Q2 2025 Alimentation Couche-Tard Inc Earnings Call

Good morning. My name is Joel and I will be your conference operator today. Bonjo. I will now introduce Mister Mattie Brunette, vice president, Investor relations and treasury at Arrimata Cristal mayna Matthieu Brune, Vice President rear.

Joelle: Good morning, my name is Joëlle, and I will be your conference operator today.

Joelle: Bonjour, je m'appelle Joëlle et je serai votre opératrice pour la conférence d'aujourd'hui.

Mathieu Brunet: I will now introduce Mr. Mathieu Brunet, Vice President, Investor Relations and Treasury at Alimentation Couche-Tard. Je vais maintenant passer la parole à Monsieur Mathieu Brunet, Vice Président, Relations Investisseurs et Trésorerie pour Alimentation Couche-Tard.

English will follow.

Mojo links.

Mathieu Brunet: Hello.

Mathieu Brunet: First, I would like to welcome you to the teleconference that will discuss the financial results of the second quarter of the 20-25 exercise on Alim Couche-Tard. All links will be placed discreetly in order to avoid any unnecessary noise. Following the presentation, we will respond directly to the analysts' questions.

And I spent that up so that.

Mathieu Brunet: We would like to remind you that this webcast will be available on our website for a 90-day period. In addition, please note that some of the topics discussed during this webcast could be prospective statements provided by the Society with the usual warnings. These warnings or risks, as well as their uncertainties, are described in our financial reports. It is therefore possible that our future results may differ from the information presented today.

The prospective is on for a bit so I have 9662 so the kill.

Monsieur Alex Miller, his direction.

Mathieu Brunet: The financial results will be presented by Mr. Alex Miller, President and Head of Direction. and Mr. Filipe da Silva, Chief Financial Officer.

If I miss Philippe de Silva, chef.

Good morning. I would like to welcome everyone to this web conference presenting Elimata Santa's financial results for the 2nd quarter of fiscal year 2025. All limes will be kept on mute to prevent any background noise. After the presentation, we will answer questions from analyst, asked live during the web conference.

Alex Miller: Good morning.

Alex Miller: I would like to welcome everyone to this web conference presenting Alimata Soncochtal'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 analysts asked live during the web conference. We would like to remind everyone that this webcast presentation will be available on our website for a 90-day period. 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 or risks and uncertainties are outlined in our financial reporting.

We would like to remind everyone that this, this webcast presentation will be available on our website for a 90 day period.

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.

Alex Miller: Therefore, our future results could differ from the information discussed today.

Our financial results will be presented by Mr. Alex Miller, president and chief executive officer, and Mr. Felipe de Silva, Chief Financial Officer.

Alex Miller: Our financial results will be presented by Mr. Alex Miller, President and Chief Executive Officer, and Mr. Filipe da Silva, Chief Financial Officer.

Alex, you may begin your conference.

Alex Miller: Alex, you may begin your conference.

Thank you, Matthew. Good morning everyone and thank you for joining us for our presentation of our 2nd quarter results.

Mathieu Brunet: Thank you, Mathieu.

Alex Miller: Good morning, everyone, and thank you for joining us for our presentation of our second quarter results. 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. Fuel margins also remained healthy across the network. Throughout the quarter, we focused relentlessly on providing value to our customers, including introducing bundle meal deals in the U.S., expanding our private brand offer at affordable price points.

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. In our European markets, most categories perform positively, as did fuel volumes in Europe and Canada.

Fuel margins also remained healthy across the network.

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.

And continuing popular fuel day promotions.

Alex Miller: and Continuing Popular Fuel Day Promotions. Later in this presentation, I will go into more detail on these initiatives as well as on our convenience and mobility results.

Later in this presentation, I will go into more detail on these initiatives as well as on our convenience and mobility results.

However, before I do so, I will touch on two notable area areas of the quarter. The catastrophic hurricanes in the US.

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 organically.

And our global efforts to grow the network both through M&A and organically.

I want to start off by acknowledging the heroic work of our teams across the Southeastern US who had to contend with two major hurricanes, Hurricane Helene and Hurricane Milton, which impacted 4 of our business units within 2 weeks of each other. The hurricane shut down hundreds of our stores, mainly due to power loss.

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 services.

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 services.

This took massive coordination and outstanding dedication by thousands of team members.

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 community.

And I could not be more proud of how, as one team, they helped each other and our customers and communities.

I also want to briefly mention our ongoing commitment to acquire 7 and I Holdings.

Alex Miller: I also want to briefly mention our ongoing commitment to acquire 7&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. We continue to see a strong opportunity to grow together and enhance our offerings and service to millions of customers across the globe. We also remain confident in our ability to finance and complete this combination. 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.

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.

We continue to see a strong opportunity to grow together and enhance our offerings and service to millions of customers across the globe.

We also remain confident in our ability to finance and complete this combination.

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.

While discussing M&A, let me briefly mention the good progress we are making with Gecko, which we expect to close in calendar 2025.

Alex Miller: While discussing M&A, let me briefly mention the good progress we are making with GetGo, which we expect to close in calendar 2025. I and members of the executive team spent a very productive few days with the GetGo management and employees in September, visiting stores and facilities. We are excited about our early learnings about GetGo's extremely popular food and loyalty programs. and dedicated team members.

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 geos extremely popular food and loyalty programs.

And dedicated team members.

We also recently completed a small tuck-in purchase agreement in the US with 20 stores in Oklahoma and Kansas. Bringing our Circle K 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.

Moving to Europe, we are pleased with the ongoing work with our 4 new business units as they successfully transition out of a complex carve out with total energies.

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. In organic 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. As part of our strategic growth ambition, our new stores include dozens of high-speed diesel and rural locations.

The teams are highly energized and engaged and are making good progress with store rebranding and integration plans.

In organic 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.

As part of our strategic growth ambition, our new stores include dozens of high-speed diesel and rural locations.

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. Compared to 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. As I mentioned earlier, in our European businesses, most categories perform positively, with same-store sales increasing by 1.8%. However, the overall Europe and other region results were again impacted by weak results in our Hong Kong market, driven by a decrease in cigarette units and increased sales tax. 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 forecourts.

Compared to 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.

As I mentioned earlier in our European businesses,

Most categories perform positively, with same store sales increasing by 1.8%.

However, the overall Europe and other region results were again impacted by weak results in our Hong Kong market, driven by decrease in cigarette units and increased sales taxes.

In the US we launched our $3.04 dollars, and $5 meal deals.

Alex Miller: 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 300,000 meals are being sold on a weekly basis, accelerating traffic and unit growth. 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 QSRs. 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.

We are encouraged by early results. After only 6 weeks, over 300,000 meals are being sold on a weekly basis. Accelerating traffic and unit growth.

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 QSRs.

We're also providing value through an expanding array of private private label products which are increasingly popular with customers looking for savings, but still wanting good quality and taste.

Private 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: Private 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. 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 $0.40 per gallon. With the holidays being full of busy celebrations and cost, we are proud to offer our customers a meaningful way to save. This quarter, we also grew our loyalty membership programs in the U.S.

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 US participating in the Circle K fuel day, offering a Thanksgiving discount of up to 40 cents per gallon.

With the holidays being full of busy celebrations and cost, we are proud to offer our customers a meaningful way to save.

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.

Alex Miller: and Europe. In the U.S., inner circle registrations and full enrollments reached 8.3 million fully enrolled customers, representing a 12 percent 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 signup process to drive even greater signup conversion. We are also linking our EasyPay Fuel program with InnerCircle to unlock additional benefits to our customers and provide a more frictionless single card experience. 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.

We continue to see a sales lift through increased pers 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 conversion.

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.

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 scale it across Sweden and additional countries in Europe.

