about the end of this fiscal Irene.
Speaker Change: That's great.
Speaker Change: Okay, that's great. Thanks.
Speaker Change: Please limit yourself to one question.
Please limit yourself to one question.
Speaker Change: Your next question comes from Luke Hannon with Cannecord, Genuity. Your line is now-
Speaker Change: Your next question comes from Luke Hannan with Canaccord Genuity. Your line is now open.
Luke Hannan: Thanks. Good morning. I wanted to ask about, you've talked about some of the reverse synergies that you expect to get out of get-go. And I'm curious to know as far as the food program and the loyalty that they have, what do those specific programs have that are unique and differentiated versus maybe some of the other acquisitions that you've done in the past where you've gotten, perhaps, similar reverse.
Luke Hannan: Thanks, Good morning, I wanted to ask about you talked about some of the reverse or synergies that you expect to get out of gekko and I'm curious to know as far as the food program and the loyalty.
Luke Hannan: They have what do those specific programs have that are unique and differentiated versus maybe some of the other acquisitions that you've done in the past, where you've gotten perhaps similar reverse synergies.
Luke Hannan: The cafe market concept that they deploy is a holistic food offer with ordering screens. It's much more like a sheet or a wawa. You would see in the market. So it is. It's different than anyone we've ever acquired. It's certainly different than our fresh food fast. The fresh products that they bring in from their commissary is robust, very high quality products. So again, just a very broad breadth of food and fresh products underpin by supply chain. You know, their loyalty flywheel with their grocery stores and the technology that backs that up is compelling. If you go to those markets, it really resonates with consumers. You absolutely see that in their per store volume. So we think there's a lot of learnings to how that program works. And we're really excited about the forward partnership with Giant Ebo. I think the more we work with them, just the cultural fit and the way we're engaging, we feel really good about it.
The Cathay market concept that they deploy is a holistic food offer with.
Ordering screens, it's much more like a sheets or a wawa you would see in the market.
So it is it's different than any one we've ever acquired it's certainly different than our fresh food fast.
Luke Hannan: The fresh products that they bring in from their commentary.
Luke Hannan: Is robust.
Luke Hannan: High quality products. So again, just a very broad breadth of food and fresh products underpinned by supply chain.
Their loyalty flywheel with their grocery stores.
Luke Hannan: Technology that backs that up is compelling.
Luke Hannan: If you go to those markets it really resonates with consumers you absolutely see that in their per store volume.
Luke Hannan: We think theres a lot of learnings to how that program works and and we're really excited about the forward partnership with giant Eagle I think the more we work with them just the cultural fit and the way we are engaging.
Luke Hannan: We feel really good about it.
Thank you.
Luke Hannan: Your next question comes from Martin Linder Westiefel. Your line is now open.
Your next question comes from Martin Landry with Stifel. Your line is now open.
Speaker Change: Hi, good morning, guys. I would like to touch on the merchandise and margin in the US. It's been soft for several quarters. And I understand, you know, some of that comes from high promotional activity. But I was wondering if you could refresh us or update us on what are your gross margin drivers.
Speaker Change: Hi, good morning, guys.
Speaker Change: I would like to touch on the merchandize margin in the U S.
Speaker Change: It's been soft for several quarters.
Speaker Change: I understand some of that comes from high promotional activity, but I was wondering if you could refresh us or update us on what are your gross margin drivers for the U S business for merchandise sales.
Speaker Change: for the U.S. business for merchandise.
Speaker Change: I think for us, it's all about understanding our data. We talked about this, we knew we were investing heavily over the winter. We wanted to drive traffic and we wanted to drive unit growth. And I think the most important thing is that we wanted to show value to our customers. And we will continue to show value. Again, we are focusing on food sales as the way to do that. And we like the margin profile. And we think it's more competitive. We couldn't be more satisfied with the first six or seven weeks of data we've seen and just the sequential development we're seeing week after week. When you look inside our margins, I think we've been very strong on promotional activity, trying to show value and trying to drive sales. The positive of our data capability, continuing to improve, we now have the ability to analyze these promotions very quickly, almost in real-time, and stop promotions that are not achieving what we wanted them to achieve. The result of this is that we are seeing more and more sales, and we are seeing our margin improve.
