Q2 2025 Metro Inc Earnings Call - Q&A
Good morning, ladies and gentlemen, and welcome to the Metro Inc 2025 Second Quarter Results, Richard Tedges, Lucienne Primesh, David Sankt, Conference Call. At this time, all lines are in listen only mode.
Speaker Change: Following the presentation, we will conduct a question and answer session. If at any time during this call you required me to assistance, please press star zero for the operator. This call has been recorded on Wednesday, April 16, 2025. I would now like to turn the conference over to Mr. Shahran, Kadoche, please go ahead.
Speaker Change: Well, good morning, everyone. Thank you for joining us today. Our comments will focus on the financial results of our second quarter, which ended on March 15th.
Speaker Change: With me today is Mr. Eric Fleche, President and CEO , Francois Thibault, Executive VP and CFO , Marc Giroux, Chief Operating Officer, Jean-Michel Coutue, President of the Pharmacy Division, and Nicola Amio, incoming CFO .
Speaker Change: During the call, we'll present our second quarter results and comment on its highlights. We will then be happy to take your questions.
Speaker Change: Before we begin, I would like to remind you that we will use in today's discussion different statements that could become sure that spoke of looking information.
Speaker Change: In general, any statement which does not constitute a historical fact may be deemed a forward-looking statement. Words or expressions such as expect, intend, are confident that, will, and other similar words or expressions are generally indicative of forward-looking statements.
Speaker Change: The four-looking statements are based upon certain assumptions regarding the Canadian food and pharmaceutical industries, the general economy, or on your budget and our 2025 action plan.
Speaker Change: These four-looking statements do not provide any guarantees as to the future performance of the company and are subject to potential risks known and unknown as well as uncertainties that could cause the outcome to differ materially.
Speaker Change: Risk factors that could cause actual results or events to differ materially from our expectations as expressed in or implied by our forward-looking statements are described under the Risk Management section in our 2024 annual report.
Speaker Change: We believe these forward-looking statements to be reasonable and pertinent at this time and represent our expectations. The company does not intend to update any forward-looking statements, except as required by applicable.
I will not turn the governor to Francois.
Thank you, Estelle, and good morning, everyone!
Francois: So total sales reached 4.9 billion in the second quarter, and increase of 5.5% versus the same period last year.
Francois: Food Stames or Cell, or a 5.2% which sells positively impacted by the transfer of two significant pre-Christmas shopping days from the first quarter to the second quarter this year.
Francois: When we adjust for this calendar shift, same-source sales were up 3.9 percent. [inaudible]
Francois: In pharmacy, we recorded solid same-source sales of 7% on top of 5.9% in the previous year.
Francois: Our gross margins so that 20% of sales versus 19.9% in the same quarter last year.
Francois: Operating expenses were 521.3 million, representing 10.6% of sales versus 10.7% of sales in the same quarter last year.
Francois: We benefited from the fact that we cycle transition and duplication costs last year related to our Tevvan Automated Distribution Center, but these benefits were probably said by increases in other areas, notably energy costs in Ontario, due to cold weather and an increase in fees related to our online partnership fees.
Francois: Abidda for the quarter total, 461 million, up 5% year-over-year, and up 6.8% when we remove the gain and losses on disposal of assets.
Francois: Total depreciation, arbitration expense for the quarter was $103.6.1 million, up $6.6 million or $5.1%
Francois: The Increasing Depreciation and Emeritization Expans is mainly due to the commissioning of investments in our supply chain, including some automation technology in Pharma, and the final phase of our first distribution center in Toronto by summer, as well as the timing of retail investments.
Francois: Net Financial Costs for the second quarter were 33.4 million compared to 34.1. Last year, that decreases in financial costs as many due to overall lower interest expense on our debt, partly have said by lower capitalizing interest.
Francois: Our effective tax rate of 24.5% is lower than the effective tax rate of 26.5 in the second goal last year, as a result of the Taliban tax holiday of 6 million.
Francois: Justin NetEarnings were 226.6 million compared to 206.4 million last year, a 9.8% increase, and a Justin NetEarnings per share amounted to $1.02 versus 91 cents last year, and that's up 12.1%
Francois: On the food retail side, after 24 weeks, we converted two stores and carried out major expansions and renovation at eight stores for net increase of 18,100 square feet, or 0.1 percent of our food retail network.