Alex Miller: In Sweden, the recently launched Xtra 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. 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 in dispensed beverages, the compelling value did once again compress margins this quarter. 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 ongoing efforts to drive value through singles and capitalized on favorable industry trends, particularly growing customer enthusiasm for Mexican imports.

In the US, are popular summer beverage campaign continued into the beginning of this quarter. While it provided exceptional value and exciting exclusive flavors.

Leading the unit growth in dispensed beverages, the compelling value you did once again compress margins this quarter.

In the adult beverage category, we experience continued momentum with sales slightly down compared to the prior year, while unit velocity showed growth.

This performance reflected ongoing efforts to drive value through singles and capitalized on favorable industry trends.

Particularly, particularly growing customer enthusiasm for Mexican imports.

Starting at the beginning of the quarter, following a change in legis 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: 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 in a timely manner. We now command an impressive market leadership in beer sales in Ontario. 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.

To take full advantage of this opportunity. Our team carefully allocated the proper space in a timely manner. We now command an impressive market leadership in beer sales in Ontario.

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.

We also continued personalization programs for our age verified customers.

Alex Miller: We also continued personalization programs for our age-verified customers. and other nicotine products, strong growth continues across the U.S. and Europe.

In other nicotine products, strong growth continues across the US and Europe.

Moving to our fuel business.

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 in those two major hurricanes, while it increased by 0.1% in Europe and in other regions, and by 0.5% in Canada. 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. Our 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 in Sweden and early wins in the new mid-European market.

Same store road transportation fuel volumes decreased by 2.2% 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 Europe and in other regions, and by 0.5% in Canada.

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.

Our Europe B2B fuel business had a solid 2nd 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 in Sweden and early wins in the new mid-European markets.

In fleet, we continue to focus on developing our customers portfolio.

Alex Miller: In Fleet, we continue to focus on developing our customer portfolio. 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 InterCircle, and expand our reach by developing and implementing strategic partnerships.

The B2B fuel share in the US 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.

Our EV fast charging network in Europe now consists of over 2900 charge points.

Alex Miller: Our EV fast-charging network in Europe now consists of over 2,900 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. We also continue to expand the charging network in the mid-European markets as well as in Ireland.

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.

We also continue to expand the charging network in the mid-European markets, as well as in Ireland.

In North America, we continued with the discipline approach to network expansion.

Alex Miller: In North America, we continued with a disciplined approach to network expansion. 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 via store surveillance systems. We are also looking to expand our gig worker partnership to improve our food program execution and grow our sales.

I also want to mention some of the work that we are doing to improve operational excellence, reinforcing our approach is 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 via store surveillance systems.

We are also looking to expand our gig worker partnership to improve our food program execution and grow our sales.

Felipe will provide additional color on our cost management, including our fit to serve initiatives.

Alex Miller: Filipe will provide additional color on our cost management, including our fit-to-serve initiatives. 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 competent 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.

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 competent in the strength of our globally diversified network and long-term strategy and our, and our encouraged by signs of positive momentum in parts of the business in both convenience and fuel.

And with that, I'll turn it over to Felipe.

Filipe Silva: And with that, I'll turn it over to Filipe.

Thank you Alex. Good morning, everyone.

Filipe Silva: Thank you, Alex.

With a little over a year in my role as CFO I witnessed this resident organization tackle significant challenges from Levity interest rates, high inflationary pressures,

Filipe Silva: Good morning, everyone. With a little over a year in my role at CFO, I've witnessed this resident organization tackle significant challenges, from elevated interest rates, high inflationary pressures, and disruptive supply challenges impacting our global network. I'm impressed of how we have come together to overcome some of this headwind. delivering solid revenue growth as we continue to integrate our recent acquisitions and gain market share in key categories. Throughout the second quarter, we saw sequential monthly improvement, particularly in the U.S., thanks to merchandise revenue, and I'm encouraged by this positive momentum as we enter the third quarter.

And this surly challenges impacting our global network.

I'm impressed of how we have come together to overcome some of these headwinds.

Delivering solid revenue growth as we continue to integrate our recent acquisitions and gain market share in key categories.

Throughout the 2nd quarter, we saw sequential monthly improvement, particularly in US.

Since the merchandise revenue and encouraged by this input momentum as we enter the 3rd quarter.

However, as Alex mentioned earlier, it's worth noting that the hurricanes affected our performance during the quarter on both our merchandise revenue and food volumes.

Filipe Silva: However, as Alex mentioned earlier, it's worth noting that the hurricanes affected our performance during the quarter on both our merchandise revenue and food volumes sold. Excluding this impact, we estimate that U.S. same-store merchandise revenues would have aligned closer to our Q1 results. In addition, our focus on operational excellence and discipline cost management drove a modest 2.3% of normalized growth in expenses. enabling us to outpace a slowing inflationary environment. We are also pleased to see impressive results coming from our Feed to Serve initiative. further enhancing our world-class cost culture and efficient approach to spending. More specifically, we continue to leverage our size and scale and data-driven...

So.

Excluding this impact, we estimate that US store merchandise revenues would have aligned closer to our Q1 results.

In addition,

Our focus on operational excellence and discipline cost management role, a modest 2.3% of normalized growth in expenses.

Enabling us to outpace a slowing inflationary environment.

We are also pleased to see impressive results coming from our feet to serve initiatives.

Further enhancing our world class culture and efficient approach to spending.

More specifically, we continue to leverage our size and scale and data driven.

Approach to my cost.

Filipe Silva: Special thanks to the Advisory Board for the video! With regards to our store operations, we continue to improve labor management and reducing utility consumption while advancing our global capability network. All of these initiatives are contributing to improved operational efficiency.

Across our network and store operations as we continue to invest in technology.

This includes more efficient marketing, repair and maintenance and renegotiating financial fees.

With regards to our store operations, we continue to improve labor management and reducing utility consumption while advancing our global capability networks.

All of these initiatives are contributing to improved operational efficiency.

I will, I will now go over some key figures for the porter. For more details, please refer to our MDNA available on our website.

Filipe Silva: I will now go over some key figures for the quarter. For more details, please refer to our MDNA available on our website. For the second quarter of fiscal 2025, net earnings attributable to shareholders of the corporation were nearly $709 million, or $0.75 per share, on a diluted basis. Excluding certain items described in more detail in our MD&A, adjusted net earnings attributable to shareholders of the corporation were approximately $705 million or $0.74 per share on an adjusted diluted basis, representing a decrease of 9.8% compared with the corresponding quarter of last year. During the second quarter, excluding the net impact from foreign currency translation, merchandise and service revenues increased by approximately $272 million, or 6.6%.

For the 2nd quarter of fiscal 2025, net earnings attributable to shareholders of the corporation where nearly $709 million or 75 cents per share on a daily basis.

Excluding certain items described in more detail in our MDNA.

Adjusted net earnings attributable to shareholders of the corporation where approximately $705 million or 74 cents per share on an adjusted diluted basis, representing a decrease of 9.8% compared with the corresponding quarter of last fiscal year.

During the 2nd quarter, excluding the net impact from foreign currency translation.

Merchandise and service revenues increased by approximately $272 million or 6.6%.

Primarily attributable to the contrition from acquisition, which amounted to approximately $329 million partly offset by softness in traffic.

Filipe Silva: primary attributable to the contribution from acquisition which amounted to approximately 329 million dollars partly offset by shortness in traffic. Excluding the net impact from foreign currency translation, merchandise and service gross profit increased by approximately 76 million dollars or 5.3%. This is primarily due to the contribution from acquisitions, which amounted to approximately $1 over $9 million, partly offset by softness in traffic. In the United States, our merchandise and service gross margin decreased by 1% to 33.8%, impacted by the promotional efforts to support our ongoing campaigns. While it increased by 0.4% in Canada to 33.6%, impacted favorably by a change in product mix.