Speaker Change: I think for US it's all about understanding our data we talked about it we knew we were investing very heavily through the summer and we wanted to drive traffic and we wanted to drive unit growth and I think most importantly, we wanted to show value to our customer.
Speaker Change: And we will continue to show value again, we're pivoting.
Speaker Change: Two meal deals as the way to do that and we like the margin profile. We also.
Speaker Change: I think we believe that's more compelling we couldnt be more pleased with the first six seven weeks of data that we've seen and just the sequential growth. We're seeing week on week. When you look inside of our margins.
Speaker Change: We got very heavy on promotional activity trying to show value and trying to drive sales the positive of our data capability as we continue to improve we now have the ability to analyze those promotions very quickly.
Speaker Change: <unk> in almost real time and shut down promotions that are not achieving what we intended them for them to achieve.
Speaker Change: The result of that has been that we're actually seeing increased sales and we're seeing our margin improved.
Speaker Change: Also, if I can add, you know, we have going on within the field to sub-initiative, you know, cogs renewal session with supplier. And that brings also, you know, some good results in US. We are now running out also that, you know, over in the overreach.
Speaker Change: Also if I can add.
Speaker Change: We have going on.
Within the <unk> Division.
Speaker Change: <unk>.
Speaker Change: The renegotiation with <unk> supplier.
Speaker Change: And Thats a greenfield saw.
Some good results in U S. We are now rolling out with that.
Speaker Change: In over <unk> of our regions.
Speaker Change: But that's helping us, you know, through, I would say, the data analytics, but to sit at the table with Sprayers and to get better at negotiating promosons.
Speaker Change: That's helping us.
Speaker Change: I would say the data analytics.
Speaker Change: But to sit at the table to be firm and to get better at negotiating and negotiating a promotions.
Speaker Change: and negotiating basically the run rate terms with our supplier. So feeling good about also what's happening there. And I think that's really helpful so in the next coming quarters you know to drive better, better GP range.
Speaker Change: And negotiating PDP.
Speaker Change: The revenue run rates or terms, we refer us to play out so.
Speaker Change: Feeling good about what's happening there and I think that will help also saw it in the next coming quarters.
Speaker Change: Drive better a better GP rate.
Speaker Change: Okay, that's helpful. Thank you and best of luck Thank you
Speaker Change: Okay. That's helpful. Thank you and best of luck.
Speaker Change: Thank you.
Speaker Change: Your next question comes from Chris Lee with Desjardins. Your line is now
Speaker Change: Your next question comes from Chris Li with Deutsche Bank. Your line is now open.
Speaker Change: Oh, good morning. I'm just maybe following up on your comments that U.S. merchandise sales is positive, quarterly dates. I'm just wondering, you know, perhaps other than, you know, easier year go comparison and some of the enhanced promotions that are driving high traffic. I use seeing any green shoots or stabilization from the U.S. consumer that gives you some confidence. That is momentum that you're seeing is sustainable. Thank you.
Speaker Change: All right. Good morning, I'm, just maybe following up on your comments that U S merchandise.
Speaker Change: <unk> sales is positive quarter to date.
Speaker Change: Im wondering if.
Speaker Change: Perhaps other than easier.
Speaker Change: For comparison in <unk>.
Speaker Change: Some of the enhanced promotions that are driving high traffic.
Speaker Change: Are you seeing any green shoots or stabilization from the U S. Consumer that gives you some confidence that this momentum that youre seeing a sustainable thank you.
Speaker Change: Thanks.
Speaker Change: I think we believe the consumer is under significant pressure. I don't think we've seen something that suggests that that change is or that has changed. I think we're all optimistic and hopeful as we move into 2025 that as interest rates might come down, we might continue to see inflation come down. But I'd say right now, that consumer is still under significant pressure. It's really our focus is on our execution. We are operators at the core. We are laser focused on fast-friendly and in stock. Our turnover is at the lowest levels we've ever achieved and our operating metrics are improving period on period. We will continue to try and differentiate that way and differentiate through value perception, through our meal deals, our private labels, using our data capabilities in our pricing to show value perception where our customers see it. And also, we touched on Inter Circle and our loyalty programs. We are gathering tremendous amounts of data. We are understanding our customers better. We've set up a customer insights through our GCN and the more we know about our customers, we are getting better at how do we show them the value that will make them come to us.
