Q3 2025 Empire Co Ltd Earnings Call

Good morning, ladies and gentlemen, and welcome to the Empire third quarter 2025 conference call at this time all listening only mode.

Operator: Good morning, ladies and gentlemen, and welcome to the Empire third quarter 2025 conference call. At this time, all lines are in no time only mode.

Operator: Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator.

The presentation, we will conduct a question and answer session. If at any time during this call you'll be quite immediate assistance east west arterial for the operator. This call is being recorded and please be much like in 2025, and I would now like to turn the conference Overeducated Rhino. Thank you. Please go ahead.

Operator: This call is being recorded on Thursday, March 13 2025.

Katie Brine: And I would now like to turn the conference over to Katie Brine. Thank you. Please go ahead. Thank you, Ina.

Speaker Change: Thank you Ina.

Katie Brine: Good morning and thank you all for joining us for our third quarter conference call. Today we will provide summary comments on our results and then open the call for questions.

Speaker Change: And thank all for joining us for our third quarter conference call. Today, We will provide summary comments on our results and then open the call for questions.

Katie Brine: This call is being recorded and the audio recording will be available on the company's website at empireco.ca.

Speaker Change: Call is being recorded and the audio recording will be available on the company's website at Holdco dossier.

Katie Brine: There is a short summary document outlining the points of our quarter available on our website.

Speaker Change: Sure. The short summary document outlining the points of that quarter are available on our website joining.

Katie Brine: Joining me on the call this morning are Michael Medline, President and Chief Executive Officer, Matt Reindel, Chief Financial Officer, and Pierre St. Laurent, Chief Operating Officer.

Speaker Change: Joining me on the call. This morning are Michael My by President and Chief Executive Officer, and Al Chief Financial Officer, and Chief Operating Officer. Today's discussion includes forward looking statements. We caution that such statements are based on management's assumptions and beliefs and are subject to uncertainties and other factors that could cause actual results to differ materially I refer.

Katie Brine: Today's discussion includes four looking statements. We caution that such statements are based on management's assumptions and beliefs and are subject to uncertainties and other factors that could cause actual results to differ materially. I refer you to our news release and ENA for more information on these assumptions and factors.

Speaker Change: Are you to our news release.

Speaker Change: For more information on these assumptions and factors I will now turn the call over to Michael on that line.

Michael Medline: I will now turn the call over to Michael Medline. Thanks, Katie. Good morning, everyone. Before I jump into the quarter, I want to take a few moments to talk about the other announcement we made earlier this morning. I never like to see a valued colleague leave the fold, but when they have made the decision to retire, I can only feel a sense of happiness for that person. And after six years with the company, the last four is Chief Financial Officer Matt Reindel will be retiring. As you all know, Matt has been an incredible partner in helping drive Empire's turnaround.

Michael My: Thanks, Katie and good morning, everyone before I jump into the quarter I wanted to take a few moments to talk about the other announcement, we made earlier this morning.

Michael My: I never like to see a valued colleague leave before but when they may have made the decision to retire I can only feel a sense of happiness for that person.

Michael My: And after six years of the company the last four as Chief Financial Officer, Matt Rendell will be retiring.

Speaker Change: As you all know Matt it's been an incredible partner in helping drive empires turnaround. He played a critical role in helping our business navigate the challenges brought on by the pandemic, while also guiding us through a period of high inflation and interest rates with both rigor and a passion for the business.

Michael Medline: He played a critical role in helping our business navigate the challenges brought on by the pandemic, while also guiding us through a period of high inflation and interest rates with both rigor and a passion for the business. He has been instrumental in building the foundation for our ongoing success. He will be missed by all of us at Empire, but he will fortunately be around for a little while longer. We are fortunate to have found a great new CFO. In May, we will welcome Costa Pofanas as Executive Vice President and Chief Financial Officer. Costa is an experienced and immensely capable leader who spent 19 years with Leon's Furniture Limited and was most recently with Green Infrastructure Partners.

Speaker Change: Been instrumental in building the foundation for ongoing success. He will be missed by all of us at Empire, but he was fortunately be around for a little while longer.

Speaker Change: We are fortunate to have found a great new CFO in May we will welcome costs Superfan us as executive Vice President and Chief Financial Officer.

Speaker Change: <unk> is an experienced and immensely capable leader, who spent 19 years with Leon's furniture limited and was most recently with Green infrastructure partners. He will play a critical role in helping drive Empire's results in the years to come we are grateful that math has agreed to stay on for a number of months to work closely with Costa.

Michael Medline: He will play a critical role in helping drive Empire's results in the years to come. We are grateful that Matt has agreed to stand for a number of months to work closely with Costa and ensure a seamless transition.

Speaker Change: And ensure a seamless transition.

Speaker Change: On to the business here.

Michael Medline: On to the business. Q3 was the latest in a string of quarters where we continue to see improving momentum in our results. Same-store sales have strengthened for the last four quarters and we continue to show increased discipline in managing our margins. But the numbers at face value do not tell the full story. While ST&A is slightly higher than Q3 last year, a large part of this increase is due to the accounting for long-term share-based incentives, which Matt will give you more details on shortly. So what was an even stronger quarter than it looks like at first glance?

Speaker Change: Q3.

Speaker Change: Latest in a string of quarters, where we continued to see improving momentum in our results.

Speaker Change: Same store sales have strengthened for the last four quarters and we continue to show increased discipline in managing our margins.

Speaker Change: But the numbers at face value.

Speaker Change: <unk> tell the full story.

While SG&A is slightly higher than Q3 last year, a large part of this increase is due to the accounting for long term share based incentives, which Matt will give you more details on shortly so what was an even stronger quarter then it looks like at first glance.

Michael Medline: Today, we will focus on three topics, our Q3 results and market trends, a quick update on our e-commerce business, and an update on the current volatile environment. First, our results and Q3 market trends. Our food sales grew 3.1% this quarter with same store sales of 2.6%. This was supported by stronger top-line performance in our full-service banners and continued performance in our discount banner. Both of these channels continue to grow faster than their respective markets and in bricks and mortar. The gap between full-service and discount same-store sales continued to reduce this quarter. We're seeing positive same-store sales across all of our regions and all of our business units.

We will focus on three topics, our Q3 results and market trends a quick update on our ecommerce business and an update on the current volatile environment.

First our results in Q3 market trends, our food sales grew three 1% this quarter with same store sales of two 6%.

Speaker Change: This was supported by stronger top line performance and our full service banners and continued performance in our discount banner.

Both of these channels continue to grow faster than their respective markets and in bricks and mortar the gap between full service and discount same store sales continued to reduce this quarter.

Speaker Change: We're seeing positive same store sales across all of our regions and all of our business units.

Michael Medline: Last quarter, you may recall, we saw smaller declines in the average basket size. This quarter, for the first time since Q1 F24, we see growth in our year-over-year basket size, which is a big step in the right direction. And with regards to inflation, adjusting for the high food inflation purchased from stores. In the previous two quarters, we said that we started to see green shoots and early indicators that customers are returning to more favorable and predictable shopping behaviors. We continue to see these trends come to life and improve in Q3, where we saw outsized growth in our fresh department, which indicates customers are starting to trade up from non-fresh to fresh products, and importantly, a decline in promotional penetration.

Speaker Change: Last quarter, you may recall, we saw smaller declines in the average basket size. This quarter for the first time since Q1 F. 'twenty four we see growth in our year over year basket size, which is a big step in the right direction.

Speaker Change: Regards to inflation adjusting for the temporary tax break on select goods, our internal inflation is below the low CPI food inflation purchase from stores.

Speaker Change: In the previous two quarters, we said that we are starting to see green shoots in early indicators that customers are returning to more favorable and predictable shopping behaviors. We continued to see these trends come to life and improve in Q3, where we saw outsized growth in our press department, which indicates customers are starting to trade up for non fresh.

Speaker Change: Fresh products and importantly, a decline in promotional penetration.

Michael Medline: Gross margin continued to improve this quarter. driven by operating efficiencies and a strong focus on executing with excellence in our stores. margin improvement of 43 basis points was consistent with last quarter. As I've said in the past, this is not due to one silver bullet, it is many small but meaningful actions that continue to benefit us over time. We have now made significant advancements in our stores, in areas like shrink, and also through the ongoing deployment of space productivity, and across our supply chain. Collectively, these initiatives have enabled us to become more efficient and more nimble, which is of even greater importance in this current environment.

Speaker Change: Gross margin continued to improve this quarter.

Driven by operating efficiencies and a strong focus on executing with excellence in our stores.

Speaker Change: Margin improvement of 43 basis points was consistent with last quarter.

Speaker Change: As I said in the past this is not due to one silver bullet it as many small but meaningful actions to continue to benefit us over time.

Speaker Change: Now made significant advancements in our stores in areas like shrink and also through the ongoing deployment of space productivity and across our supply chain collectively these initiatives have enabled us to become more efficient and more nimble, which is up even greater importance in this current environment.

Michael Medline: Overall, we delivered an adjusted EPS of 62 cents, which was consistent with prior years. While this may look like a flat quarter at first glance, we actually delivered better results in our core operations, which Matt will touch on in greater detail shortly.

Mark: Overall, we delivered adjusted EPS of <unk>, 62, which was consistent with prior year. While this may look like a flat quarter at first glance, we actually delivered better results in our core operations, which mark will touch on in greater detail shortly.

Michael Medline: And now for a quick update on our e-commerce business, we had total e-commerce sales growth of 72% generated by strong double digit growth in Voila and a strong start to our partnerships with Instacart and Uber Eats, which as of two days ago are now across the country. Voila has seen its results improve every quarter this year, shifting the team's attention to focus on our operational CFCs, and improving profitability with the right move. Our new customer acquisition strategies in tandem with the cost reduction initiatives across our delivery and CFC operations are beginning to deliver real results on both our growth profile and on the bottom line.