Excluding the net impact from foreign currency translation.

Merchandise and semi gross profit increased by approximately $76 million or 5.3%.

This is primarily due to the contribution from acquisitions, which amounted to approximately $109 million partly offset by softness in traffic.

In the United States are merchandizing and growth, some gross margin decreased by 1% to 33.8%.

impacted by the promotional 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 politics

In Europe and other regions are merchandise and service gross margins decreased by 0.4% to 38.2%.

Filipe Silva: In Europe and other regions, our merchandise and service gross margin decreased by 0.4% to 38.2%, impacted by the integration of certain retail assets from Total Energy, which have a different product mix than our other operations in Europe and other regions. excluding this impact, our gross margin in Europe and other regions will have increased by 2.1%. driven by a favorable change in product mix from lower CIGA revenues in Asia. 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 gross profit increased by approximately $128 million, or 8.8%.

Impacted by the integration of certain retail assets from total energy.

Which have a different product mix than our other operations in Europe and other regions.

Excluding this impact our gross margin in Europe and other regions will have increased by 2.1%.

Driven by a favorable change in product mix from lower ciga revenues in Asia.

Moving on to the fuel side of our business.

In the 2nd quarter of fiscal 2025, excluding the net impact from foreign currency translation.

Road transportation, fuel gross profit increased by approximately 1 or $28 million or 8.8%.

This is mainly attributable to the contribution from acquisitions which amounted to approximately $181 million including the favorable impact from the renegotiation of the fuel supply agreement with the vendor.

Filipe Silva: This is mainly attributable to the contribution from acquisitions, which amounted to approximately $181 million, including the favourable impact from the renegotiation of the fuel supply agreement with the vendor, of which $38 million is related to previous quotas. partly offset by the decline in road transportation through gross margin in the United States. Our road to transportation fuel gross margin was 46.1 cents per gallon in the United States, a decrease of 3.46 cents per gallon, a healthy margin in a competitive and well-supplied market environment, and in Canada it was 13.35 cents Canadian per liter. a decrease of 0.28 cents Canadian per litre.

Of which $38 million is related to previous quarters, partly offset by the decline in road transportation to gross margin in the United States.

Our road to transportation through gross margins was 46.1 cents per gallon in the United States.

A decrease of 3.46 cents per gallon. The healthy margin in a competitive and well supplied market environment. And in Canada, it was 13.35 cents per liter.

A decrease of 0.28 cents per liter.

In Europe and other 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 road transportation through gross margin of 0.88 0.88 cents US per liter, partly offset by the impact of the change in our world sales activities.

Filipe Silva: In Europe and other regions, it was $0.1051 US per litre, an increase of $0.31 US per litre, impacted by the retroactive adjustment, which had a favorable impact on road transportation through gross margin of $0.88 US per litre, partly offset by the impact of the change in our world sales activity.

Now looking at HGNA for the 2nd quarter of fiscal 2025, normalized operating expenses, increased by 2.3% year over year.

Filipe Silva: Now looking at SG&A. For the second quarter of fiscal 2025, normalized operating expenses increased by 2.3% year-over-year. This is mainly driven by inflationary pressures and incremental investment to support our strategic initiatives.

This is mainly driven by inflationary pressures and incremental investment to support our strategic initiatives.

So you said by the ongoing import to control our expenses, including labor efficiency in our stores.

Filipe Silva: partly offset by the ongoing effort to control our expenses, including labor efficiency, in our. More specifically, we reduce store administration through refined protocols and increased back-office automation. US Store Associates overtime costs were reduced just as we have also achieved an improvement in manager overtime spent in the first half of FY 2021.

More specifically, we reduce store administration through refined protocols and increased back of these automation.

US Sto associates overtime costs were reduced just as we have also achieved an improvement in manage over time spent in the first half of FY 25.

Excluding specific items described in more details in our own DNA. The adjusted APDA for the 2nd quarter of fiscal 2025 increased by just over $36 million or 2.4%.

Filipe Silva: Excluding specific items described in more detail in our MDMA, the adjusted APDA for the second quarter of fiscal 2025 increased by just over $36 million, or 2.4%, compared with the corresponding quarter of fiscal 2024, mainly due to the contribution from acquisitions, which amounted to approximately $158 million, partly offset by lower road transportation fuel gross margin and investment in merchandise and service gross margin in the United States, as well as by the softness in traffic and fuel demand, as low-income consumers remain impacted by challenging economic From a tax perspective, the income tax rate for the second quarter of fiscal 2025 was 23.4% compared with 22.8% for the corresponding period for fiscal 2024.

Compared with the corresponding quarter of fiscal 2024, mainly due to the contribution from acquisitions, which amounted to approximately $158 million. But you said by lower road transportation to gross margin and investment in merchandise and service gross margin in the United States, as well as by the softness in traffic and fuel demand as low-income consumer women remain impacted by challenging economic conditions.

From the tax perspective, the income tax rate for the 2nd quarter of fiscal 2025 was 23.4% compared with 22.8% for the corresponding period for fiscal 2024.

The increase mainly stems from the impact of a different mix in our earnings across the various jurisdictions in which we operate.

Filipe Silva: The increase mainly stems from the impact of a different mix in our earnings across the various jurisdictions in which we operate.

As that October 13, 2024, we recorded a return on equity at 19.1% and our return on capital employed stood at 12.3%.

Filipe Silva: As of October 13, 2024, we recorded a return on equity at 19.1%, and our return on capital employed stood at 12.3%. 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 in cash and an additional $2.7 billion available for our main revolving credit.

And an additional $2.7 billion available for our main revolving credit facility.

During the 2nd quarter of fiscal 2025, we will purchase 8.7 million shares for an amount of nearly $590 million.

Filipe Silva: During the second quarter of fiscal 2025, we will purchase 8.7 million shares for an amount of nearly $519 million. 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 unfavorable fair value of nearly $52 million of settlement.

We also repaid our Canadian dollar denominated senior unsecured note for $700 million Canadian and settle the cross currency interest rate swaps associated with the notes, which are an informable fair value of nearly $52 million of settlement.

On August 16, 2024, we entered into a binding agreement to acquire.

Filipe Silva: On August 16, 2024, we entered into a biding agreement to acquire 270 company-owned and operated convenience retail and fuel sites operating under the Getco cafe. plus market brand from Supermarket Retail, Giant Ingold Inc. for a purchase price of approximately $1.6 billion. subject to post-closing adjustment. GetGo sites are located in the United States of Indiana, Maryland, Ohio, Pennsylvania, and West Virginia in the United States of America. The transaction, which would be financed using our valuable cash and all existing credit facilities, 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.

270 company-owned and operated convenience retail and fuel site operating under the Geo Cafe.

Plus Market brand from supermarket retail, Giant Eagle Inc. for a purchase price of approximately 1.6 billion.

subject to post closing adjustments.

Get those sites are located in the in the state of Indiana, Maryland, Ohio, Pennsylvania, and West Virginia in the United States.

The transaction, which would be financed using our valuable cash and our existing credit facilities, 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.

Turning now to the dividend, the board of directors declared yesterday a quarterly dividend of 19.5 cents per share, an increase of 911.4% for the second quarter of fiscal 2025 to shareholders on record as of December 4, 2024 and approve this payment effective December 18, 2024.

Filipe Silva: Turning now to the dividend, the Board of Directors declared yesterday a quarterly dividend of $0.195 Canadian per share, an increase of 11.4% for the second quarter of fiscal 2025 to shareholders on record as of December 4, 2024, and approved this payment effective December 18, 2024. With that, let me reiterate a few key points. We are maintaining solid momentum as we are into the third quarter, with cautious optimism about the macro environment and consumer outlook. We continue to gain market share in key categories and capitalize on our recent acquisitions while maintaining operational excellence. 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.