Speaker Change: I think we believe the consumer is under significant pressure I don't think we've seen something that says that suggests that that changes or that has changed I think we're we're all optimistic and hopeful as we move into 2025 that is interest rates might come down we might.
Speaker Change: Continue to see inflation come down, but I'd say right now.
That consumer is still under significant pressure, it's really our focus is on our execution. We are operators at the core.
Speaker Change: We are laser focused on fast friendly and in stock our turnover is at the lowest levels we've ever achieved.
Speaker Change: And our operating metrics are improving period on period, we will continue to try and differentiate that way and differentiate through value perception through our meal deals our private labels using our data capabilities in our pricing to show the value perception, where our customers see it and also we touched on in her.
Speaker Change: Circle in our loyalty programs. We are we are gathering tremendous amounts of data we are understanding our customers better we have set up a customer insights through our GCN and.
The more we know about our customers we are getting better at how do we show them the value that will make them come to us.
Alex Miller: Quick, that makes sense and happy Thanksgiving Alex. Thanks.
Alex Miller: Great that makes sense and happy Thanksgiving Alex Thanks.
Alex Miller: And I thank you appreciate that.
Alex Miller: Hey, Thank you I appreciate that.
Alex Miller: Your next question comes from Tammy Chen with BMO Capital Markets. Your line is now open.
Your next question comes from Tami, Chen with BMO capital markets. Your line is now open.
Speaker Change: Hello. My first question is about OPEX and SG&A. I would like to better understand the specific component of the investments you should make in the future, if there is something similar. What I mean by that is that I think last year, your organic growth was a bit high. And I think you mentioned that there were a lot of non-recurring items. So, when I look at the organic growth of SG&A over this five-year period of 2.3%, I think it increased a bit sequentially. But you mentioned that you continue to do a good job in reducing and optimizing working hours. So, can you remind us, what are the offsets that lead to this higher SG&A growth? Is it an expense related to digitalization or loyalty, and is it expected to continue and be reflected in your five-year goals?
Speaker Change: Hi, Good morning, My one question is going back to the.
Speaker Change: The opex of the SG&A.
Speaker Change: I just wanted to better understand.
Speaker Change: A specific component of.
Speaker Change: That means that we need to make going forward. If there is something like that and what I mean by that.
Speaker Change: I think last quarter your organic growth was a little high and I think you had called out.
Speaker Change: <unk> non reoccurring items, so when I look at this quarter's organic <unk> growth of two 3% I think that increased sequentially.
Speaker Change: Highlighted you continue to do good job at reducing and optimizing labor hour. So can you just remind us what are the offsets that are driving this higher external growth.
Is it all our loyalty related spend and is that expected to continue and recycled over a five year target.
Speaker Change: Thank you, Thalim. And yes, it's a short answer. As mentioned before and in the last conferences, we are investing significantly in technology to improve our customer experience at the store level, digitizing the experience there. We are also doing a lot to strengthen the foundations. The reality is that we have not invested enough in the past in our technology. So, at the store level, we are ensuring that the store can offer a good experience to the employee, to the user, but also at the back office level, by ensuring and making sure that we can automate as much as possible. I would say that the greatest skill in terms of investment or expense investment definitely comes from technology. And it's something we have borrowed in our 10th Foundation Day. And yes, when we talk, in terms of objectives, about improving inflation by 1%, we are borrowing into these objectives, into the investment we are making in technology. So, the Feed to Serve initiative should fund this technology investment. Thank you.
Speaker Change: Thanks Anthony.
Speaker Change: And the short answer is yes.
Speaker Change: As mentioned earlier in the past concurrence of.
Speaker Change: We added.
Speaker Change: <unk> Tec and technology to improve our customer experience.
Speaker Change: A level digitizing the experience there.
So just to strengthen the foundations.
Speaker Change: Keith.
Speaker Change: <unk> enough in the past on our technology. So at soluble again, just making sure that.
Speaker Change: The store can deliver.
Speaker Change: <unk> brand to the employee.
Speaker Change: Customer, but also have the back office level and shrink.