Speaker Change: And now for a quick update on our ecommerce business. We had total ecommerce sales growth of 72% generated by strong double digit growth and blah blah blah and a strong start to our partnerships with <unk>, which as of two days ago are now across the country.

Mark: Well a lot has seen its results improved every quarter this year.

Mark: Shifting the team's attention to focus on our operational <unk> and improving profitability with the rate move our new customer acquisition strategies in tandem with the cost reduction initiatives across our delivery in CFC operations are beginning to deliver real results from both our growth profile and on the bottom line.

Michael Medline: We are pleased to continue to see overall Canadian e-commerce penetration grow, and the interplay between Instacart and Uber Eats with Volat has proven to be highly complementary. We are excited by the growth potential of our e-commerce business and believe we have the right assets in place to effectively serve this growing market.

Mark: We are pleased to continue to see overall Canadian e-commerce penetration grow and the interplay between instant card into a breach with Vellore has proven to be highly complementary we.

Mark: We are excited by the growth potential of our ecommerce business and believe we have the right assets in place to effectively serve this growing market.

Michael Medline: All right, now to the current environment. Since we spoke to you in December, there has been a significant rise in unpredictability in our operating environment with the political shifts in the U.S. and terrorists. And it is unclear how this will play out over the next several years. While we have a strong plan to deal with the direct impacts of retaliatory terrorists, we don't want to downplay the risks that exist. The uncalled for tariffs and the retaliatory tariffs represent a real threat to the Canadian economy. Uncertainty and volatility have been recurring themes over the last five years through events like COVID, high inflation, high interest rates and natural disasters.

Alright, now to the current environment.

Mark: Since we spoke to you in December there has been a significant rise.

Mark: <unk> ability and our operating environment with the political shifts in the U S and tariffs.

Mark: And it is unclear how this will play out over the next several years.

Mark: While we have a strong plan to deal with the direct impacts of retaliatory tariffs, we don't want to downplay the risks that exist.

The uncalled for tariffs and the retaliatory tariffs represent a real threat to the Canadian economy.

Mark: Certainty and volatility have been recurring themes over the last five years through events like Covid Hyatt place and high interest rates and natural disasters and we've continued to get better at executing in these types of environments.

Michael Medline: And we've continued to get better at executing in these types of environments. Through all this, our main focus has always been protecting and continuously enhancing the value we offer to our customers, and this remains true today.

Mark: Through all of this our main focus has always been protecting and continuously enhancing the value we offer to our customers and this remains true today.

Michael Medline: Let's talk about tariffs in more detail. Unlike many Canadian companies, Empire is not directly impacted by U.S. tariffs, and our industry is fortunate to be in a much stronger position than many others. However, retaliatory tariffs impact us in three ways. They drive us to reduce reliance on U.S. and may result in a weaker Canadian dollar. First on U.S. sourcing. In a normal environment, averaged across the year, approximately 12% of our products and dollars come from the U.S. And retaliatory tariffs would, in theory, lead to higher import costs on these items. However, this 12% number has been decreasing over the last year and will continue to as we shift our supply to meet our customers growing demand for Canadian and non-American products.

Mark: Talk about tariffs in more detail.

Mark: Unlike many Canadian companies are not directly impacted by U S tariffs.

Mark: Our industry fortunate to be in a much stronger position than many others. However, retaliatory tariffs impacts us in three ways.

Drive us to reduce reliance on U S sourcing put pressure on their suppliers and May result in a weaker Canadian dollar.

Firstly on U S sourcing in a normal environment average across the year of approximately 12% of our products in dollars coming from the U S.

Mark: Retaliatory tariffs would in theory lead to higher import costs on these items.

Mark: However.

Mark: This 12% number has been decreasing over the last year and we will continue to as we shift our supply to meet our customers' growing demand for Canadian non American products and American products, we are selling asset presented as a percentage of our total sales are rapidly dropping.

Michael Medline: American products we are selling as a percentage of our total sales are rapidly dropping. We have heard loud and clear from our customers that they want Canadian products. Fortunately for us, supporting and promoting Canadian products is part of our DNA. We've moved quickly to further elevate our local strategy, making it easier for customers to make informed choices about Canadian products. As well, over the years, we at the company have developed a much larger and diversified source of supply to proactively manage threats such as natural disasters or product shortages in geographic regions. Now, we've developed good alternatives in nearly every category.

Mark: We have heard loud and clear from our customers that they want Canadian products, Fortunately for us supporting and promoting traded products as part of our DNA. We've moved quickly to further elevate our local strategy makes it even easier for customers to make informed choices about Canadian products.

Mark: As well over the years, we have the company have developed a much larger and diversified source of supply to proactively manage threats, such as natural disasters or product shortages in geographic regions.

Mark: Now we have developed good alternatives in nearly every category.

Mark: Our most challenging category to mitigate the threat of retaliatory tariffs as protests were in Canada in the winter, we do not always have viable alternatives, we could see an impact here EBIT increased cost or a reduced assortment. If the product is no longer competitive on ourselves over time. However, however, our suppliers.

Michael Medline: Our most challenging category to mitigate the threat of retaliatory terrorists is produce, where in Canada, in the winter, we do not always have viable alternatives. We could see an impact here either through increased costs or reduced assortment if the product is no longer competitive on our shelves over time. However, our suppliers have been good partners in helping us to mitigate the potential impact so far. Our supplier partners with US-based production are directly impacted by retaliatory tariffs. This puts pressure on them, and as a result, they may be looking to pass these increased costs on. Some have begun to test our position on We are navigating a period of uncertainty, and we are focused on ensuring that reactionary or unnecessary costs are not passed on to customers.

Mark: <unk> been good partners in helping us to mitigate the potential impact so far.

Mark: Our supplier partners with U S. Based production are directly impacted by retaliatory tariffs. This puts pressure on them and as a result, they may be looking to pass these increase caught song.

Mark: Some have begun to test our position on this.

Mark: We're navigating a period of uncertainty and we are focused on ensuring that reactionary or unnecessary costs are not passed on to customers for <unk>.

Michael Medline: We're managing the short to midterm through fair but often tough discussions with our suppliers, and we've been pleased to see many of our suppliers proactively coming to the table with solutions. A great example is Lindt. Last week, they announced publicly that while historically 50% of their chocolates in Canadian stores come from their US factories and the rest from Europe, by the summer of 2025, 100% of Canada's supply will come from Europe. As well, in speaking to some of our other suppliers, many do not see the benefit of trying to pass on tariff costs right now for two reasons.

Mark: Managing the short to mid term through fair, but often tough discussions with our suppliers and we've been pleased to see many of our suppliers proactively coming to the table with solutions.

Mark: A great example is the limit.

Mark: Last week, they announced publicly that while historically, 50% of their chocolate in Canadian stores come from their U S factories, and the rest from Europe by the summer of 2025 or 100% of candidate supply will come from Europe as.

As well in speaking to some of our other suppliers. Many do not see the benefit of trying to pass on tariff costs right now for two reasons first they do not want their product to become less competitive on ourselves as a result of higher prices and second the backdrop is too volatile right now with the on again off again approach.

Michael Medline: First, they do not want their product to become less competitive on our shelves as a result of higher prices. And second, the backdrop is too volatile right now with the on-again, off-again approach to tariffs. Instead they are focused on thoughtful solutions like looking at alternate sources of supply for input materials or alternate locations for manufacturing. Like us, our suppliers are working hard to minimize the impact to customers. Our national sourcing team is working closely with our suppliers while we are also continuing to further diversify our supply. At the end of the day, we all want to remain competitive and are working toward the same goal, protecting the value we deliver to customers.

Mark: The tariffs.

They are focused on thoughtful solutions like looking at alternative sources of supply for input materials are all locations for manufacturing.

Mark: Like us.

Mark: Our suppliers are working hard to minimize the impact to customers or national sourcing team is working closely with our suppliers. While we are also continuing to further diversify our supply.

At the end of the day, we all want to remain competitive and are working towards the same goal protecting the value we deliver to customers.

Michael Medline: Another factor we're keeping close eye on is the U.S. dollar. This is an inherent risk we face doing business with companies outside of Canada. Since many of our suppliers, both in the U.S. and internationally, transact in U.S. dollars, shifts in exchange rates and a weakening Canadian dollar do have some impact. However, this isn't an overly material risk for us at this point in time, and we have a hedging program in place to help mitigate any short-term fluctuations. Ultimately, the biggest risk for us is not not actually in our own business, but the impact on the Canadian economy as a whole.

Another factor, we're keeping close eye on is the U S dollar.

Mark: This is an inherent risk we face doing business with companies outside of Canada.

Mark: Since many of our suppliers both in the U S and internationally transact in U S dollars with shifts in exchange rates and a weakening Canadian dollar do have some impact. However, this isn't an overly material risk for us at this point in time, and we have a hedging program in place to help mitigate any short term fluctuations.

Ultimately as the biggest risk for us.

Mark: Not actually in our own business, but the impact on the Canadian economy as a whole I do not want to downplay that but we can consumer environment will hurt the retail sector as a whole we do not know what will happen yet, but we feel as prepared as possible with the right team to manage through this current environment.

Michael Medline: I do not want to downplay this, a weakened consumer environment will hurt the retail sector as a whole. We do not know what will happen yet, but we feel as prepared as possible with the right team to manage through this current environment.

Michael Medline: Now looking ahead, while we don't make it a habit to talk about the quarter we're currently in, we feel we owe it to you to give some insight in these especially volatile times. As I mentioned earlier, we have been well-positioned in supporting Canadian products for some time. Even before tariff tensions began escalating, we have seen sales of Canadian products outpace our overall sales growth, and while it is still early days, we are now seeing this pick up further, especially since implementing new store signage and shelf labels to help customers find Canadian products. As well, when we look at Q4, quarter in right now, today, we're about halfway through our quarter.