With that, let me reiterate a few coupons.

We are maintaining solid momentum as we head into the 4th quarter with cautious optimism about the macro environment and consumer outlook.

We continue to gain market share in key categories and capitalize on our recent acquisition while maintaining operational excellence.

We are focused on pursuing growth opportunities, leveraging a strong balance sheet and maintaining a discipline capital deployment to support a proven long-term goal of creating value for our shareholders.

I thank you all for the attention. I will turn the call over again to our president and CEO Alex Miller.

Filipe Silva: I thank you all for the attention.

Alex Miller: I will turn the call over again to our president and CEO, Alex.

Thank you, Felipe.

With the many economic challenges across the globe. These are not easy days for our customers.

Alex Miller: Thank you, Filipe. With the many economic challenges across the globe, these are not easy days for our customers.

As we are on the eve of Thanksgiving in the US. I just want to close by saying thank you.

Alex Miller: 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. Thank you to our valued customers for visiting us and seeing firsthand our efforts to provide you with compelling offers. Also want to thank our shareholders for your continued support of the business. 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 open.

Thank you to our store and field team members for your commitment to making our customers' lives a little easier every day.

Thank you to our valued customers for visiting us and seeing firsthand our efforts to provide you with compelling offers.

Also want to thank our shareholders for your continued support of the business.

For all of you in the US I hope you have a wonderful Thanksgiving, filled with family and friends. And if you need any last minute items for fuel to get to your destination. Come visit our locations as we are open.

On that note, let's turn it over to the operator to answer analyst questions.

Operator: On that note, let's turn it over to the operator to answer analyst questions.

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 touchstone phone.

Operator: Thank you.

Operator: 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 a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the one on your touchtone phone.

You will hear a prompt that your hand has been raised. Should you wish to decline from the pulling process, please press star followed by the 2.

If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please for your first question.

Operator: If you are using a speakerphone, please lift the handset before pressing any button.

Your first question comes from Michael Vanice with TD Cowan. Your line is now open.

Michael Van Eest: One moment please for your first question. Your first question comes from Michael Van Eest with TD Cowan. Your line is now open.

Thank you and good morning um.

Question first on uh the same for sales performance in the US, um, and the promotional activity that came along with it at the same time, um, I think last quarter you talked about higher levels of promotional activity and that was gonna be limited to Q2, but we saw that again in Q3, um, can you talk about how

Alex Miller: Thank you and good morning. Question first on the Samespare sales performance in the U.S. and the promotional activity that came along with it at the same time. I think last quarter you talked about higher levels of promotional activity. going to be limited to Q2, but we saw that again in Q3. Can you talk about how... You know, I guess why the promotional activity was extended and it wasn't any different, and then, you know, was that directly... tied to the improved performance on the same sort of sales as you exited, as you went through Q2, and if you're positive heading into Q.

You know, I guess why the promotional activity was uh extended and, and it wasn't any different and then, you know, was, was that directly.

Tied to the improved performance, uh, uh, on the same sort of sales as you exited as you went through Q2 and and if you're positive heading into Q3.

Yeah, sure and thanks for the question, um, our plans had, uh, 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, uh, continued through a fairly sizable chunk of this last quarter, um, those have now ended. I think we're getting increasingly better uh with our data sets, uh, increasingly faster, understanding our promotions as a result, we have shut down.

Alex Miller: 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 sizable chunk of this last quarter.

Alex Miller: 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're 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.

Um, quite a few promotions, uh, activity, and we're seeing the results of that, uh, over the last 8 weeks, or the 1st 8 weeks of, of this quarter and it looks like the things that we're doing are working, uh, so I think I think you'll see a difference.

Uh, going forward and we feel really good about the traffic we drove, the unit growth we drove, the value we showed, uh, and now we're pivoting uh to our meal deals.

Uh, those are being really well received. They're growing exponentially week on week, and we believe we've just scratched the surface, uh, the margin profile of those meal deals are more attractive than what we were doing over the summer, uh, and again, I think we're encouraged by the 1st 8 weeks of this quarter.

Alex Miller: They're growing exponentially week on week, and we believe we've just scratched 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.

OK, great, thank you and can you just quantify the impact of the hurricanes, um, as a follow up.

Alex Miller: Okay, great. Thank you.

Alex Miller: And can you just quantify the impact of the hurricanes as a follow-up?

We pay?

Yeah, it's, it, it, it was a, uh, we estimate that the impact of roughly 40 basis points in our uh same store sales uh in US.

Filipe Silva: Lupe? Yeah, it was, we estimated the impact of roughly 40 basis points in our same store sales in US. And that's for the merch. And for the volume, actually, to estimate that at a 70 basis point of view.

And uh that for the merch and for the, the, the volume actually to estimate that at 70 basis points actually.

OK, and, and, and I'm not sure how I answered this, but, um, heading into Q3 was same store sales in the US positive.

Filipe Silva: And I'm not sure Alex answered this, but heading into Q3, was same-store sales in the U.S. positive? First eight weeks was good.

1st 8 weeks look good.

Yeah, yeah.

OK, thank you very much.

Filipe Silva: Yeah, yeah.

Your next question comes from Mark Petrie with CIBC. Your line is now open.

Mark Petrie: Your next question comes from Mark Petrie with CIBC, your line is now open. Yeah, thanks.

Yeah, thanks, good morning, um, I, I guess I, I wanted to ask mostly about um.

Filipe Silva: Good morning. I guess I wanted to ask mostly about... 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 business?

About the cost control initiatives, obviously Q1 was a little bit of an aberration with regards to the organic SGNA increase that came under.

Uh, or that I, I guess, sort of, you know, 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 uh of the business.

Yeah, I, and thank you for, for the question. Um, yeah, as, as we, you know, we mentioned uh uh uh a few times, uh, you know, uh, um, our, our mid-long term goal is always to beat inflation by, by 1%. So quarter to quarter, you, you, as we have seen in, in a, in a Q1, uh, we are the, you know, some impact related to the investment that we are doing in some parts of the business and here in that case was the technology. Um, uh, but

Filipe Silva: Yeah, hi, and thank you for the question. Yeah, as we mentioned a few times, our mid-long-term goal is always to beat inflation by 1%. So quarter to quarter, as we are seeing in Q1, we had some impact related to the investment that we are doing in some part of the business. And here, in that case, was technology. But when we look at the overall cost, we feel pretty good about our feed-to-serve initiatives. We have mentioned that earlier in the call, but we see a lot of good stuff happening in-store. So for example, to provide some more data, we have used 3% less hours than last year in-store.

When we look at, uh, you know, the overall cost, we feel pretty good about, you know, our fit to serve initiatives, uh, we, we have mentioned that earlier in the call, but we, we see um, a lot of, uh, um, a good start happening, you know, at in store. So for example, you know, to, to provide some more data.

Uh, we have used a 3, 3% less hours than last year in store. So a lot of it is happening in terms of automation being you, you know, uh, uh, uh, uh streamlining processes, um, uh, continuing with this, uh, easy project, you know, to uh remove back office uh uh um uh task uh from the stores and to put it on the shared services center.

Filipe Silva: So a lot is happening in terms of automation, being streamlining processes, continuing with this easy-office project to remove back-office tasks from the stores and to put it in the shared-time center. We see a lot of, I would say, also good initiative around the GNFR and the centralization of the negotiation on the contract for GNFR. So on the marketing side, electronic payments. So we have gone through some good negotiation to create MasterCard, Visa, routing, Annex, WEX contract. So also a lot of savings coming from there. And finally, also on the global functions, we see cost going down compared to last year.