Speaker Change: Making sure that we can automate automatize as much as we can so I would say that the biggest component in terms of EBIT month.
Speaker Change: <unk> expense.
Speaker Change: <unk> expense in this month is coming from tech differently and Thats something that we have embedded in our.
Speaker Change: <unk> 10 for the rezoning and and yet when we are talking about you know.
Speaker Change: In terms of target to beat inflation by 1%.
We are embedded in these targets include the investment that we're doing.
Speaker Change: So.
Speaker Change: The 50 to 70 ships should fund the visa investment in Tech.
Speaker Change: Thank you.
Speaker Change: Your next question comes from Vishal Shredar with National Bank. Your line is now open.
Speaker Change: Your next question comes from Vishal <unk> with National Bank. Your line is now open.
Speaker Change: Hi, thanks for taking my question. I just wanted a clarification on the margin. You said, we've removed the heavy promotional activity. We feel like we're getting better at promoting and our margin is improving. I didn't understand if that was an eight weeks, a year of a year comment or sequential or improving relative to what. And as you reflect on that answer, maybe it can also just take a step back and help us understand relative to the plan that you announced at the investor day.
Speaker Change: Hi, Thanks for taking my question.
Speaker Change: I just wanted a clarification on the on the margin you said, we've removed the havent heavy promotional activity, we feel like we're getting better at promoting and our margin is improving I didn't understand if that was.
Speaker Change: Eight weeks a year over year comment or sequential are improving relative to what.
Speaker Change: As you reflect on that answer and maybe if you can also just take a step back and help us understand relative to the plan that you announced at the Investor Day.
Speaker Change: Where are you tracking the head and where are you tracking behind with respect to your initials?
Speaker Change: <unk>.
Speaker Change: Where are you tracking ahead, and where are you tracking behind with respect to your initiatives.
Speaker Change: Obviously, theres a lot of macro under.
Speaker Change: Underneath the results, we can't really see the performance and the underlying.
Speaker Change: Underneath the results that we can't really see the performance in the underlying benefits. Thank you.
Speaker Change: We pay you want to take that or you want me to?
Speaker Change: We pay you want to take that or you want me to.
Speaker Change: The text is already in English.
Speaker Change: Yes I.
Speaker Change: I can start with.
The new <unk> NAND.
Speaker Change: What's going well I think we are.
Speaker Change: Very good about you know when we look at the four pillar when the customer growth.
Speaker Change: We deal with week growth I think keeps.
Speaker Change: Doing very well as I mentioned by Alex failure, and Tru <unk> program. We are running ahead of our plan.
Speaker Change: We we we are as you know a key then we have just announced to our recent acquisition. So we are being very active on that so feeling good about the bulk of the of the <unk>.
Speaker Change: We are definitely also moving into radiation on the on the fit to serve already Indentified. The 800 million in order on the G&A side.
Speaker Change: Although in the food.
Speaker Change: The food and first.
We think that we have.
The REIT book is there of course, the lacrosse is not out there.
Speaker Change: We believe that we have a plan, we just need not to execute.
Speaker Change: And we view that as a result, we come who that is.
Speaker Change: <unk>.
Speaker Change: That program.
Speaker Change: Deliver positive growth during the quarter. So we are going in the right direction, but that's not enough.
Speaker Change: We know that and we continue and on the <unk> side, we have not.
Speaker Change: I mentioned that but same here of course, so there is a pressure on the demand as well we see that.
In the few volume, but we as you remember we said.
Speaker Change: <unk> said that <unk> would be one of our <unk> and <unk> in the U S is growing we have delivered.
Speaker Change: A 5% <unk> volume on the <unk> side of the business in U S.
Speaker Change: So that's quite positive, you know, in the quarter. We see a number of, you know, customers going in that part of the business. And and we know that we have, you know, a good competitive advantage there.
Speaker Change: So thats quite positive in the quarter, we see a number of you know.
Speaker Change: Customers are growing in that part of the business.
Speaker Change: And we know that we have.
Speaker Change: A good competitive advantage there.
Speaker Change: And sites across the across the 50 states of the U S.
Speaker Change: So it's moving in the right direction in that sense as well.
Speaker Change: Alexa do onto other anything there.