Now looking ahead, while we don't make it a habit to talk about the quarter. We're currently in we feel we owe it to you to give some insight in these especially volatile times as I mentioned earlier, we have been well positioned in supporting Canadian products for some time, even before Tara pensions began escalating we have seen sales of Canadian products outpace our overall.

Mark: Sales growth and while it is still early days, we're now seeing this pick up further, especially since implementing new store signage and shelf labels to help customers find Canadian products.

Mark: As well when we look at Q4 quarter end right now today, we're about halfway through our quarter and from an overall top line perspective, we see similar momentum into Q3 quarter to date sales are off to a solid start.

Michael Medline: And from an overall top line perspective, we see similar momentum to Q3. Quarter to date sales are off to a solid start.

Michael Medline: Now, before I hand it over to Matt, I want to close by saying that while we are operating in strange and unpleasant times, and you would think it would be easy to have a doom and gloom mentality, it has been truly incredible to see Canadians come together. This is a strong and proud country, and as always, pulling together, we can weather any storm.

Mark: Now before I hand, it over to Matt I want to close by saying that while we are operating in this strange and unpleasant times.

Mark: And you would think it would be easy to have a doom and gloom mentality. It has been truly incredible to see Canadians come together.

Mark: This is a strong and proud country.

As always pulling together, we can weather any storm.

Matt Reindel: And with that, over to Matt. Thank you, Michael. Good morning, everyone. I will provide some details on our Q4 performance and then our expectations for the remainder of the year. And then we'll open up for your questions as normal.

Mac: Over to Mac.

Thank you Michael Good morning, everyone I will provide some details on our Q4 performance and then our expectations for the remainder of the year and then we'll open it up for your questions as normal.

Matt Reindel: So let's focus on Q3 first. Consumer behavior continued to gradually improve. And combined with strong execution on our initiatives, we delivered another quarter of solid financial performance. The highlights were improving top line momentum and continued gross margin expansion. Q3 adjusted EPS was $0.62, which was flat year-over-year. However, other income and share of earnings from equity investments was $11 million lower than last year. When you exclude these items from both years, our adjusted EPS was $0.03 higher than last year. Our food same-source sales was 2.6% in Q3, which was 70 basis points higher than last year and 80 basis points higher than Q2.

Mac: Let's focus on Q3 first consumer behaviors continue to gradually improve and combined with strong execution on our initiatives. We delivered another quarter of solid financial performance the highlights while improving top line momentum and continued gross margin expansion.

Mac: Q3, adjusted EPS was <unk>, 62, which was flat year over year.

Mac: Other income and share of earnings from equity investments was $11 million lower than last year. When you exclude these items from both years, our adjusted EPS was <unk> <unk> higher than last year.

Mac: Our food same store sales was two 6% in Q3, which was 70 basis points higher than last year, and 80 basis points higher than Q2.

Matt Reindel: We continue to see sequential same-source sales improvement in both full service and discount and across all regions. And as Michael mentioned earlier, we also see continued momentum halfway through Q4. Our gross margin rate, excluding fuel, increased by 43 basis points versus last year, which is stronger than expected, given the tough year over year comparisons. Similar to recent quarters, gross margin expansion stemmed from discipline management and in-store efficiencies such as improved shrink. While we are trending higher than this in fiscal 25, our medium term expectation continues to be delivering 10 to 20 basis points of gross margin expansion per year.

Mac: We continue to see sequential same store sales improvement in both foodservice and discount and across all regions and as Michael mentioned earlier, we also see continued momentum halfway through Q4.

Mac: Gross margin rate, excluding fuel increased by 43 basis points versus last year, which is stronger than expected given the tough year over year comparisons.

Similar to recent quarters gross margin expansion stemming from disciplined management and in store efficiencies such as improved shrink.

Mac: While we are trending higher than this in fiscal 'twenty five a medium term expectation continues to be delivering 10% to 20 basis points of gross margin expansion.

Mac: Yeah.

Matt Reindel: Now let me talk to SG&A. In Q3, after excluding adjusting items in both years, SG&A dollars grew by 4.2% year-over-year. However, this growth was mainly due to the accounts for our share-based long-term incentive programs, which was impacted by our share price appreciation and vesting level. Our SG&A rate when excluding adjusting items was 26 basis points higher than last year. The benefits from our cost reduction initiatives may not manifest themselves in a straight line, and quarter to quarter, we may be impacted by factors that are beyond our control, such as the impacts of the shared income incentive program I just mentioned.

Mac: Now, let me tell it to SG&A in Q3 after excluding adjusting items in both years SG&A dollars grew by four 2% year over year.

Mac: Uh huh.

Mac: This growth was mainly due to the accounts for our share based long term incentive programs, which was impacted by our share price appreciation and best thing level.

Mac: SG&A rates when excluding adjusting items was 26 basis points higher than last year.

Mac: The benefits from our cost reduction initiatives may not manifest themselves in a straight line quarter to quarter. We may be impacted by factors that are beyond our control such as the impact of the Czech Republic.

Mac: Incentive program I just mentioned.

Matt Reindel: So while the increase in SG&A of 4.2% was a little higher than we would have liked in Q3, we remain confident in the cost control measures that we've put in place. Our other income and share of earnings from equity investments came in as expected, being $11 million lower than last year, reflecting lower gains on disposals and our investment in Seam Plus, which was impacted by increased member participation and higher redemption of its loyalty program points. For fiscal 25, while we continue to expect our pre tax aggregate contribution from other income and share of earnings from equity investments to be in the range of 135 to 155 million, we do expect to be at the high end of that range.

Mac: So while the increase in SG&A of 42% was a little higher than we would have liked in Q3, we remain confident in the cost control measures that we've put in place.

Mac: Ah.

Mac: Other income and share of earnings from acquisition investments came in as expected being $11 million lower than last year, reflecting lower gains on disposals, and our investment in <unk>, plus which was impacted by increased member participation and higher redemption of its loyalty program points.

Mac: For fiscal 2005, while we continue to expect our pretax aggregate contribution from other income and share of earnings from equity investments to be in the range of $135 million to $155 million, we do expect to be at the higher end of that range.

Mac: Our effective tax rate in Q3 was 27%, which is higher than the 24% we had last year.

Matt Reindel: Our effective tax rate for Q3 was 27%, which was higher than the 24% we had last year. The revaluation of tax estimates pushed our tax rate higher this year, but have the opposite impact last year. For Fiscal 25, excluding the effects of any unusual transactions or differential tax rates on property sales, we continue to estimate that our effective income tax rate will be between 25 and 27%.

Mac: The revaluation of tax estimates pushed out tax rate higher this year, but have the opposite impact last year.

Mac: For fiscal 'twenty, five and excluding the effects of any unusual transactions or differential tax rates on property sales. We continue to estimate that our effective income tax rate will be between 25 and 27%.

Matt Reindel: Our balance sheet remains strong, driven by solid cash generation and disciplined capital spend. In Q3, our CapEx was $188 million, mainly on store renovations, construction of new stores, and IT investment. We remain on pace to spend 700 million on CapEx in fiscal 25, with approximately 50% of this investment being spent on store renovations and new stores. Our share buyback program is on track towards the 400 million intention for fiscal 25 and as of this week we've repurchased 8.6 million shares for a total consideration of 340 million.

Mac: Our balance sheet remains strong driven by solid cash generation and disciplined capital spend.

Mac: In Q3, our Capex was 188 million, mainly on store renovations construction of new stores and it investments.

Mac: We remain on pace to spend $700 million in Capex in fiscal 'twenty five with approximately 50% of this investment being spent on store renovations and new stores.

Mac: Share buyback program is on track towards the $400 million intention for fiscal 'twenty five and as of this week, we've repurchased eight 6 million shares for a total consideration of $340 million.

Matt Reindel: So, to cap it off, we're very pleased with our Q3 performance, where we delivered improvements across many key financial metrics.

Mac: So it's a cap it off we're very pleased with our Q3 performance, while we delivered improvements across many key financial metrics.

Matt Reindel: Now before I hand the call back to Katie, let me say a few words about my retirement. Firstly, I very much appreciate those kind words from Michael earlier. So thank you for that. I must say that leaving Empire will be bittersweet. I've thoroughly enjoyed my time and I'm very proud of what we've been able to accomplish over the past six years, particularly the sustainable platform we've built for the future. But as we come to the end of our current three year strategic plan and begin planning for the next cycle, this is the right time for me to step aside and allow Costa to come in and partner with Michael.

Speaker Change: Now before I hand, the call back to Casey, Let me say a few words about my retirement.

Casey: Lee I very much appreciate those kind words from Michael answer Thank you for that.

Speaker Change: I must say that leaving Empire will be bittersweet.

Casey: <unk> thoroughly enjoyed my time at <unk>.

Casey: Very proud of what we've been able to accomplish over the past six years, particularly the sustainable platform, we built for the future.

Speaker Change: But as we come to the end of our current three year strategic plan and begin planning for the next cycle. This is the right time for me to step aside and allow cost to come in and partner with Michael.

Matt Reindel: So I'm really looking forward to seeing what the company will deliver moving forward.

Casey: I'm really looking forward to seeing what the company will deliver us moving forward.

Katie Brine: And with that, I'll hand the call back to Katie for your questions. Great. Thank you, Matt.

And with that I'll hand, the call back to Casey's for your questions.

Casey: Thank you Matt.

Katie Brine: Ina, you may open the line for questions at this time. Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star four by the one on your telephone keypad. And should you wish to cancel your request, please press star four by the two. If you're using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question.