Francois: Following the end of the quarter, we open a new food basics, Ontario, and convert it in other metro stores as you're proceeding to back.
Francois: Under a normal course issue-revid program, as of April 4th, we have referred to as 2.849 million shares for a total consideration of a 264 million, representing an average share price of $92.65.
I'll now turn it over to Eric.
Eric: Thank you, Francois, and good morning, everyone. We delivered solid results in the second quarter driven by strong sales growth in both food and pharmacy. As our teams continue to focus on bringing value to our customers across our different banners.
Eric: Food Same-Store Sales were up 5.3% or 3.9% when adjusting for the two-day Christmas shift to the second quarter. Discount continues to grow same-store sales faster than Metro with the gap between both a remaining stable.
Our Internal Food Basket Inflation, Increased Verses. [inaudible]
Eric: First of the preceding quarter, but was slightly lower than the reported food CPI after adjusting for the sales tax holiday.
Eric: We are seeing inflationary pressures on certain commodity prices as well as a weaker Canadian dollar. The recently introduced tariffs and counter tariffs did not impact food inflation in the second quarter.
Eric: For the quarter, transaction count was essentially flat with the average basket up. Promotional penetration is up year over year, but stable compared to our first quarters.
Eric: Online sales grew by 26% for the quarter. This growth is driven by the ramp-up of our click-and-collect services in our discount banners, and by third-party marketplace.
Eric: We are satisfied with our flexible model meeting customer demand and needs.
Eric: In this uncertain and economic environment, customers are favoring local and Canadian products.
Eric: As a Canadian-owned and operated company, we have always sourced the products we sell from Canadian growers and manufacturers as much as possible.
Eric: In the current context, we are putting even more emphasis on local and Canadian products and optimizing their visibility in all of our banners, whether in-store, online or through our various promotional tools like the Weekly Flyer.
Eric: Customers are responding well and sales of Canadian products are outpacing total sales and the gap is accelerated over the past few weeks.
Eric: On the pharmacy side, we delivered another solid quarter with comp sales of seven percent for a two-year stack of 13.3 percent.
Eric: Prescription sales were up 7.8% driven by continued organic growth, specialty medications and professional services.
Eric: We continue to record significant growth in pharmacy services and in the first 24 weeks of this fiscal year we documented more than 2.4 million clinical acts and services performed through our network.
Eric: We are well-positioned to capitalize on this growing trend with our dedicated community pharmacists and our leading footprint across Quebec.
Eric: Commercial sales were up 5.3% or 3.7% when adjusting for the Christmas shift.
Eric: The strong performance was driven by growth in OTC, Habba, and cosmetics.
Eric: As we begin our third quarter, we face an uncertain economic environment, and it is difficult to predict how the situation will evolve and how it will impact consumers and our business.
Eric: As I said to date, the recently introduced tariffs and counter tariffs has not had an impact on our business, however the situation remains highly volatile.
Eric: We remain steadfast in our focus to deliver value to our customers, to robust merchandising programs, strong private label, and loyalty offers, and working with our vendor partners to find alternative sources of supply whenever appropriate.
Eric: To conclude, we remain confident that our sustained investments in our retail networks and supply chain combined with strong execution will continue to fuel our growth and we maintain our medium to long term average annual EPS growth target of 8 to 10%.
Speaker Change: Finally, as most of you know, Francois Thibault is retiring at the end of the week and this is his last analyst call.
Eric: I want to take a moment to highlight a significant contribution to our success since 2012. I want to personally thank him for his leadership of our finance, legal, and IT teams, as well as for his partnership and friendship.
Thank you very much.
Speaker Change: He will be replaced by Nikola Amio, who joined us about one month ago, and I'm sure that Lex Haaswa is an arrow-space background prepared him really well to be RCF-F-L.
Speaker Change: So, first of all, I want to say a few words. Thank you, Eric. This is my 50 seconds and last earnings call. It was an honor to be Mitchell CFOG for the last 12 and half years. I will definitely miss engaging with all of you and the investor community. Thank you very much. And we'll now take your questions.
Speaker Change: Thank you, ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please, the star followed by the one on your touch-tone phone. You will hear prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the two. If you are using a speaker phone, please lift the hand, said before pressing any keys.
One moment, please feel your first question.
Speaker Change: Your first question comes from Tamy Chen, with BMO Capital Markets. Your line is now up.