Speaker Change: Yeah, I think we absolutely believe that the focus areas in our priorities within 10 for the win are are the right ones and we remain extremely focused and I think as we pay stated we've got a couple areas we feel really good about we are on or ahead of our 10 for the win plan and in some of the areas the macro has really not helped us but we need to accelerate differentiation and accelerate unit growth and accelerate trips to our stores. So that's where our focus is but we, you know, the areas we shared data, digital, thirst, food, cost controls, we absolutely believe are the right focus areas and we continue to be ways are focused on those areas. Your question about margin, I'm talking sequentially. Thank you.
Speaker Change: Yes, I think we absolutely believe that the focus areas and our priorities with intent for the when are the right ones and we remain extremely focused and I think as Philippe stated we've got a couple of areas. We feel really good about we are on or ahead of our 10 for the wind plant and in some of the areas.
Speaker Change: <unk> is really not helped us, but we need to accelerate differentiation.
And accelerate unit growth and accelerate trips to our stores. So that's where our focus is but we the areas we shared data digital thirst food.
Speaker Change: Cost controls.
Speaker Change: We absolutely believe are the right focus areas and we continue to be laser focused on those areas Youre question around margin I am talking sequentially.
Speaker Change: Thank you.
Speaker Change: Your next question comes from Bonnie Herzog with Goldman Sachs. Your line is now open.
Speaker Change: Your next question comes from Bonnie Herzog with Goldman Sachs. Your line is now open.
Speaker Change: All right. Thank you. Good morning. I know it's early, but I was hoping you could touch on how the incoming Trump administration might have an impact on your business here in the U.S. But, you know, also internationally, you know, I guess given what we know and maybe what's been said publicly thus far, you know, what do you see as the biggest areas of opportunity for your business and then, you know, where do you see the most potential risk? [inaudible]
Speaker Change: Alright, Thank you and good morning.
Speaker Change: I know, it's early but I was hoping you could touch on how the incoming Trump administration might have an impact on your business here in the U S. But also internationally I guess, given what we know and maybe what's been.
Said publically, thus far what do you see as the biggest areas of opportunity for your business and then where do you see the most potential Ross.
Speaker Change: Thanks, Bonnie. It's awfully early days and there's an awful lot of speculation. I think we've looked at a couple things. EBT is an example. EBT is about 0.6 or 0.7% of our sales in the United States. Some of the things that have been talked about perhaps half of that a little less than half of that could be at risk as an example. We've looked about 3% of our goods. Today in our stores comes from China. So a very small amount. Most of that is general merch specifically kind of phone chargers and things like that. And we think everyone would be impacted similarly so we don't see a big issue with that. There's just so much unknown around what's actually going to happen, Bonnie, that for us it's early days and we have started to consider some things. But we don't see anything at this time that we think is going to overly impact us and what we hope is that the consumers around the world can inflation goes down and folks can start to feel better about their disposable goods. But we don't know what's going to happen.
Speaker Change: Thanks Bonnie.
Speaker Change: It's awfully early days and there is a awful lot of speculation I think we've looked at a couple of things on EBT. As an example, <unk> is about six 0.6 or 0.7% of our sales.
In the United States.
Speaker Change: Some of the things that have been talked about.
Speaker Change: Perhaps half of that a little less than half of that could be at risk as an example.
Speaker Change: We've looked about 3% of our goods today in our stores come from China. So a fair a very small amount.
Speaker Change: And that is all of that is general merch, specifically kind of phone Chargers.
And things like that and we thank everyone would be impacted similarly, so we don't see a big issue with that.
There's just so much unknown around what's actually going to happen Bonnie that for US. It's early days and we have started to consider some things.
Speaker Change: But but we don't see anything at this time that we think is going to overly impact us and.
Speaker Change: What we hope is that.
Speaker Change: The consumers around the world can inflation goes down and folks can can start to feel better about their disposable incomes, but we don't know what's going to happen.
Speaker Change: Bear enough and thanks for the color.
Speaker Change: Fair enough and thanks for the color.
Yeah.
Speaker Change: Your next question comes from Anthony Bonadio with Wells Fargo. Your line is now.
Your next question comes from Anthony <unk> with Wells Fargo. Your line is now open.