Um, we see a lot, a lot of, of, uh, I would say also a good initiative around the GNFR and centralization of the negotiation on the contract for GNFR. So on the marketing side, uh, electronic payments, so we have gone through some, uh, uh, you know, uh, a good good negotiation to uh uh to create Mastercard, Visa, routing, uh, A, wax contract, so, uh, also a lot of, uh, um, you know, uh, um, savings coming from there. And

also on the, on the, on the global functions, uh, we see, uh, you know, cost uh going down compared to last year. So that's coming from also the, the centralization, the Chase center that we are, uh, you know, uh, putting in place. Uh, so overall, you see a minis that give us uh a very good comfort that, you know, uh uh in terms of control, uh, uh, cost control, uh, but we'll continue to deliver, uh, you know, that we have this core discipline, uh, uh, in our.

Filipe Silva: So that's coming from also the centralization, the shared-time center that we are putting in place. So overall, you see many initiatives that give us very good comfort in terms of cost control. But we continue to deliver, that we have this co-discipline in our DNA. So we are very confident that the cost will help us to go through this challenging time on the top line.

So yeah, very confident that the cost will help us to, to go through this uh challenging time on, on the, on the top line.

Yeah, OK, that's helpful, thank you, and if I could just follow up on the on the comment earlier with regards to the.

Filipe Silva: Okay, that's helpful. Thank you.

The beverage program through Q2 and and the investment there, um, how did that program perform versus your expectations with regards to both the top line impact and then the net, the net impact.

Filipe Silva: And if I could just follow up on the on the comment earlier with regards to 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? It absolutely grew units, and it grew trips to our stores, which was the intent. The basket associated was 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, um, which is and in group trips to our stores, which was the intent, um, it did not, the basket associated was not what we expected, uh, and as a result of that, uh, it impacted our sales and it impacted our margin. It was about 80% of the margin miss. So, um,

That's, that's the color.

OK, very helpful and sorry I just I didn't actually hear um what you were saying with regards to Q3 and the and the momentum on on Mike's question uh what is Q3 to date positive or when you say improved momentum you just mean not as negative on US merch saves for sales.

Filipe Silva: Okay, very helpful.

Filipe Silva: And sorry, I didn't actually hear what you were saying with regards to Q3 and the momentum on Mike's question. Is Q3 to date positive, or when you say improved momentum, you just. not as negative on U.S. Merchandise. Looks good. It's positive.

Looks good, looks good. It's positive.

Got you thank you all the best.

Thank you.

Filipe Silva: Gotcha, thank you.

Filipe Silva: All the best.

Your next question comes from Irene Natel with RBC Capital Markets. Your line is now open.

Irene Nattel: Your next question comes from Irene Nattel with RBC Capital Markets. Your line is now open.

Thanks and good morning everyone. If we could just turn to Europe for a moment. Um, you know, certainly when, when the assets were required from total, I think you referred to it as sort of a.

Irene Nattel: Thanks, and good morning, everyone. If we could just turn to Europe for a moment, you know, certainly when when the assets were acquired 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?

carve out, which is really what it was. Can you talk about, you know, uh, 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, the circle K programs into uh the total network in Europe and, and how we should think about sort of the rebranding going forward.

Filipe Silva: And are we now at the point where you can actually start putting the Circle K programs into the Total network in Europe, and how we should think about sort of the rebranding going forward?

Yeah.

I, I can if you want that thank you, Irene. You want to take it, Felipe?

Filipe Silva: I can talk if you want. Thank you, Irene.

Yeah, I got you, so, um, on, on the, on, on the integration of total, uh, arena, we, it, it's moving, uh, it's moving at pace. We, we feel very good as you have seen, uh, uh, uh, the, the, the, the, the result on the, on the, on the, on this perimeter is improving quarter over quarter.

Filipe Silva: You want to take it, Filipe? Yeah, I can.

Filipe Silva: 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.

In terms of integration, uh, so we have uh focused a lot of attention in the, in the first quarters, you know, to, to make sure that uh we are integrating in terms of, you know, back office, uh, finance, uh, and that's happening, uh, there, uh, of course, uh, uh, at, we have already started to put in place, uh, you know, a, a pilots uh with our Horizon concept, uh, in, in the format in the 4BU, uh, results are promising there too. Um, so, uh, feeling good about that.

Filipe Silva: Of course, at store level, we have already started to put in place pilots with our Horizon concept in the 4BUs. Results are promising there too. So, I'm feeling good about that.

Um, and, uh, and when we look at, uh, I would say the, the road map for the the synergies, um, of course, it's, uh, uh, you know, it, it takes some time and uh we believe that we'll see the fuller, fuller impact of the synergies, better 2 or 3, but, uh, we see, uh, we are very confident that, you know, both in terms of merchandise, uh, uh, we'll see a, a, a nicer place there, uh, on the, on the cost side also, um, both at the store and corporate level, uh

Filipe Silva: 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 better in 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, feeling good. And the team also, most importantly, have integrated well, starting to share and to get best practice from other parts of the business.

see also, uh, uh, a greater, great synergies coming from there. So overall, we're feeling good, um, uh, and, uh, the team uh also most importantly, uh, uh, are the integrated well, uh, starting to share and to get best practice from other parts of the business. That's something that you know that is very important in our culture. So, so yeah, um, uh, feeling good about, uh, about the, the plan that we are there and the execution so far. Alex, uh, anything that you want to add?

Filipe Silva: That's something that you know that is very important in our culture. So, yeah, feeling good about the plan that we have there and the execution so far.

Alex Miller: Alex, anything that you want to add? Yeah, no, I think, Irene, we've 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.

Yeah, no, um, I think Irene, we've started to retire some of the SLAs. We'll retire a couple more of them by the end of this calendar year. Uh, that realizes cost, uh, synergies, but it also, uh, enables, uh, other synergies as we take over accounting in different functions, so, uh, I think we're encouraged by that the longest pull in the tent is IT and we just finalized our plan, uh, to accelerate that, uh, over the next 24 months and uh excited. So I, I think we're feeling good.

Alex Miller: The longest pole 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.

About, uh, our journey with Total, uh, and hopefully, and, and we, 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.

That's really helpful. Thank you. And then just as a follow up on the Hong Kong piece, recognize it's small. Um, but, you know, any line of sight on on when that that drag uh will serve not be a drag anymore.

Irene Nattel: That's really helpful. Thank you.

Alex Miller: And then just as a follow up on the Hong Kong piece, recognize it's small, but, you know, any line of sight on on when that that drag will sort of not be a drag anymore. 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.

Yeah, I think, uh, Hong Kong.

Hong Kong's doing better, um, but the, the drag of the cigarettes, I mean they basically doubled cigarette prices in 2 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, um, we should cycle that about the end of this fiscal, Irene.

That's great, thank.

Please limit yourself to one question.

Your next question comes from Luke Hannon with Canaccord genuity. Your line is now open.

Luke Hannan: Your next question comes from Luke Hannan with Canaccord Genuity. Your line is now open.

Luke Hannan: Thanks.

Alex Miller: Good morning. I wanted to ask about, you've talked about some of the reverse synergies that you expect to get out of GetGo. 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 synergies? The cafe market concept that they deploy is a holistic food offer with, you know, ordering screens. It's much more like a Sheetz or a Wawa you would see in the market.

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 synergies.

The cafe market concept that they deploy is a holistic food offer with, um, you know, ordering screens, it's much more like a sheet or a wawa, uh, you would see in the market, uh, so it, it is, it's different than anyone we've ever acquired. It's certainly different than our fresh food fast. Um, the fresh products that they bring in from their commissary, um, is robust, uh, very high quality products, um, so again, just a very broad

Alex Miller: 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 underpinned 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.

Wrap of food and fresh products underpinned by supply chain, um, you know, their loyalty flywheel with their grocery stores, uh, and the technology that backs that up is compelling. Uh, if, if you go to those markets, it really resonates with consumers, you absolutely see that in their per store volume, uh, so we think there's 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

Alex Miller: 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 Eagle.

fit and the way we're engaging um we feel really good about it.