Tamy Chen: Oh, hi, good morning. Thanks for the question. Just wanted to start with your outlook statement. The comment on the current environment, I understand even all the tariffs aspects, but just giving your business in groceries, please stay full for consumers. I'm just wondering, what are you specifically flagging? Are you seeing in recent weeks?
as the Tariff Off.com ramped up. [inaudible]
that consumer behavior in your banners. [inaudible]
Tamy Chen: Have changed recently, are they shifting back a lot more to discount, just if you can talk a bit about that and how should we think about the rest of this fiscal year already in the first half, you've achieved that 8 to 10% target. Thanks.
So, customer behavior has not changed uh...
Tamy Chen: The focus on value that's been out there for several quarters remains, we saw that in Q2, just like we did in Q1, so I mentioned...
Tamy Chen: The High Promotion Penetration, High Private Label, some trading down there. There's no change in customer behavior. I think our outlook statement referred more to the general macroeconomic environment with all this uncertainty and turbulence.
Tamy Chen: That we're all experiencing and how can that affect consumer sentiment, consumer confidence over the rest of the year.
Tamy Chen: We, as you say, we are a staples, essential goods retailer and distributor. We're well-positioned in any type of environment. We're confident that we'll continue to grow.
Tamy Chen: But there's volatility and uncertainty and land effects customers and ultimately can affect businesses so that's all we wanted to point out.
Thank you for watching. Bye. Bye.
Thank you.
Speaker Change: I see, okay. And my follow-up is, you know, good growth in the pharmacy business that continues. I think it's outpacing food. I guess I just would have thought maybe see a bit more positive impact from this.
Tamy Chen: on your gross margin from that. Are you able to talk a bit more about the puts and takes to your gross margin this quarter? Was food margin down the over here? Thank you.
Tamy Chen: Yeah, we don't disclose margin between the divisions. I think we try to have an effective merchandising and have the right pricing for our customers, so we did improve gross margin overall by 10 bits rounded, and that was helped by some top-line growth, obviously.
[inaudible]
Sorry, we're gonna have to apply gloves? [inaudible]
Speaker Change: So, Francois said we don't disclose gross margin between food and pharmacy. Yes, there was a good growth in farmer, consistent growth in farmer. So, I don't think I can just say that it did not have a material impact on mental total gross margin. The mix has been pretty consistent.
Okay. Thank you.
Speaker Change: Your next question comes from Michael Van Aelst with Chidi Cowan. Your line is now open.
Good morning. I can grasp on the good results. I wanted to...
Speaker Change: continue on the outlook, Stamman, just because you've the last, I think, four or five quarters you've had.
Speaker Change: The 8-10% long-term target in your outlook statement.
Speaker Change: But it was noticeably absent this quarter. Is there anything that you're trying to signal there? Or is this just because you've kind of gotten past your fiscal 24 period when you are below that range and you no longer feel the need to reassure investors of that long term target.
Speaker Change: Yeah, Michael, exactly what you just said, the latter. This is an outlook that was written coming out of our transition year when we said that after that transition year we expected to gradually resume our profit.
Speaker Change: We look at where we are after six quarters, we felt that there was no longer relevant as a comment, but we certainly are maintaining our growth targets of 8 to 10% on a medium-long-term outlook.
Speaker Change: Okay, so there's nothing in your immediate future that led you to be concerned about your near-term outlook once again. Absolutely not.
Speaker Change: It did accelerate in the quarter, particularly the same store tonnage looked quite strong.
Speaker Change: And I'm hoping that you could help us understand where this is coming from, because I'm assuming that people aren't necessarily eating a lot more time in show. You're gaining share and where is that coming from? And why do you think you're gaining share?
Speaker Change: Well, we're getting share slightly. We're pleased with our market share performance overall in the markets where we can beat. We won't give you by market, by banner, whatever, but overall we're pleased with our tonnage.
and our market share.
Speaker Change: You know, there's not much else, I'm not sure you want to comment more on that. But the result of a few factors, I would say, one good and effective commercial strategy in market in both discount and conventional, both format are performing well.
Speaker Change: in each market. Secondly, there's a bit of Christmas shift in that as well in terms of the tonnage. There are two days of large basket sales from Q1 to Q2, so that had a little bit of an impact.