Casey: You May open the line for questions at this time.

Speaker Change: Thank you ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press star followed by don't want on your telephone keypad and should you wish to cancel your request.

Speaker Change: Ill follow up with you if you're using a speaker phone. Please lift the handset before pressing any keys one moment. Please for your first question.

Speaker Change: Your first question comes from the line of Natalie <unk> from RBC. Please go ahead.

Irene Nattel: Your first question comes on the line of Irene Nattel from RBC. Please go ahead. Thanks and good morning, everyone.

Natalie: Thanks, and good morning, everyone and before I ask my question. Congratulations Matt We will definitely Miss you are happy to hear that youre going to be around a while.

Irene Nattel: And before I ask my question, congratulations, Matt, we will definitely miss you. Happy to hear that you're going to be around for a little while. As for my question, I'm wondering about the encouraging signs that you're seeing in terms of consumer spending behavior, basket up, can you talk about the composition of the basket, you know, item count, categories, and whether you're seeing anything to any offsetting still signs of more caution. There's many indicator trending in the right direction over a year. So yes, same store sales, but We're particularly pleased with the growth we have in FRESH, which is one of our strengths.

Mike Chinn: Sure Mike Chinn.

Speaker Change: Yeah.

Speaker Change: The encouraging signs that youre seeing in terms of consumer spending behavior basket.

Speaker Change: Can you talk about the composition of the basket.

Speaker Change: Item <unk> to add categories, and whether youre seeing anything any offsetting still cycles of certain more caution.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: There's many.

Speaker Change: Indicators are trending in the right direction year over year, So, yes same store sales, but.

Speaker Change: We're particularly pleased with the growth we have in fresh.

Speaker Change: One of our strength.

Michael Medline: So FRESH is growing faster, but it's growing in every category right now. Basket size is growing, people are shopping less stores, they are back to more natural behaviors. It's not natural to shop many stores when you have good offer and good value in the store you're shopping. So this is a good, so transactions continue to be up, but the biggest thing is basket size and unit per basket is going up. And the biggest growth is coming from FRESH.

Speaker Change: So fresh is growing faster, but it's growing in every category right. Now basket size is growing people are shopping less stores. They are back to a more natural behaviors stuffed natural to shop many stores.

Speaker Change: Do you have a good offering good value in the store you're shopping.

Speaker Change: This is this is a good transaction continues to be up but the biggest thing is basket size units per basket is going up and the biggest growth is coming from fresh.

Michael Medline: Yeah, I mean, it's a good answer by Pierre. And I just want to add that your last part of your question, we're not seeing any warning signs at this point. In fact, if we didn't know about, if we didn't read the newspapers, and watch TV, we wouldn't know anything was going on. When we look at our numbers, they continue, we continue to see the momentum we saw in Q3 and green shoots that we've been talking about for what we've been predicting for 18 months, we've now been seeing them four quarters in a row. And so far, the quarter of things are normal.

Speaker Change: Great.

Speaker Change: Good answer by Karen I, just want to add that to your last part of your question, we're not seeing any warning signs at this point in fact, if we didn't know about treating read the newspapers.

Speaker Change: And watch TV, we Wouldnt know anything was going on when we look at our numbers continue we continue to see the momentum we saw in Q3 and the green shoots that we've been talking about for.

Speaker Change: But really what we've been predicting for 18 months, we've been averaging in the four quarters in a row.

Speaker Change: And so for the quarter things are are normal.

Speaker Change: And we're not saying anything.

Michael Medline: And not seeing anything, any cautious behavior other than as I said, customers are checking the label to see where things are made.

Speaker Change: Any cautious.

Speaker Change: Rather than as I said.

Speaker Change: Customers are checking the label to see where things there Matt.

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

Speaker Change: That's really interesting. Thank you and then just one other question if I may.

Irene Nattel: And then just one other question, if I may, on the e-commerce side, great to see the increase in volume coming through the partnerships. What is your loyalty data telling you at this point about any conversion from, let's say, Instacart and Uber Eats into Voila? Thank you. That's a great question. And as you know, that's a key piece of our strategy moving forward is to take as many of those immediacy-based customers and convert them onto Voila. I would say it's probably a little early, Irene. It's as excited as we are about the opportunity and the increased sales of this immediacy-type business giving us.

Speaker Change: E Commerce side, great to see the increase in volume coming through the partnership.

Speaker Change: How what are you what is your loyalty data telling you at this point.

Speaker Change: Any conversion from let's say <unk> or eight inch of wildlife.

Thank you.

Speaker Change: Okay.

Speaker Change: That's a great question.

Speaker Change: That's a key piece of our strategy moving forward is to take.

As many of those immediacy based customers and convert them onto a month ago.

Irene: I would say, it's probably a little early Irene.

Speaker Change: Yes.

Speaker Change: As we are about the opportunity and the increased sales of this immediacy type business, giving us we've really just started so we do need some time to get off the under the table and begin to mine the data and start to convert those customers over to <unk>.

Michael Medline: We've really just started. So we do need some time to get our feet under the table and begin to mine the data and start to convert those customers over to Voila. So I would say it's really too early yet.

Speaker Change: So I would say, it's really too early yet.

Irene Nattel: Interested. Thank you.

Speaker Change: And just say thank you.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Thank you Andrew.

Chris Lee: And your next question comes from the line of Chris Lee from The Jordan, please go ahead. Good morning, everyone. Please let me add my congratulations to you, Matt, and all the best as you begin the next new chapter of your life. Michael, thanks so much for all your comments about sort of the impact on tariffs. And my question, first question is, you know, if you assume the tariffs go kind of full impact on April 2, how quickly and broadly will we see high inflation through the grocery store? And one kind of sort of ascertain is, like, is it going to be more gradual in a manner where maybe the consumers can manage it?

Speaker Change: Your next question comes from the line of Chris Sliva Leisure Dan. Please go ahead.

Speaker Change: Hi, good morning, everyone.

Speaker Change: Please let me add my congratulations to you mats and all the best as you begin the next chapter of your life.

Speaker Change: Michael Thanks, so much for all your comments about sort of the impact on tariffs and my question. First question is if you assume that tariffs go kind of full impact on April 2nd.

Speaker Change: How quickly and broadly.

Speaker Change: We see high inflation through the grocery store and that one tenant sort of ascertain is.

Speaker Change: Like is it going to be more gradual in a manner, where maybe the consumers can manage it or do you expect kind of a really a big spike right off the bat from an inflation perspective, assuming the tariffs are fully pets impact on April 2nd Thank you.

Michael Medline: Or do you expect kind of a really a big spike right off the bat from an inflation perspective, assuming the tariffs are full impact on April 2? Thank you.

Pierre St. Laurent: Pierre, you're very close to this point. So as Michael said in his introduction, It's good to remember or remind that. Our exposure to U.S. product is around 12% annually, so this is not the biggest portion of our Sales and it's declining. Every week we are seeing a decline, a rapid decline of US product sales. So our exposure will continue to reduce over time. And we are in winter, and I guess summer is coming. So our exposure will continue to decline over the next quarters. And as you know, so right now, US product are in decline and without tariff on it.

Barry: Barry Youre very close to just wondering.

Michael: So as Michael said in his.

Barry: Production.

Barry: It's <unk>.

Barry: Good to remember our remaining debt.

Barry: Our exposure to U S product is around 12%. So this is not the biggest portion of our <unk>.

Barry: And it's declining.

Barry: The weak we are seeing a decline a rapid decline of U S product sales.

Barry: So our exposure will continue to reduce overtime and we are in the winter.

Barry: I guess summer is coming.

Barry: So our exposure will continue to decline over the next quarters.

As you know so right now you ask for their car in decline and without tariffs on it. So imagine that we will increase if we have to increase this is not our intention so far.

Pierre St. Laurent: So imagine the day we will increase if we have to increase. This is not our intention so far. When product will be 25% more expensive, the US product, I don't think people are interested to pay more or to pay 25% for US product right now. So we feel pretty good. And like Michael said, also, in most categories, we have alternative from Canadian on a non-US product in every single categories offer an alternative at a reasonable cost or lower cost than US product for our customers. So we feel pretty good. And you know what, over the last years, including in produce, we developed a very diversified source of supply for produce around the world for obvious reasons.

Barry: Part of that will be 25% more expensive to use.

Barry: I don't think people are interested to play more or to pay 25% for U S product right now so we feel pretty good.

Barry: Michael said also in most categories we have.

Barry: Turning to data from <unk>.

Barry: Canadian on a non U S products and every single categories offer an alternative at a reasonable cost or lower cost in use for our customers.

Barry: We feel pretty good.

Barry: Over the last year.

Barry: Ears, including in credit.

Barry: We developed a very diversified source of supply for produced around the world for obvious reasons.

Pierre St. Laurent: So even in produce, the team feels really, really good to find alternative and work with suppliers to avoid any potential inflation. And again, 12% on annual basis. It was for the last 52 weeks, and it's declining right now very quickly. And summer is coming and people are not interested to pay 25% more for US products.

Barry: So even if the team feels really really good to find alternative and work with suppliers to.

Barry: Avoid any potential inflation and again.

Barry: Two 8% on annual basis.

Barry: For the last 52 weeks and it's declining right now very quickly and summer is coming and people are not interested to pay 25% more of our U S products.

Chris Lee: Okay, no, that's very helpful. Thank you.

Barry: Okay. That's very helpful. Thank you.

Michael Medline: My other question is just on e-commerce. You know, I just mentioned Vola is posting, continue to post very solid double-digit growth. Your competitors are also posting solid growth as well. So my question is, just based on your data, is Vola maintaining or growing market share? And also, secondly, I just want to confirm that the losses in Vola are continuing to improve on a year-over-year basis. Thanks. Yeah, e-commerce penetration is growing. Like Pat said, the same-store sales from Gwala is growing. We are focusing on the existing CFC and we're seeing benefit of focusing on the existing one.