Alex Miller: I think the more we work with them, just the cultural fit and the way we're engaging, we feel really good about it.

Thank you

Your next question comes from Martin Landry withtiefel. Your line is now open.

Martin Landry: Your next question comes from Martin Landry with Stiefel.

Hi, good morning guys. Um, I would like to touch on the uh merchandise margin in the US, uh, it's, it's been soft for several quarters and I, I understand, you know, some of that comes from high promotional activity, but I was wondering if you could refresh us or update us.

Martin Landry: Your line is now open. Good morning, guys.

Filipe Silva: I would like to touch on the merchandise margin in the US. It's been soft for several quarters. And I understand, you know, some of that comes from high promotional activity.

On what are your gross margin drivers for the uh US business for merchandise sales.

Filipe Silva: 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.

I think for us it's, it's all about understanding our data uh we, we talked about it, we, we knew we were investing very heavily through the summer, um, 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 customers, uh, and we will continue to show value again, we're pivoting uh to meal deals as the way to do that, and we like the margin profile and we also in uh I think or we believe that's more compelling. We couldn't be more pleased with the 1st 67.

Filipe Silva: 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 customers and we will continue to show value. Again, we're pivoting to meal deals as the way to do that. And we like the margin profile. And we also, I think, or we believe that's more compelling. We couldn't 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.

weeks of data that we've seen and just the sequential growth we're seeing week on week, um, when you look inside of our margins, um, I think we got very heavy on promotional activity, trying to show value and trying to drive sales. The, the positive of our data capability as we continue to improve, we now have the ability to analyze those promotions very quickly, very in almost real time and shut down promotions that are not achieving.

Filipe Silva: When you look inside of our margins, I think 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, in almost real time and shut down promotions that are not achieving what we intended for them to achieve. The result of that has been that we're actually seeing increased sales and we're seeing our margin improve.

What we intended them for them to achieve. Um, the result of of that has been that we're actually seeing increased sales and we're seeing our margin improve.

And, uh, if I, if I can add, um, you know, um,

We, we have a going on uh

Filipe Silva: Also, if I can add, you know, we have going on within the Feed to Serve initiative, you know, COGS renegotiation with supplier. And that's bringing also, you know, some good results in the U.S. We are now running out of that in the overreach.

Uh, within the C2 serve initiative, you know, um, um, uh, cogs uh renegotiation with a supplier. Um, and that's, uh, bringing also, uh, uh, you know, some good results in US. We are now rolling out also that, uh, in, uh, in over in, in the other regions.

But that's, that's helping us, you know, through, uh, I would say the, the data analytics.

Uh, but to, to, to sit at the table with a, a ray and to get better at negotiate negotiating your promotions.

Filipe Silva: But that's helping us, you know, through, I would say, the data analytics, but to sit at a table with suppliers and to get better at negotiating promotions. and negotiating basically the run rate terms with our suppliers, so feeling good about also what's happening there and I think that will help us also in the next coming quarters to drive better GP rates.

And the negotiating basically the, the, the, the, the, the run, run rate terms we've uh we've uh our players. So, uh, feeling good about, uh, about also uh what's happening there. Uh, and I think that will help also so in the next coming quarters, you know, to uh to drive better, better GP rate.

OK, that's helpful. Thank you and best of luck.

Thank you.

Filipe Silva: Okay, that's helpful.

Your next question comes from Chris Lee with Dejaba. Your line is now open.

Filipe Silva: Thank you, and best of luck.

Oh hi, good morning. I'm just maybe following up on your comments that US uh merchandise central sales is positive quarterly date. I was wondering, you know, uh, perhaps other than, you know, easier year ago comparison and

Chris Lee: Your next question comes from Chris Lee with Desjardins. Your line is now open.

Alex Miller: Hi, good morning. I'm just maybe following up on your comments that U.S. merchandise center sales is positive quarter-to-date. I was wondering, you know, perhaps other than, you know, easier year-ago comparison and some of the enhanced promotions that are driving high traffic, are you seeing any green shoots or stabilization from the U.S. consumer that gives you some confidence that this momentum that you're seeing is sustainable?

Some of the enhanced promotions that are driving high traffic. Are, are you seeing any green shoots or stabilization from the US consumer that gives you some confidence that this momentum that you're seeing is sustainable. Thank you.

Thanks.

Alex Miller: Thank you. Thanks. I think we believe the consumer is under significant pressure. I don't think we've seen something that suggests that that changes or that has changed.

I think we, we believe the consumer is under significant pressure. I don't think we've seen something that's, that suggests that that changes, uh, or that has changed. I think we're, we're all optimistic and hopeful as we move into 2025 that interest rates might come down, we might, uh, continue to see inflation come down, but I'd say right now, uh, we, that consumer is still under significant pressure. It's really our focus is on our execution. Um, we are operating

Alex Miller: I think we're all optimistic and hopeful as we move into 2025 that 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.

at the core, we are laser focused on fast friendly and in stock our turnover is at the lowest levels we've ever achieved, uh, and our operating metrics are improving period on period. Uh, we will continue to try and differentiate that way and differentiate through value uh perception through our meal deals, our private labels, using our data capabilities uh in our pricing to show value perception where our customers see it and also, you know, we touched on the inner circle, and our

loyalty programs, we are, we are gathering uh tremendous amounts of data. We are understanding our customers better, uh, we've set up a customer insights through our GCN and um 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: And also, we touched on inner 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. Great, that makes sense.

Great, that makes sense and happy Thanksgiving, Alex. Thanks.

Thank you, appreciate that.

Alex Miller: And happy Thanksgiving, Alex. Thanks. Thank you.

Your next question comes from Tammy Chen with BMO Capital Markets. Your line is now open.

Tamy Chen: Your next question comes from Tamy Chen with BMO Capital Markets. Your line is now open.

Hi, good morning. Um, my one question is going back to the um the, the all pack so the SGNA, um, I just wanted to better understand, uh, a specific component of um the investments that you need to make going forward if there is something like that. And what I mean by that is, uh, I think, you know, last quarter, your, your organic growth was a little high, and I think you had called out um there were quite a few non-reoccurring items. So, when I look at this quarter's organic, you know, as GNA grows those 2.3%.

Filipe Silva: Hi, good morning. My one question is going back to the the all packs of the SG&A. I just wanted to better understand a specific component of the investments that you need to make going forward if there is something like that. And what I mean by that is, I think, you know, last quarter, your organic growth was a little high. And I think you had called out, there were quite a few non-reoccurring items. So when I look at this quarter's organic, you know, SG&A growth of 2.3%, I think that's increased a bit sequentially. Yet you've highlighted, you continue to do a good job at reducing and optimizing labor hours.

I, I think that increased a bit sequentially. Yeah, you've highlighted, you continue to do a good job at reducing and optimizing labor hours. So, can you just uh remind us what are the, the offsets that are driving this um higher SGA growth. Like, is it digital or loyalty related spend and is that expected to continue and reflected in your 5-year target. Thanks.

Filipe Silva: So can you just remind us what are the offsets that are driving this higher SG&A growth? Like, is it digital or loyalty related spend? And is that expected to continue and reflected in your five year target?

Thanks, thanks, Danny, um, and, and, and the short answer is yes, um, uh, as, as mentioned earlier and uh in the, in the past conference, so, um, we, we are investing uh

Filipe Silva: Thanks. Thanks, Tamy.

Filipe Silva: And the short answer is yes. As mentioned earlier and in the past conference, we are investing significantly in tech, in technology to improve our customer experience at store level, digitizing the experience there. Doing a lot also just to strengthen the foundations, the reality is that we have not invested enough in the past on our technology. So at store level, again, just to making sure that the store can deliver a proper experience to the employee, to the customer, but also at the back office level, ensuring and making sure that we can automate as much as we can.