Speaker Change: But overall, effective commercial strategy in both markets, so we're satisfied with those results.
Speaker Change: Okay, and to what degree is the greater capacity, the increased freshness in your supply, like, you know, greater capacity in your DCs, your increased freshness, I guess, your increased in stock positions. How much is it you think that might be helping?
Speaker Change: It's difficult to evaluate Michael, but for sure our new fresh capacity in both provinces are helping our in stock position and service the stores, but I couldn't evaluate exactly how much.
Okay, great. Thank you very much.
Mark Carden: Your next question comes from Mark Carden with UBS. Your line is now open.
Mark Carden: Good morning. Thanks so much for taking the questions and that's about Francois. To start, you talked about customers gravitating towards Canadian made products. Do you believe that you're seeing much of a lift from shoppers also moving any of their shopping away from American retailers as well? Or is it mainly just a shift in what they buy?
Mark Carden: What we're seeing is a shift in what they buy. They're looking, we put a lot of signage through our stores on the shelves, on displays to help customers make decisions on what products they want to buy.
Mark Carden: So yes, Canadian Quebec's local products, Ontario local products, Canadian partners in general are selling well and better than the rest of the store.
Mark Carden: Sustained over the long term in flight games and that's okay but can we pinpoint to an increase in traffic because of US stores? I don't think we can say that.
Speaker Change: Got it, that's helpful. And then as a follow-up, are you guys seeing competitors' largely marking products as being tariff to date? Are many passing these through? And then are you seeing any more flexibility from suppliers in trying to absorb any of the costs?
Speaker Change: I'm not sure I got the first part of your question, but the counter-terrorists were the Canadian government
Speaker Change: Tarrison, U.S. product coming in here. It's on the limited number of food products and have a product.
Speaker Change: So the effect is limited so far and yes some US vendors have been working with us to mitigate that and help us to maintain their volume.
Speaker Change: So it's been a little over a month of these counter-terrorists. It has not had really an impact on retail inflation so far, and vendors have been working with us. That said, we're working with alternative suppliers.
Speaker Change: when we can to satisfy the needs of customers who want to buy a non-US.
Great. Thanks so much. Good luck, guys.
Thank you.
Speaker Change: Your next question comes from Mark Petrie with CIBC. Your line is now open.
Mark Petrie: Yeah, thanks good morning, and congratulations Francois, I certainly wish you all the best in future endeavors. It's been a pleasure dealing with you and working with you.
Thank you, Mark. Um.
Mark Petrie: and uncertainty. If you've seen that manifest in the Jean-Captop business at all.
Speaker Change: And thinking maybe a front store and some of the higher price point products, I know you don't go into prestige beauty but curious how the beauty category specifically has performed.
Speaker Change: Yeah, thank you. Our beauty category continues to perform very well. It continues to be one of the driver of growth in our...
Speaker Change: in our pharmacy division. Right now, very similar to food, very limited number of skews have been affected by the tariffs.
Speaker Change: So we're not seeing much change due to the tariffs, but customers continue to look for value, promotional mix continues to be strong. So it's very reflective of what we're also seeing in the food sector.
Speaker Change: The relative performance of full service versus discount, I know discount continues to grow faster than full service. I think you said the gap.
Speaker Change: has remained steady. Curious if that holds sort of in Q3 to date, or if you've seen that waiver at all, as some of the tariff commentary has ramped up.
Speaker Change: It's still pretty consistent. I said that the same store sales within our shop, between conventional discount that's remaining stable.
Speaker Change: There's more growth in discount. That continues. We'll see how the continue, like I said, it's volatile, it's fluid, we'll see how customer sentiment and behavior evolves week by week, but so far in the third quarter, it's been pretty consistent.
Speaker Change: Okay, and then I guess just the last one sort of related to that. Any change in how you've seen consumers engage with the loyalty program or any shifts on your part with regards to how you want to present that to consumers in this kind of environment. Thank you very much.
Speaker Change: Well, loyalty is a way to deliver value to consumer and to allow them to save.
Speaker Change: So it's one of the levers of our commercial strategy. As you all know, we launched in Ontario in Q1. The program, the...
Speaker Change: Loyalty in both provinces is a lever of value and is part of our commercial strategy and will continue to be and is important in the current context where consumers are looking for value.
Yeah, understood. Okay, thanks, all the best guys.
Thank you.