My other question is just on e-commerce.

Barry: As just mentioned, while I use posting continued to post very solid double digit growth.

Barry: Your competitors also posting solid growth as well. So my question is just based on your data.

Barry: Maintaining or growing market share and also secondly, I just wanted to confirm that the losses and whatnot are continuing to improve slab on a year over year basis.

Barry: Okay.

Speaker Change: Yeah e-commerce penetration is growing.

Barry: That said.

Barry: The same store sales from boiler is growing we are focusing on the existing CFC and we're seeing benefits of focusing on the existing one I think it was the right decision to focus on the tree, we have right now and we're very pleased with the same store sales for all of our CFC very pleased also with the improvement we are doing it.

Michael Medline: I think it was the right decision to focus on the trio we have right now. And we're very pleased with the same-store sales from our CFCs. Very pleased also with the improvement we're doing on the bottom line on efficiency. The team is doing an amazing job to optimize everything without compromising sales growth. And we're very, very pleased with the progress we've made so far this year. And with the partnership so far, and like Pat said, early days, we just launched Quebec and Atlantic two days ago. But so far, we're not seeing cannibalization and we're seeing a growth in same-store sales at Gwala as today.

Barry: The bottom line.

Barry: On the efficiency of the team is doing an amazing job too.

Barry: Optimize everything without compromising sales growth.

We're very very pleased with the progress we've made so far this year and with the partnership so far in <unk>.

Barry: That said early days, we just launched Quebec, and the Atlantic two days ago.

Barry: But so far we're not seeing cannibalization and we are seeing.

Barry: Our growth in same store sales that boiler.

Michael Medline: So, this is the situation.

Barry: To date so.

Speaker Change: This is Mike Matthew something else right.

Matt Reindel: Mark and Matthew, you have something else to add? Yeah. And just to confirm, Chris, for your second point, yes, all CFCs are improving their financial performance. So, their losses are decreasing. So, as we've said on many IR meetings now, Gwala is a creature to our business starting in F25. Okay, perfect.

Speaker Change: Chris I feel second point, yes oil cfcs are improving financial performance, so that losses are decreasing.

Speaker Change: As we said on.

Many IR meetings now.

Speaker Change: <unk> to our business starting in that 25.

Speaker Change: Okay perfect.

Chris Lee: And I, sorry, just maybe one quick follow up, just because you mentioned the third party partnerships. I know it's still very early for you guys. But I'm wondering, you know, as the third party econ revenues continue to grow, how much of the pressure do you think they would have in terms of fees on your SGN expenses? Do you expect on a EBITDA basis, you're more than offset by just a higher basket on a gross profit? So maybe on an EBITDA basis is neutral? Yeah, just just thinking about the pressure on SGN expenses as the third party revenues continue to grow.

Speaker Change: Just maybe one quick follow up just because you mentioned that.

Speaker Change: Third party partnerships I know, it's still very early for you guys, but I'm wondering you know as the third party E. Com revenues continued to grow how much of the pressure do you think they would have in terms of fees.

Speaker Change: SG&A expenses do you expect on that EBITDA basis, you will more than offset by just the higher basket on a gross profit. So maybe on the EBITDA basis is neutral yes.

Speaker Change: Just thinking about the pressure on SG&A expenses, that's the third party revenues continue to grow.

Matt Reindel: Yeah, I mean, It's a good question, Chris. You know, unlike while we know that we are making losses on the this immediacy type business, we make money from day one. So this is immediately accretive to our business. Of course, we have to pay some commissions. So the profitability is not as high as it is for a regular purchase in a store. But it immediately is accretive to earnings per share from day one. Perfect.

Chris: It's a good question Chris.

Speaker Change: Unlike a lot of work.

Speaker Change: We know that we are making losses.

Speaker Change: On the this immediacy type business, we make money from day. One. So this is immediately accretive to our business.

Speaker Change: Of course, we have to pay some commissions.

Speaker Change: So the profitability is not as high as it is for a regular purchase in a store.

Speaker Change: But immediately is accretive to earnings per share.

Speaker Change: From Daiwa.

Speaker Change: Perfect, Thanks, and all the best.

Chris Lee: Thanks and all the best. Thank you, Chris.

Speaker Change: Okay.

Thank you Chris.

Speaker Change: Thank you and your next question comes from the line of stomach Chen from BMO capital markets. Please go ahead.

Tamy Chen: And your next question comes on the line of Tamy Chen from BMO Capital Market. Please go ahead. Hi, good morning. Thanks for the question. I wanted to go back to your comments on the quarter to date, fiscal Q4. So you've had a couple quarters of sequentially improving comps, which has been great to see. When you talk about this momentum that has continued so far in Q4, I just wanted to clarify, are you continuing to see your comp so far this quarter accelerate sequentially like it has the last couple quarters? Is that what you mean specifically?

Hi, good morning, Thanks for the question.

Speaker Change: I wanted to go back to your comments on the quantity date fiscal Q4.

Speaker Change: So you had a couple of quarters.

Speaker Change: Sequentially, improving comp, which has been great to see.

Speaker Change: When you talk about this momentum that has continued so far in Q4 I just wanted to clarify are you continuing.

Speaker Change: Comp so far this quarter accelerating sequentially like it has the last couple of quarters is that what you mean.

Tamy Chen: By the moment?

Speaker Change: Hopefully by the momentum.

Michael Medline: It's a good question and a good try, but I've got to be careful what I say, obviously. And what I wanted to say, because we are getting so many questions about what's going on with the current unpleasantness, is that we're experiencing solid and consistent results. So I don't want to comment any more than that. I just wanted to give our owners, our investors, a sense that so far they don't have much to worry about. Okay, got it. Fair enough.

Speaker Change: Yes, that's a good question and a good try them.

Speaker Change: Be careful what I say obviously.

Speaker Change: What I wanted to say because we're getting so many questions about what's going on with current unpleasantness.

Speaker Change: Is that where we're experiencing solid and consistent.

So I don't want to comment any more than that.

Speaker Change: Just wanted to give our owners our investors a sense that.

Speaker Change: So far they don't have much to worry about.

Speaker Change: Okay.

Speaker Change: Okay got it fair enough.

Tamy Chen: And I had another question on e commerce here. So from what you can see in the industry, would you say the growth in this channel here for the industry is more in that immediacy? And with respect to Voila, like, can you remind us, is there any way for Voila to be able to service itself that immediacy or cannot in your, your focus is to just try to convert those Uber and Instacart customers to Voila, which is not immediacy? Great question, Sammy. Let me cover both and Pierre can chime in if he would like. But so first of all, in terms of the growth, so we're seeing growth in both parts of the part of the sector.

Speaker Change: And I had another question on.

Speaker Change: E Commerce here so.

Speaker Change: What you can see in the industry would you say that.

Speaker Change: And the channel here.

Speaker Change: History of more immediate.

And with respect to where a lot like can you remind us is there any way for a while ought to be able to service itself that immediacy or I cannot hear you. Okay just try to convert those.

Speaker Change: And car customers to rollout which is not.

Speaker Change: Great question, Amit, let me cover by Cynthia can chime in if he would like but so there's no intent to the garage. So we're seeing growth in both parts of the pause.

Speaker Change: Of the sector. So there is growth in the immediacy segment and there's growth in what I would call the ball of our segment.

Michael Medline: So there's growth in the immediacy segment and there's growth in what I would call the voila segment. So we're seeing growth in both, which is great news. And then in terms of could voila service the immediacy, the answer is Yes and no. Yes, in that our technology, we could service immediacy through the Ocado delivery platform. But it's not really set up to do that. So, you know, when we set up that business, it's based on a much bigger basket. It's based on a full shop. And that's really where the efficiency of that model comes from.

Speaker Change: So we're seeing growth in both which is great news.

Speaker Change: And then in terms of could Waller.

Speaker Change: That's the immediacy the ban.

Speaker Change: Answer is yes.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: All technology, we could.

Speaker Change: Service immediacy through the Ocado delivery platform.

Speaker Change: But it's not really set up to do that so when we set up that business. It's based on a much bigger basket.

Speaker Change: Based on a full shop.

Speaker Change: That's really where the efficiency of that model comes from so.

Michael Medline: So, what we're in now is a nice sweet spot, where we're letting Boala look after the full basket with a much bigger basket size. And the immediacy covers a smaller basket size and that kind of immediate need for delivery. So, yeah, right now, we're happy to leave both operating in isolation. Great, thank you.

Speaker Change: What we're in now is a nice sweet spot, whether we're lapping boiler.

Speaker Change: The full basket.

Speaker Change: With a much bigger basket size and the immediacy covers a smaller basket size and that kind of an immediate need for deliveries.

Yes, right now we're happy with to leave both operating in isolation.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Great. Thank you.

Speaker Change: Okay.

Vishal Shreedhar: Thank you. And your next question comes in the line of Vishal Shreedhar from National Bank. Please go ahead. Hi, thanks for taking my question. Just with respect to the volatility that you referenced in your prepared remarks at the beginning of the call. wondering how Empire is thinking about maintaining or creating some sort of flexibility to adjust to whatever the the the backdrop may present. So I know, you know, it could be pressure on the consumer or pressure on inflation and or both. And, and this is at a time when population growth is slowing, and certainly industry square footage growth is increasing.

Speaker Change: Thank you and your next question.

Speaker Change: Comes from the line of Michelle's trade higher from National Bank. Please go ahead.

Michelle: Hi, Thanks for taking my question.

Michelle: With respect to the volatility that you referenced.