Uh, significantly in, in technology to uh improve our customer, you know, experience doing uh at store level.

Digitizing the experience there.

Um, doing a lot also just to strengthen the foundations, um, your entities that we have not invested enough in the past on our technology. So at store level again just to making sure that you know uh uh the, the store uh can uh uh uh deliver a proper experience to, to the employee, to the, to the uh customer. But also at the back of uh level ensuring uh and making sure that we can automa automatize as much as we can. So I would say the, the biggest component, you know, in terms of investment or, or, and, and

Expense investment is, is coming from tech, um, definitely. And that's something that we have embedded in our uh uh uh uh 10 for the windows.

Filipe Silva: So I would say the biggest component in terms of investment or expense investment is coming from tech, definitely. And that's something that we have embedded in our ten following journey. And yeah, when we are talking about, you know, in terms of target to beat inflation by one percent, we embed in this target, you know, the investment that we are doing in tech. So the Feed to Serve initiative should fund this investment in tech.

And, uh, and yet when we are talking about, you know, uh uh uh in terms of target to beat inflation by 1%. We, uh, we, uh, embed in this target, you know, the investment that we are doing in, uh, in, uh, in tech. So, uh, the fee to serve initiative should fund this uh investment in tech.

Thank you.

Your next question comes from Vishal Shriar with National Bank. Your line is now open.

Filipe Silva: Thank you.

Vishal Shreedhar: Your next question comes from Vishal Shreedhar with National Bank. Your line is now open.

Hi, thanks for taking my question, um.

I, I just wanted a clarification on the, on the margin you said we've removed the heavy heavy promotional activity. We feel like we're getting better at promoting and our margin is improving. I, I didn't understand if that was uh an 8 weeks, a year over year comment or sequential or improving relative to what.

Filipe Silva: Hi, thanks for taking my question. I just wanted a clarification on the 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.

Filipe Silva: I didn't understand if that was an eight weeks, a year over year comment or sequential or improving relative to what? And as you reflect on that answer, maybe you can also just take a step back and help us understand, relative to the plan that you announced at the investor day. where are you tracking ahead and where are you tracking behind with respect to your initiative? Obviously, there's a lot of macro. underneath the results.

And, 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 that the investor day.

Um

Where are you tracking ahead and where are you tracking behind uh with respect to to your initiatives, um, obviously there's a lot of macro under.

Underneath the results so we can uh we, we can't really see uh the performance and the underlying benefits.

Thank you.

Filipe Silva: So we can't really see the performance and the underlying Filipe, you want to take that or you want me to? Yeah, I can start with the ten for the win and what's going well. I think we feel very good about, you know, when we look at the four pillars, win the customer, win growth, win the offer and win the fuel. Win growth, I think it's doing very well. As mentioned by Alex earlier, NTI program, we are running ahead of our plan. And we are, as you know, active and we have just announced two recent acquisitions.

We pay you wanna take that or you want me to?

Yeah, I'll, I can, I can start with the

The you know the 10 for the win and uh what, what, what's going well I think we, uh, uh, we feel very good about, you know, when we look at the, the four pillar when the customer win win.

Uh, uh, with your fuel, uh, wind growth, I think it's, uh, it's, it's doing very well as mentioned by Alex earlier, uh NTI, uh, program, uh, we are running ahead of uh of our plan.

Um, we, uh, we, uh, we are, as you know, active and we have just uh announced to uh recent acquisitions. So we are being uh very active on that, so feeling good about this, this part of the, of the team for the win.

Uh, we are definitely also moving in the radiation on the, on the feet to serve, uh, already identified the 800 million you know on the side, um, on the window food, uh, and win, win the, the, the food and first.

Filipe Silva: So we are being very active on that. So feeling good about this part of the ten for the win. We are definitely also moving in the right direction on the P2Serve, already identified the 800 million, you know, on the G&A side. On the win the food and win the food and first, we think that we have, you know, the right focus there. Of course, the macro has not helped there, but we believe that we have a plan we just need now to execute. And we believe that the result will come. Food has been growing. The FFF program has delivered positive growth during the quarter.

Uh, we believe that we have, uh, you know, the right focus there, of course, the macro has not helped there, uh, but, uh, we believe that we have a plan. Uh, we just need now to execute, uh, and, uh, and we need that the result will come, uh, food has been growing, the SSF program, uh, as, uh, deliver positive growth during the quarter. So we are going in the right direction, but that's not enough, and we know that, and we continue.

Filipe Silva: So we are going in the right direction, but that's not enough. And we know that and we continue. And on the fuel side, we have not mentioned that, but same here, of course, there is a pressure on the demand as well. We see that in the fuel volume. But we, as you remember, we have stated that B2B in US will be one of our priority and B2B in US is growing. We have delivered a 5% growth volume on the B2B side of the business in US. So that's quite positive. You know, in the quarter, we see a number of customers growing in that part of the business.

And on the fuel side, we have not uh uh mentioned that, but, uh, same here, of course, uh there is a pressure on the demand as well. Uh we see that in the, in the fuel volume. But uh we, as you remember, uh, we, uh, we have uh said that B2B in US will be one of our priority and uh to be in the US is growing. We have delivered a 5% growth volume on the B2B side of the business in US.

So that's quite positive, you know, in the quarter, we see a number of, uh, you know, uh, uh, uh customers uh uh growing in, in that part of the business. Um, and, uh, and we know that uh we have a, you know, a, a, a good competitive advantage there, uh, I think, you know, sites across the, across the, the 50 states of the US, uh, so, so yeah, it's moving in the right direction or in in that sense as well.

Filipe Silva: And we know that we have a good competitive advantage there, having sites across the 50 states of the US. So yeah, it's moving in the right direction in that sense as well.

Alex, sir, do you want to add anything else?

Yeah, I, I think we absolutely believe that the focus areas in our priorities with in 10 for the win are are are the right ones and we remain uh extremely focused, and I think as Felipe 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, uh, the macro is, is really not helped us, but we need to accelerate differentiation, uh, and accelerate unit growth, uh, and accelerate, um, trips to our stores, so.

Alex Miller: Alex, do you want to add anything there? Yeah, I think we absolutely believe that the focus areas and our priorities within 10 for the Win are the right ones, and we remain extremely focused. And I think, as Filipe 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 the areas we shared, data, digital, thirst, food, cost controls, we absolutely believe are the right focus areas, and we continue to be laser focused on those areas.

Um, that's where our focus is, but we, you know, the, the areas we shared data, digital, thirst, food, uh, cost controls, uh, we, we absolutely believe are the right focus areas and we continue to be laser focused on those areas, um, your question about margin, uh, I'm talking sequentially.

Thank you.

Your next question comes from Bonnie Herzog with Goldman Sachs. Your line is now open.

Bonnie Herzog: Your next question comes from Bonnie Herzog with Goldman Sachs. Your line is now open.

All right, thank you. Good morning.

Hey, um, 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 US, 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 the most potential risk.

Bonnie Herzog: Alright, thank you.

Alex Miller: 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 US, 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?

Thanks, Bonnie. Um, it's, it's awfully early days and there's a awful lot of speculation. I think, you know, we've looked at a couple things, um, EBT is an example, you know, EBT is about 0.6, 0.6, or 0.7% of our sales, uh, in the United States, uh, some of the things that have been talked about, you know, perhaps half of that, a little less than half of that would be at risk as an example, uh, we've looked about 3% of our goods, uh

Alex Miller: Thanks, Bonnie. It's awfully early days, and there's an awful lot of speculation. I think, you know, we've looked at a couple things. EBT is an example. You know, EBT is about 0.6 or 0.7% of our sales in the United States. Some of the things that have been talked about, you know, 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 come from China, so a very small amount. Most of that is, or all 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.