Speaker Change: Yeah, hey, good morning guys. Thanks for taking my question. I just wanted to follow up on TOTAL. You called out a $158 million benefit to EBITDA from M&A in the quarter, but it looks like that is gross of a $30 million, $38 million one-time benefit related to that fuel supply re-negotiation. So one, am I thinking about that letter piece correctly? And two, can you just help us understand where TOTAL is not running versus that initial $500 million EBITDA run rate when you guys know how to deal?
Speaker Change: Yeah, Hey, good morning, guys. Thanks for taking my question I just wanted to follow up on that hotel you called out a $158 million benefit to EBITDA from M&A in the quarter, but it looks like that is gross of a $30 million $38 million one time benefit relate.
Speaker Change: Related to that fuel supply renegotiation.
Speaker Change: One am I thinking about that latter piece correctly and.
And two can you just help us understand.
<unk> hotel is not running versus that initial $500 million EBITDA run rate when you guys announced the deal.
Speaker Change: So your reading is correct.
Speaker Change: So youre already that is correct.
Speaker Change: and 38 million are related to previous quarter and when you look at the total energy and where we stand compared to our goal of five and what we feel pretty good there. Now that you know this fuel supply agreement has been out there really negotiated so yeah plus the synergy that we mentioned earlier we are very confident that we will deliver what we said on this acquisition.
Speaker Change: And $38 million.
Speaker Change: Related to previous quarter, and when you look at the total in energy and where we stand compared to.
Speaker Change: Our goal of 500, we feel pretty good there.
Speaker Change: Now that these are students who play agreement.
Speaker Change: I would say.
Speaker Change: Renegotiated so.
Plus the synergies that we mentioned earlier, we are very confident that <unk> will deliver what we said on the <unk> acquisition.
Speaker Change: Thanks, guys.
Speaker Change: Your next question comes from Bobby Griffin with Raymond James. Your line is now open.
Speaker Change: Your next question comes from Bobby Griffin with Raymond James Your line is now open.
Bobby Griffin: Good morning, everybody. Thanks for taking the questions. Al, it's just curious on the quarter to date improvement. I'm just curious, how do you guys look at the environment? As the environment stabilized, there's a lot of noise between hurricanes. Some of the initiatives you guys are doing. And when you saw the quarter to date improvement, was it broad-based across categories and regions? Any additional color you can offer there would be helpful.
Bobby Griffin: Good morning, Brian Thanks for taking the questions. Alex just curious on the quarter to date improvement I'm. Just curious how do you. How do you guys look at the environment as the environment stabilized because theres a lot of noise between hurricane and some of the initiatives you guys are doing and when you saw the quarter to date improvement was it broad based across categories and regions any additional color you can.
Offer there would be helpful.
Speaker Change: Yeah, I think...
Speaker Change: Yes, I think.
Speaker Change: We think the consumer remains under stress. I think we feel like we're getting better and executing better. It is pretty broad-based across our business units of the improvement. We always have different business units performing at different levels and different pockets of strength and weakness, but holistically it is broad-based. We believe the consumer remains under pressure and we believe we're executing better both operationally. And in our 10 for the win initiatives. And we've talked to you guys a long time about our data and our journey and we are getting better at understanding our data and understanding our customers and we think we're seeing the benefit of that.
Speaker Change: We think the consumer remains under stress I think we feel like we're getting better and executing better it is pretty broad based across our business units.
The improvement.
Speaker Change: We always have different business units performing at different levels in different pockets of strength.
Speaker Change: Weakness, but holistically. It is broad based we believe the consumer remains under pressure.
Speaker Change: We believe we're executing better both operationally.
Speaker Change: And in our 10 for the win initiatives and.
Speaker Change: We've talked to you guys, a long time about our data and our journey and we are getting better at understanding our data and understanding our customers and we think we're seeing the benefit of that.
Speaker Change: Thank you. Have a great holiday to you and the team.
Speaker Change: Thank you have a great holiday to you and the team.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: Ladies and gentlemen, as a reminder, should you have a question, please press star 1. Your next question comes from John Zamporro with Scotiabank. Your line is now...
Speaker Change: Ladies and gentlemen, as a reminder, should you have a question. Please press star One. Your next question comes from Jon <unk> with Scotia Bank. Your line is now open.