Michelle: In your prepared remarks at the beginning of the call.

Speaker Change: Wondering how empire is thinking about it.

Speaker Change: Maintaining or creating some sort of flexibility to adjust to whatever the.

The backdrop may present, so I know.

Speaker Change: It could be pressure on the consumer or pressure on inflation and or both.

And this is at a time on population growth is slowing and certainly industry square footage growth is increasing so just as you look at this this volatile time period and granted you've operated through a.

Michael Medline: So just as you look at this, this volatile time period, and granted, you've operated through a few of those different types of volatility time periods. How do you think about this and, and being able to preserve that financial framework that you set up?

Speaker Change: A few of those different types of volatility time periods. How do you think about this and and being able to preserve that financial framework that you've set up.

Michael Medline: That's a great question. And first of all, You know, I don't like predicting the future, especially in these kind of times, but I don't think it's going to be our business, which is highly, highly affected by all this. We'll be affected, but we'll be able to roll with the punches. And I think the industry will, to be honest with you. So the bigger worry is if or when there's going to be more of an impact on the Canadian economy from this, first of all, from the uncertainty, let alone any real byproducts of this. And I think we've shown in the past that as you said, we're really good at that.

Speaker Change: It's a great question and first of all.

Speaker Change: I don't like predicting the future, especially in these kind of times, but I don't think its going to be the bar business, which is.

Speaker Change: Highly highly affected by BIOLASE will be affected, but we'll be able to roll with the punches and I think the industry well to be honest with you.

Speaker Change: Sure.

Speaker Change: The bigger worry us.

Speaker Change: Therefore, when theres going to be more of an impact on the Canadian economy from this one first.

Speaker Change: First of all from the uncertainty let alone any.

Speaker Change: Real byproducts of this.

Speaker Change: And I think.

Speaker Change: Shown in the past.

Speaker Change: As you said, we're really good at that.

Michael Medline: But even in times of worse, the winds in our sails, which it may not be, by the way, we can navigate. I like the strategy we have right now in terms of in terms of being able to grow our business and be very safe going forward. We've never seen cash generation in our history like this because we've changed the way we do business and we're better operators now, we're better executors. And I believe that there are advantages to being a Canadian-based retailer which keeps the money in our country and that many Canadians will appreciate that.

Speaker Change: But even in times of.

Speaker Change: The wins in our sales, which it may not be by the way.

Speaker Change: And we can we can navigate.

Speaker Change: I like the strategy, we have right now in terms of.

Speaker Change: And in terms of being able to.

Speaker Change: Grow our business and be very safe.

Speaker Change: Going forward.

Speaker Change: We've never seen cash generation in our history like this because of our because we changed the way, we do business and we're better operators than with better executed.

Speaker Change: I believe that there are advantages to being a.

Our Canadian based retailer, which keeps the money in our country.

Speaker Change: Many Canadians will appreciate that.

Michael Medline: So although no one likes these volatile and uncertain times, we'll be strong like this country's strong. Now we every day you pick up, you open your phone, there's new news. If you reacted to every piece of news out there, you'd be whipping along, you wouldn't even be able to operate a business anymore. We're, we don't do that. We're going to be calm and strong and like, like the rest of this country. And I think that we're going to do pretty well through this.

Speaker Change: So.

Speaker Change: Although no.

Speaker Change: No one likes these volatile.

Speaker Change: Certain times.

Speaker Change:

Speaker Change: We'll be we'll be strong like this country's strong again I don't we're not.

Speaker Change: Every day you pick up.

Speaker Change: Are you open your phone they don't even know.

Speaker Change: There is new news if you react to every piece of news out there you'd be with him along you would need to be able to operate a business anymore.

Speaker Change: We don't do that we're going to be calm and strong and like the rest of this country and I think that we're going to do pretty well through that.

Speaker Change: But we just we have to acknowledge these are strange times.

Michael Medline: But we just we have to acknowledge these are these are strange times.

Speaker Change: Thank you for that color and just shifting shifting to shrink wondering how that is evolving and in particular on the U S. Based products are you seeing that shrink.

Pierre St. Laurent: Thank you for that color and just shifting, shifting to shrink, wondering how that is evolving and in particular on the US based products. Are you seeing that shrink magnify or? Is that a, is that a head? Hello. It's very early days, but we're not seeing any shrink from US suppliers right now. And overall, into this quarter, we continue to improve shrink, which is good for our margin, but it's not only that, like we said at the beginning. So it's one of the elements. And it's an area of focus to continue to deliver good margin and continue to reinvest in good pricing.

Speaker Change: Magnifier.

Speaker Change: Is that a is that a headwind.

Speaker Change: Hello.

Speaker Change: It's very early days, but we're not seeing any shrinking from U S suppliers right balance.

And overall in this quarter.

Speaker Change: We continue to improve shrink.

Speaker Change: It's good for our margin, but it's not only that we said at the beginning so it's one of the elements and it's an area of focus to continue to deliver a good margin and continue to reinvest.

Speaker Change: And good pricing so.

Pierre St. Laurent: So shrink continue to improve, but we're not seeing any particular change in the US products so far. Thank you.

Speaker Change:

Speaker Change: Shrink continues to improve but we're not seeing any particular change in the U S.

Speaker Change: So far.

Speaker Change: Thank you.

Speaker Change: Okay.

Speaker Change: Thank you and your next question comes from the line of Michael Van <unk> from TD Cowen. Please go ahead.

Michael Van Aels: And your next question comes from the line of Michael Van Aels from TD Coven. Please go ahead. Good morning. Thank you.

Speaker Change: Yes.

Speaker Change: Hi, good morning, and thank you.

Michael Van Aels: And happy retirement, Matt, when it does, when that day does come. I wanted to touch on a few of the items that were already brought up, but in different a little differently, though. First of all, very impressive growth on the on the e commerce. But if we assume your e commerce penetration is about 4%, 4% or so, would that would this mean that pretty much all your same search sales growth is coming from ecommerce at this point. No, not even not even not. It's mostly the same story sales growth is coming from our Rick Zmorder by quite a margin, so no.

Speaker Change: Yes.

Speaker Change: Happy retirement, as Matt pointed out when that day does come.

Speaker Change: I wanted to touch on a few of the items that were already brought up I didn't different a little differently, though.

Speaker Change: First of all a very impressive growth on the on the E Commerce.

Speaker Change: But if we assume your ecommerce penetration is about 4%, 4% or so what does this mean that.

Speaker Change: Pretty much all your same store sales growth is coming from e-commerce at this point.

Speaker Change: [laughter].

Speaker Change: Yes.

Speaker Change: No not even it's hard.

Speaker Change: It's closer to the same store sales growth is coming from our.

Speaker Change: Bricks and mortar.

Matt Reindel: And offline, I think, Matt, you could talk to Michael on this. Yeah, I mean, just to echo that, even if you excluded all of the Uber and Instacart sales, like the entirety of it, our same store sales would still be higher than it was in the previous quarter. So it's giving us a bump, but it's the core business that's really generating the improvement. All right.

Speaker Change: Sure.

Matt: The offline I think Matt you could talk to my quota.

Matt: Just just even even if you excluded all.

Matt: All of the Eva in industry sales.

Matt: The entirety of it.

Matt: Same store sales would still be higher than it was in the previous quarter.

Matt: It's giving us a bump, but that's the core business.

Matt: Really generating the improved momentum.

Matt: Okay Alright.

Matt Reindel: Yeah, we're gonna go off. I'll handle that offline. Thank you. And then your You're seeing plus loyalty costs that are in investment and other. So that increase that we saw, was some of that an accounting adjustment and others higher redemption rates? Or is that all something that we should expect to continue going forward? No, it's not something you should expect to see going forward. So basically, as one of our peers did, with the loyalty program, what we are seeing in these current times is very high member participation and very strong redemption rates. By the way, that's a really good thing for our loyalty program.

Matt: Did that handle that offline. Thank you and then.

Your.

Matt: Youre seeing.

Matt: Plus loyalty costs that are an investment in another.

Speaker Change: So that increase that we saw was some of that an accounting adjustment and others higher redemption rates or is or is that all something that we should expect to continue going forward.

Speaker Change: No. It's not something you should expect to see going forward. So it basically.

Speaker Change: One of our peers did.

Speaker Change: With the loyalty program, what we are seeing in these current times is very high but the participation.

Speaker Change: <unk> strong redemption rates.

Speaker Change: By the way that's a really good thing for our loyalty program.

Matt Reindel: That's exactly what we want is high member engagement. But when you actuarially determine your loyalty liability, you're using assumptions, and those higher redemption rates means a higher redemption assumption. So that's basically what that was for us, because we don't consolidate SEAN, our investment in SEAN is an equity investment, we have a 33% ownership in that program. So we take a 33% of the profits and loss of that entity every year into our P&L. So when that loyalty liability was revalued based on the latest assumptions on redemption, then we take our share of that adjustment. So it's not something that we would expect to see every quarter, something that we saw up just in Q3.

Speaker Change: What we want.

Speaker Change: Hi.

Speaker Change: Engagement.

Speaker Change: But when you actuarially determined your loyalty liability using assumptions and there's higher redemption rates.

Speaker Change: Means.

A higher redemption assumption. So that's basically what that was for us because we don't consolidate seen our investment in <unk> as an equity investment of 33% ownership in that program. So we take a 33% of the profit and loss of that entity every year and to our P&L, so but not loyalty.

Speaker Change: <unk> was.

Speaker Change: We value based on our latest assumptions on redemption, and we take our share of that adjustment. So it's not something that we would expect to see every quarter something that we saw just in Q3.

Speaker Change: Okay, perfect and then.