Today in our stores come from China, uh, so a very, a very small amount. Uh, most of that is uh all of that is, is general merch specifically kind of phone chargers and uh and things like that and, and we think everyone would be impacted similarly so we don't see a big issue with that, um, there's just so much unknown around what's actually gonna happen, Bonnie, that, you know, for us it's early days and, and we have started to consider some things.

Alex Miller: There's just so much unknown around what's actually going to happen, Bonnie, that, you know, 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, you know, what we hope is that the consumers around the world can, you know, inflation goes down, and folks can start to feel better about their disposable incomes, but we don't know what's going to happen.

Um, uh, but, but we don't see anything at this time that we think is, is going to overly impact us and you know what we hope is that the, the, the consumers around the world can, you know, inflation goes down and folks can, can start to feel better about uh their disposable incomes, but uh we don't know what's going to happen.

Fair enough and thanks for the color.

on.

Your next question comes from Anthony Bunnaio with Wells Fargo. Your line is now open.

Alex Miller: Fair enough, and thanks to the caller.

Anthony Bonadio: Your next question comes from Anthony Bonadio with Wells Fargo. Your line is now open.

Yeah, hey, good morning guys, uh, thanks for taking my question. I just wanted to follow up on uh Toel. uh, you called out a $158 million benefit to Ebida, uh, from M&A in the quarter, uh, but it looks like that is gross of a 30 $38 million.01 time benefit uh related to that fuel supply renegotiation, uh, so one, am I thinking about that latter piece correctly.

Filipe Silva: 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 $38 million one-time benefit related to that fuel supply renegotiation. So, one, am I thinking about that latter 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 announced the deal?

Uh, and 2, can you just help us understand uh where Total is not running, uh, versus that initial $500 million dollar E run rate uh when you guys announced the deal.

So you, you read is, is correct?

Um, and, uh, 38 million are related to previous quarter. Um, when you look at the, at the total energy and where we stand compared to our, our goal of 500, we, we feel pretty good there. Uh,

Filipe Silva: So your read is correct. and 38 million are related to the previous quarter. And when you look at the total energy and where we stand compared to our goal of 500, we feel pretty good there. Now that this fuel supply agreement has been, I would say, renegotiated, plus the synergy that we mentioned earlier, we are very confident that we will deliver what we said on this acquisition.

Uh, now that, uh, you know, this, uh, uh, fuel supply agreement has been, I would say renegotiated. So, uh, yeah, uh, plus the synergy that we mentioned earlier, we, uh, we are very confident that, yeah, we'll, uh, we'll, we'll deliver what we, we said on, on, on this acquisition.

Thanks guys.

Your next question comes from Bobby Griffin with Raymond James. Your line is now open.

Bobby Griffin: Your next question comes from Bobby Griffin with Raymond James.

Good morning. Bye. Thanks for taking the questions. Um, I was, just, just curious on the, on the quarter to date improvement. I'm just curious, how do, how do you guys look at the environment and the environment stabilized because there's a lot of noise between hurricanes, some of the initiatives you guys are 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.

Alex Miller: Your line is now open.

Alex Miller: Good morning, everybody. Thanks for taking the questions. Alex, just curious, on the quarter-to-date improvement, I'm just curious, how do you guys look at the environment? Has the environment stabilized? Because 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. Yeah, I think 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.

Yeah, I think

We think the consumer remains under stress, I think we feel like we're getting better, uh, and executing better. Uh, it is pretty broad based across our business units, uh, of the improvement. It's, uh, we always have different business units performing at different levels in different pockets of strength, uh, and weakness, but, uh, holistically it is broad based um we believe the consumer remains under pressure, uh, and we believe we're executing better both operationally, uh, and in our 10 for the win initial.

Alex Miller: 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. 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.

initiatives and, you know, we've talked to you guys a long time about our data and our journey and we are getting better at at understanding our data and understanding our customers and we think we're we're seeing the benefit of that.

Thank you. Have a great holiday to you and the team.

Thank you.

Alex Miller: Thank you.

Ladies and gentlemen, as a reminder, should you have a question, please press star one. Your next question comes from John Zamporo, with Scotia Bank. Your line is now open.

Operator: Have a great holiday to you and the team. Thank you.

Operator: Ladies and gentlemen, as a reminder, should you have a question, please press star 1.

John Zamporo: Your next question comes from John Zamporo with Scotiabank. Your line is now open.

Thank you very much. Good morning, um, I wanted to ask about the fuel side of the business in in particular saves or volumes, uh, those turn positive in Canada and Europe, but still negative in the US even adjusting for I think you said 70 basis points uh from the hurricane and, and I wonder what you might attribute that to? Is there still an element of partial fill ups from customers and and would you characterize the US fuel market as any more any more or less competitive than Canada and Europe at the moment.

Alex Miller: Thank you very much.

Alex Miller: Good morning. I wanted to ask about the fuel side of the business and in particular Stansford Volumes. Those turned positive in Canada and Europe, but still negative in the US, even adjusting for, I think you'd said 70 bases. 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. fuel market as any more or less competitive than Canada and Europe? I think as price comes down, we always see fill go up. And that's what we're seeing. Price is coming down and we are seeing average fill rate go up.

Um

I think his price comes down, we always see Phil go up, uh, and that's what we're seeing prices coming down and we are seeing average fill rate go up, uh, but the consumer remains stressed, and I think trips, I think they're being very cautious in their trips and their travel, they're reducing travel, uh, you know, demand remains under pressure. Uh, the US remains a very competitive fuel market, um, for sure, so, you know, we think demand will continue to decline in the United States due to

Alex Miller: But the consumer remains stressed. And I think trips, I think they're being very cautious in their trips and their travel. They're reducing travel. Demand remains under pressure. The US remains a very competitive fuel market for sure. So we think demand will continue to decline in the United States due to vehicle efficiency in the fleet. And we have got to take share.

uh, you know, vehicle efficiency, uh, in the fleet, uh, and, and we have got to take share and where we're focused on doing that is really in three areas. You heard Felipe mention our focus on B2B. We shared that intent for the win. Uh, we are accelerating that. I think we feel positive. Our growth this quarter was more than our growth last quarter. Uh, we have strong ambitious ambition there and we're largely meeting our target for this year. Uh, we have a new pricing tool that we're rolling out right now, uh, that we feel really good about.

Alex Miller: And where we're focused on doing that is really in three areas. You heard Filipe mentioned our focus on B2B. We shared that intent 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 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 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.

we tested very heavily, uh, that we think will help us, uh, gain some share, uh, and, 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, uh, and as we collect more data and get more folks signed up, uh, we believe that should help us uh take share so those are kind of our three big focus areas, uh, but demand in the US remains under pressure.

Alex Miller: 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.

OK appreciate the call thank you.

There are no further questions at this time. I will now turn the call over to management for closing remarks.

Operator: Okay, appreciate the color. Thank you.

Operator: There are no further questions at this time.

Thank you, uh, Alex and Felipe. 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 3rd quarter 2025 results in March. So question.

Operator: I will now turn the call over to management for closing remarks. Thank you, Alex and Filipe. That covers all the questions for today's call.

Operator: Thank you all for joining us. We wish you a great day and look forward to discussing our third quarter 2025 results in March.

Operator: Ceci met fin la conférence d'aujourd'hui. Nous vous remercions d'avoir été parmi nous. Nous vous souhaitons une agréable journée et au plaisir de discuter avec vous de nos résultats du troisième trimestre 2025 en mars prochain.

Does that make 9.

Thank you everyone.

Operator: Vous êtes maintenant invités à mettre fin à cet appel.

Ladies and gentlemen, this is your conference call for today. We thank you for participating in us so please disconnect your lines.

Operator: Thank you, everyone.

Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your line.