Speaker Change: Thank you very much. Good morning. I wanted to ask about the fuel side of a business in particular states or volumes. Those turned positive in Canada and Europe . It's still all negative in the US, even adjusting for, I think it's at 70 base.
Speaker Change: Thank you very much good morning.
Speaker Change: Want to ask about the fuel side of the business in particular same store volumes.
Speaker Change: Those turned positive in Canada, and Europe, but still negative in the U S. Even adjusting for I think you'd said 70 basis points.
Speaker Change: from the hurricane. And I wonder what you might attribute that to is there's still an element of partial fill-ups from customers and would you characterize the U.S. field market as any more or less competitive than Canada and Europe .
Speaker Change: From the Hurricane and I Wonder what you might attribute that to is there still an element of partial fill ups from customers and would you characterize the U S. Steel market is any more any more or less competitive than Canada and Europe at the moment.
Speaker Change: I think as price comes down we always see fill go up and that's what we're seeing prices coming down and we are seeing average fill rate go up but the consumer remains stressed and I think trips I think they're being very cautious in their trips in their travel they're reducing travel you know demand remains under pressure. The US remains a very competitive fuel market for sure so you know we think demand will continue to decline in the you know the United States due to you know vehicle efficiency in the fleet and and we have got to take share and where we're focused on doing that is really in three areas you heard leap I mentioned our focus on B2B we shared that in 10 for the win. We are accelerating that I think we feel positive our growth this quarter was more than our growth last quarter we have strong ambitious were ambition there and we're largely meeting our target for this year we have a new pricing tool that we're rolling out right now. That we feel really good about we tested very heavily that we think will help us gain some share and and then the third thing is in our circle is really understanding where that value sits that drives additional trips and will allow us to take share and as we collect more data and get more folks signed up we believe that should help us take share so those are kind of our three big focus areas but demand in the US remains under pressure.
Speaker Change: I think as price comes down we always see Phil go up and Thats. What we are seeing prices coming down we are seeing average fill rate go up.
But the consumer remains stressed.
Speaker Change: I think trips I think they are being very cautious in their trips and their travel they're reducing travel.
Speaker Change: Demand remains under pressure.
Speaker Change: <unk> remains a very competitive fuel market for sure so.
Speaker Change: We think demand will continue to decline in the United States due to.
Speaker Change: Vehicle efficiency in the fleet.
Speaker Change: And we have got to take share and where we're focused on doing that is really in three areas you heard Philippe mentioned and our focus on <unk>, we shared that in turn for the win we are accelerating that I think we feel positive our growth. This quarter was more than our growth last quarter, we have strong ambitious ambition, there and we're largely meeting our target for <unk>.
Speaker Change: This year, we have a new pricing tool that we're rolling out right now, but we feel really good about we tested very heavily that we think will help us.
Speaker Change: Gained some share.
Speaker Change: And then the third thing is inner circle is really understanding where that value sits that drives additional trips and will allow us to take share and as we collect more data and get more folks signed up.
We believe that should help us take share. So those are kind of three big focus areas, but demand in the U S remains under pressure.
Speaker Change: Okay, appreciate the color. Thank you.
Speaker Change: Okay I appreciate the color. Thank you.
Speaker Change: I know for the questions that this time I will now turn the call over to management for closing remarks.
Speaker Change: There are no further questions at this time I will now turn the call over to management for closing remarks.
Speaker Change: Thank you, Alex and Philippe. That covers all the questions for today's call. Thank you all for joining us. We wish you a great day and look forward to discussing our third quarter 2025 results in March.
Speaker Change: Thank you Alex and Philippe that covers all the questions for today's call. Thank you all for joining US we wish you a great day and look forward to discussing our third quarter 2025 results in March system F&I Conference digital new programs that are already at that meeting it was negative.
Speaker Change: That could happen to show on <unk> within <unk>, if I may think comments questioning does that make 90 damage faster that better.
Speaker Change: Thank you very much.
Speaker Change: Thank you everyone.
Speaker Change: Ladies and gentlemen, this is your conference call for today. We thank you for participating and I say please disconnect your loss.
Ladies and gentlemen, thank you because your conference call for today, we thank you for participating and ask that you. Please disconnect your lines.