Michael Van Aels: Okay, perfect. And then last question is on on the tariff impact on produce I know even product that comes up from Mexico or sometimes in South America like it's come coming up through the US many times is that to your knowledge, your understanding is the terrorists would still be Applied to product coming from Mexico, for example, through the U.S. into Canada. It's a bit complex, but... And the simple answer is no, when it's coming from a different country than US, we're not having to carry tariff on it. And as you said, we have a good source of supply in South America, in Europe, in North Africa.

Speaker Change: Last question is on the tariff impact on prior year's I know even product that comes up from Mexico are sometimes in South America like it's coming.

Speaker Change: Coming up through the U S. Many times is that.

Speaker Change: Do you do your understanding is that tariffs would still be <unk>.

Speaker Change: <unk> the product coming from Mexico for example, through the U S into Canada.

Speaker Change: It's complex.

Speaker Change: And the simple answer it's know when it's coming from a different country than U S. We're not having to carry tariff on it.

Speaker Change: And as you said we have.

Speaker Change: So it's a good source of supply in South America.

Speaker Change: And.

Speaker Change: In Europe.

In North Africa.

Pierre St. Laurent: So yes, produce is an area where we have more exposure to, but again, it's a small portion of total sales, as we said, 12% today on U.S. product, including produce. and it's going down rapidly. So I don't have the exact number for produce, but produce is a portion of it. But when you look at total sales, it's marginal. And yes, but it's not only the tariff situation will impact the produce inflation, it's the Canadian dollar. All the transactions are traded in Canadian dollars, Canadian dollars having an equal impact, or maybe more sometime than the tariff on produce inflation.

Speaker Change: So yes for those is an area, where we have more exposure to but again.

Speaker Change: It's a small portion of total sales as we said.

Speaker Change: 12%.

Speaker Change: Dave.

Speaker Change: U S product, including produce and its going down rapidly so.

Speaker Change: I don't have the exact number for produce with producers that portion of it but when you look at total.

Speaker Change: It's marginal and yes, but it's not only the <unk>.

Speaker Change: We shouldnt have the impact of produce inflation, it's the Canadian dollar all of the transaction are traded in Canadian dollars. So can and is having an equal impact or maybe more sometime.

Speaker Change: Curious on produce.

Speaker Change: Fisher.

Speaker Change: Yeah.

Speaker Change: Okay. Thank you and just last question.

Michael Van Aels: Thank you.

Matt Reindel: Just last question. Can you update us on your square footage ambition, growth ambitions for both fiscal 25 and fiscal 26? Yeah, so as we said recently, I think we're targeting approximately one and a half percent square footage growth. Again, as we finish kind of the meat of our renovation cycle, we can start to allocate a little bit more capital away from renovations towards new stores. It's not a massive change, but it's a notable change. So one and a half percent, and that's a net number, right? So we still have some locations that we might close, like Inconvenience and Liquor, there's some tangential stores we might close.

Speaker Change: Can you just.

Speaker Change: Get us on your square footage ambition and growth ambitions for both fiscal 'twenty five in fiscal 'twenty six.

Speaker Change: Yeah.

Speaker Change: Yeah. So as we've said recently I think when targeting approximately one 5% square footage growth.

Speaker Change: But again as we are.

Speaker Change: Finished kind of the meat of our renovation cycle, we can start to allocate a little bit more capital away from renovations towards new stores.

Speaker Change: It's a massive change, but it's a notable change that one 5% and Thats a net number right. So we still have some locations that we might close I inconvenience and liquor. There's some some tangential schools, we might close so it's a net number.

Matt Reindel: So it's a net number. But one and a half percent is a good number for a couple of years. And is that the case in fiscal 25? Or that will that kick in and It really starts in fiscal 26. We will have a small increase in 25, but it's more in 26. Thanks very much. Thank you.

Speaker Change: One 5% is a good number for a couple of years.

Speaker Change: And is that the case in fiscal 'twenty, five or that alone will not kick in in fiscal 'twenty six.

Speaker Change: It really starts in earnest in fiscal 'twenty six we will have a small increase in 'twenty five.

More than 26.

Speaker Change: Great. Thanks very much.

Speaker Change: Yeah.

Speaker Change: Thanks, Mike.

Speaker Change: Thank you and your next question comes from the line of Mark Petrie from CIBC. Please go ahead.

Mark Petrie: And your next question comes from the line of Mark Petrie from CIBC. Please go ahead. Yeah, good morning.

Mark Petrie: Good morning, all.

Mark Petrie: I'll echo my congratulations to you, Matt, and wish you all the best on your next chapter. First, just on gross margin, hoping you could talk a little bit more about the trend that you've seen there, and specifically the promotional penetration that you called out now sort of falling year over year. Do you attribute that entirely to sort of the market and the consumer? Or were there some shifts in your tactics or execution that would have contributed to that? Our execution is very consistent. Very good discipline over the last quarters. We continue to see that discipline, very good promo mix management, very good usage of promo optimizations tools that we implemented years ago, and the team is working really well with it.

Speaker Change: My congratulations to you, Matt and wish you all the best on your next chapter.

Speaker Change: First just on gross margin, hoping you could talk a little bit more about the trends that you've seen there and specifically the promotional penetration that you called out now sort of falling year over year.

Speaker Change: Do you attribute that entirely to sort of the market and the consumer or were there some shifts in your tactics or execution that would have contributed to that.

Speaker Change: Our execution is very consistent very good discipline over the last quarters, we continue to see that discipline very good promo mixed management.

Speaker Change: Very good usage of promo optimization tools that we implemented two years ago and the team is working really well with it.

Matt Reindel: But as we said, the promo penetration is going down slightly, which is Good for pressure on margin. So it's one element, but it's not the only element. As we said earlier, the mix of sales is improving because we're selling more fresh product than grocery product. We're having less shrink. The TPR is lower than it was at the same time last year. And there's continuous discipline and execution in merchandising and in stores. So it's a lot of things, a little bit on customer behaviors. They are back to a more natural behavior as compared to last year at the same time, but it's a combination of many small things.

Speaker Change: As we said the promo penetration is.

Speaker Change: Going down slightly which is.

Speaker Change: Good for pressure on margin. So it's one element, but it's not the only element as we said earlier the mix of sales is improving because we're selling more fresh product in grocery products, we are any less shrink.

Speaker Change: <unk> is lower than it was at the same time last year and there is continuous.

Speaker Change: Currently in execution.

Speaker Change: Merchandising and in store. So it's a lot of thing a little bit on customer behaviors. They are back to a more natural behavior as compared to last year at the same time, but it's a combination of many small things.

Mark Petrie: Okay, understood. That's helpful.

Speaker Change: Okay understood. That's helpful. Thank you.

Mark Petrie: Thank you.

Mark Petrie: And I wanted to also ask about sort of price gaps between full service and discount channels overall. Do you think these have shifted over the last year at all? And I know you don't talk about regions, but I'm interested to hear any sort of specific comments about the Quebec market, just given that's not a market where you have a discount presence. And so just wondering if, if you've seen the market evolve with regards to price gaps. The gap is declining, and it's an area of focus for us. There's two elements we have to consider when we look at it.

Speaker Change: I wanted to also ask about sort of price gap between full service and discount channels overall.

Speaker Change: I think these have shifted over the last year at all and I know you don't talk about regions, but I'm interested to hear any sort of specific comments about the Quebec market.

Speaker Change: Just given the auto market, where you have a discount presence in so just wondering if you've seen the market involved with regards to price gaps.

Speaker Change: The gap is declining.

Speaker Change: And that's an area of focus for us there's two of them and we have to consider when we look at it.

Pierre St. Laurent: There's the effective price index and the regular price index. So we're very competitive on effective price index. We're very pleased with. Our performance with promotional and if you look at what we're doing right now in different markets we are providing guarantee of lower prices with the verified price. So, this is very good. So, we're very, very competitive in full service stores versus discount with our verified price promise to customer. So, we're looking at regular prices, but we're also looking at everything together, including internal, which is called effective price index. And the gap with discount is declining, because we know that VEG was important for customers.

The effective price index and the regular price index, So we're very competitive and effective price index.

Very pleased with.

Speaker Change: Our performance with promotional and <unk>.

Speaker Change: If you look at what we're doing right now in different markets.

Speaker Change:

Speaker Change: We are providing guarantee of lower prices with the verified price. So this is very good so we're very very competitive.

Speaker Change: For service stores versus discount with our verified price problem.

Speaker Change: Promise two customer.

Speaker Change: So we're looking at regular prices, but we are also looking at everything together, including tunnel, which skull.

Price index.

Speaker Change: Did that gap with discount is declining because we know without that it was important for customers.

Speaker Change: Yeah.

Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Pierre St. Laurent: I'm sorry, I was just on mute there. Thanks for those comments. Maybe just to follow up quickly. Does that does that approach in Quebec affect the promotional penetration at all? Or is that sort of, is that sort of a separate piece of what would be impacting them? No, I think in full service, we have a consistent approach across the country. Okay, understood.

Speaker Change: Oh, sorry, I was just on mute Sir.

Speaker Change: For this.

Speaker Change: Comments, maybe just a follow up quickly.

Does that does that approach in Quebec effects, the promotional penetration at all or is that sort of is.

Speaker Change: That sort of a separate piece of of what would be impacting that.

Speaker Change: Oh I think it's a service we have a consistent approach across the country.

Speaker Change: Okay understood. Thanks, very much all the best.

Mark Petrie: Thanks very much.

Mark Petrie: All the best. Thank you.

Laura: Thanks, Laura.

John Zambaro: And your next question comes from the line of John Zambaro from Scotiabank. Please go ahead. Thank you. Good morning.

Speaker Change: Thank you and your next question comes from the line of Johnson <unk> from Scotiabank. Please go ahead.

Speaker Change: Thank you and good morning, I'll add my congratulations to you on that and all the best in your next chapter.

Michael Medline: I'll add my congratulations to you, Matt, and all the best in your next chapter. I wanted to come back to the Sameshare sales performance subsequent to the quarter. And I wonder in the context of whether you think the theme of buying Canadian is positively benefiting Canadian retailers and not just Canadian CPG brands. So, in other words, do you believe you've seen increased market share over the past couple of months? Or is the Sameshare sales performance more a product of a relatively resilient consumer or the internal efforts you're putting? That's a good question.

Speaker Change: I wanted to come back to the same store sales performance subsequent to the quarter end and I wonder in the context of a weather.

Speaker Change: Where do you think the theme of buying Canadian is positively benefiting Canadian retailers and not just Canadian CPG brands.

Speaker Change: Other words do you believe you have seen an increase in market share over the past couple of months or is the same store sales performance more a product of a relatively resilient consumer or the internal efforts you're putting forward.

It's a good question and so early I don't want to I don't want to say anything is a trend or or or go overboard on anything but I think a lot of it is I don't want to take away from the execution that youre seeing and you've seen that quarter after quarter now at Empire. So I'm not taking away from that but I do think that there could be.

Michael Medline: It's so early that I don't want to, I don't want to say anything's a trend or, or, or go overboard on anything. I think a lot of it is, I don't want to take away from the execution that you're seeing. You've seen that quarter after quarter now at Empire. So I'm not taking away from that.

Michael Medline: But I do think that there could be some tailwind for Canadian retailers, as opposed to those those retailers that are seen as not Canadian, but early early days, and then we'll see and I wouldn't want to overstate it at this point. Unknown Speaker Okay, understood.

Speaker Change: B.

Yes.

Speaker Change: Some tailwind for Canadian retailers.

Speaker Change: As opposed to.

Those are those retailers that are seniors not Canadian dollars.

But early early days and then we will see and I Wouldnt want overstated at this point.

Speaker Change: Okay understood.

Michael Medline: On food inflation, I wonder what Thank you. Food inflation, I wonder what kind of increases you're seeing from your largest vendors? And is it fair to expect an uptick in inflation solely from from that factor, or its wage contracts that were agreed to in the past couple years? Is it fair to expect an increase in inflation just from those rather than the impact of the US dollar or Unknown Speaker I'm It's a bit tough to predict but the thing we have, if we remove the highly volatile situation with tariffs Our estimate is an inflation around 2%.

Speaker Change: On food insulate question I Wonder what.

Speaker Change: Thank you food inflation I wonder what kind of increases you're seeing from your largest vendors and is it fair to expect an uptick in inflation slowly from from that factor or it's wage contracts that were agreed to in the past couple of years is it fair to expect an increase inflation just from those rather than the impact of the U S.

Speaker Change: All are or tariffs.

It's a bit tough to predict but the thing we have.

Speaker Change: If we remove the highly volatile.

Speaker Change: Situation with tariff.

Speaker Change: Our estimate is an inflation of around 2% and when we look at.

Michael Medline: And when we look at This is the conversation we have with suppliers right now. When we avoid the conversation on tariff and we're looking at, you know, regular cost increases or whatever, we are in that range right now. And the quantity of cost increases are in a more normal, again, removing tariff conversation. We're in a more normal base right now. So this is why we feel comfortable to say we're in the range of 2% inflation next year without tariff. Okay, got it. That's helpful.

Speaker Change: This conversation we have with suppliers right now when we avoid the conversation on tariffs and we're looking at rig.

Speaker Change: Regular cost increases or wherever.

Speaker Change: We are in that range right now.

Speaker Change: The quantity of cost increases are in the more normal again, removing tariff conversation.

And the more normal base right now. So this is why we feel comfortable to say we are in the range of 2% inflation next year without that risks.

Speaker Change: Okay got it that's helpful. And then lastly for me on the cost side.

Matt Reindel: And then lastly, for me on the cost side, can you remind us of the cost initiatives that you have underway and whether they might contribute meaningfully over the next one to two years? In the past, you've referenced a few related to the supply chain or better execution. I wonder if you can add some more color. I mean, the three big initiatives we had on the cost reduction initiatives were supply chain, goods not for resale, and the organizational restructuring. We did, so the restructuring is done, and the benefits of that were taken in F-25. On goods not for resale, we have taken some of the benefits in F-25, but there'll be more to come in F-26.

Speaker Change: Can you remind us of the cost initiatives that you have underway and whether they might contribute meaningfully over the next one to two years in the past you've referenced a few related to the supply chain or better execution I Wonder if you can add some more color there.

Speaker Change: Sure.

Speaker Change: Three big initiatives, we had on the cost reduction initiatives.

Speaker Change: Our supply chain.

Speaker Change: Retail on the organizational restructuring.

Speaker Change: We did.

Speaker Change: So there was the restructuring is done.

Speaker Change: The benefits of that.

Speaker Change: <unk> taken in F 'twenty five.

Speaker Change: On goods not for resale.

Speaker Change: We have taken some of the benefits and that's 25, but there'll be more to come in F. 'twenty six.

Speaker Change: And I would also say that the fantastic work that's been done by that strategic sourcing team will continue again thats. One of these gifts that keeps on giving we built muscle that to make sure that we continually challenge all of our costs and negotiate all costs to make sure we're bringing those costs down so that should be.

Matt Reindel: And I would also say that the fantastic work that's been done by the strategic sourcing team will continue. Again, it's one of these gifts that keeps on giving. We've built muscle there to make sure that we continually challenge all of our costs and negotiate our costs to make sure we're bringing those costs down. So that should be something that continues to give benefits.

Speaker Change: It's something that continues to give benefits.

Matt Reindel: Perhaps the biggest one is supply chain. We've said this before, that this is a mixture of short, medium, and long-term opportunities. Some of the short-term you can do quickly. You renegotiate your line rates, your costs. You negotiate costs out of your existing contracts, so some of that can be short-term. The more medium-term, when we start talking about things such as freight and service or how we can optimize our network is all medium-term. And then longer-term, you can really look at how you'll set up across the whole country in terms of logistics and the number of DCs and the investments in automation and things like that.

Speaker Change: Perhaps the biggest one a supply chain. We've said this before that this is a mixture of short medium and long term.

Speaker Change: <unk> some of the short term you can do it quickly we renegotiate your you align rates Youre costs are you take you can negotiate costs out of your existing contracts. So some of that can be short term more medium term when we saw talking about things such as freight and the service or how we can optimize.

Speaker Change: Network is our medium term and then longer term you can really look at that.

Speaker Change: How you're set up across the whole country in terms of logistics and the number of Dcs in the investments in automation and things like that so.

Matt Reindel: So yes, supply chain is a big opportunity for us, and we should continue to talk about that every quarter because there's a whole series of initiatives that will deliver value in short, medium, and long-term.

Speaker Change: Supply chain is a big opportunity for us.

Speaker Change: Should continue to talk about that every.

Speaker Change: Every quarter, because there's a whole series of initiatives that will deliver value short medium and long term.

Speaker Change: I'll leave it there thank you very much.

Mark Petrie: I'll leave it there. Thank you very much. Thanks, Joe. Thank you.

Thanks, Joe.

Speaker Change: Thank you and we have a follow up question from Michael <unk> from CIBC. Please go ahead.

Mark Petrie: And we have a follow up question from Mark Petrie from CIBC. Please go ahead. Yeah, I just wanted to ask about the ecommerce growth. What's your sense of the overall market growth in online grocery? And do you get the sense that it's accelerating or stable or decelerating? It was pretty stable there for a while. In the last quarter or two, we've seen acceleration in the commerce penetration in the market. I think in its good acceleration, I wouldn't, I'm not.

Speaker Change: Okay.

Speaker Change: Yes, I just wanted to ask about the e-commerce growth, what's your sense of the overall market growth in online grocery and do you get the sense that it's accelerating our stable or decelerating.

Speaker Change: Okay.

Speaker Change: It was pretty stable there for a while in the last quarter or two we've seen.

Speaker Change: Acceleration in e-commerce penetration in the market.

Speaker Change: I think.

Speaker Change: Good acceleration I wouldn't I'm not.

Mark Petrie: Not doing a jig yet, but it's certainly improving, and we expect it to continue to improve, and that's obviously Thank you, everybody. Part of the reason we're seeing better results out of our three CSCs. Yeah, understood. Okay, thanks for that.

Speaker Change: But doing a jig yet.

Speaker Change: But it's certainly improving and we expect to continue to improve and that's obviously.

Part of the reason, we're seeing better results out of our three cfcs.

Speaker Change: Yeah understood Okay. Thanks for that.

Katie Brine: Great questions today. Thanks, Mark. Thanks to everyone today. Thank you and there are no further questions at this time.

Bob: Great questions today, Thanks, Bob Thanks to everyone today.

Speaker Change: Thank you and there are no further questions at this time I would now hand, the call back to Ms. Kathy Brian for any closing remarks.

Katie Brine: I would now hand the call back to Ms. Katie Brine for any closing remarks. Great. Thank you, Ina. We appreciate your continued interest in Empire. If there are any other unanswered questions, please contact me by phone or email.

Kathy Brian: Great. Thank you and we appreciate your continued interest in Empire. If there are any other unanswered questions. Please contact me by phone or email, we look forward to having you join us for our fourth quarter fiscal 2025 conference call.

Katie Brine: We look forward to having you join us for our fourth Fiscal 2025 conference call on June 19th. Talk soon. Thank you.

Speaker Change: <unk>.

Speaker Change: Thank you and this concludes today's call. Thank you for participating you may all disconnect.

Operator: And this concludes today's call. Thank you for participating. You may all disconnect.

Speaker Change: Yes.