[inaudible]
Speaker Change: Your next question comes from Irene Nattel with RBC. Your line is now open.
Irene Natal: Thanks, and good morning, everyone. I want to add my congratulations to Klaus Wah, been there for each of those 52 calls and enjoyed every single one. So, thanks. That's very good.
Thank you, Harry.
Speaker Change: Yeah, so I'm just focusing for a second on the PJC side. First of all, on front of the store, you talk about Hava, you talk about OTC beauty. Can you talk to sort of like rank, rank order those? Because it was a really, really nice printing, wondering about the Q3 momentum today.
So, so rank order in terms of in terms of
Speaker Change: Velocity, so yeah, OTC continues to be the main driver of growth in our business, especially
Speaker Change: Good Caught in Cold Season, it was delayed but once it started it was a good one and that really helped drive sales. And then after that it's our beauty categories that continue to show really strong growth that the customers are responding well to our commercial programs.
Speaker Change: And then, after that, it's what's unique about Jean-Coucou, our sundry and general merchandise overall continues to perform well. So, that's how I would articulate it in rank order.
Speaker Change: That's great, thank you. And on the RF side, are you seeing the stabilization of the specialty or the growth and specialty? Has it started to kind of plateau where we still seeing that very sharp growth trajectory?
Speaker Change: We're seeing sustained growth trajectories, so as you can tell our numbers are consistently growing.
Speaker Change: and when we kind of peel away some of the layers, it's really the same drivers, proportionally the same too. So specialty pharmacy services and then some organic growth too, we're seeing our number of patients continue to increase period after period.
Speaker Change: That's very helpful. I'm just one final little question. In somebody in the opening remarks mentioned something about pharmacy automation or automation at TJC, just wondering what that is and where you kind of are with the state of play in terms of in terms of the GC's perhaps any automation or centralized fill. Thank you. Yeah, you have so that automation was it's continued investment.
Speaker Change: Artimation Program as you know, Veren is a very sophisticated, semi-automated warehouse and we're continuing to make investments to get the best out of our automation system, so we made some investments.
Speaker Change: in our order storage and retrieval system over the past year and we've commissioned those a lot of that technology in Q2.
That's great. Thank you.
Speaker Change: Your next question comes from John Zamparo with Skillshare Bank. Your line is now open.
John Zamporo: Thank you. Good morning, and congrats again to you, Francois and best wishes to you. Thank you.
John Zamporo: I wanted to ask about Sam Strasil's through the quarter and acknowledging the holiday period shift. Did you see any meaningful change months to months?
Speaker Change: This was a meaningful shift and we gave you on both food and pharma number, the reported number, 5.3 on food 3.9.
Speaker Change: Okay, understood. And I know you don't want to get too far into the future on inflation expectations, but is it fair to say all else equal and normalizing for the tax holiday you'd expect a near term acceleration?
Speaker Change: whether it's meaningful or modest, we'd expect a near-term acceleration and food inflation given a higher US dollar and the counter-tariff.
Speaker Change: Well, that's what we experienced from Q1 to Q2 in inflation and our basket did increase.
Speaker Change: We said if we adjust for that tax holiday or inflation number in Q2 is a bit below CPI but it's higher than Q1 and so that was caused by the FX exchange rate, that was caused also by commodity prices.
Speaker Change: Some of them are quite high, nothing to do with terrorists.
Speaker Change: So that's happened and continues to happen. So we hope it will continue to stay around the current levels.
and then we'll see going forward.
Speaker Change: Counter-terrorists are not good for inflation on the food side. We have to manage through it. We're managing as best we can.
Speaker Change: to find sources of supply, to protect our costs, to protect our retails, to minimize inflation, but it puts some inflationary pressures.
Speaker Change: So, managing that really closely to deliver value to customers because it's key to satisfying customers today for sure.
I hope that answers it.
It does. Thank you very much.
Speaker Change: Ladies and gentlemen, as a reminder, should you have a question, please press star one. Your next question comes from Chris Lee with Desjardins. Your line is now open.
Chris Leawood-Desjardins: Good morning and thanks everyone and let me also please add my congratulations to you from Swap, best wishes, congrats on a fabulous career.
Chris Leawood-Desjardins: Thank you Giroux. I wanted to ask about first, maybe a favorite topic on S.G. and Expenses.
Chris Leawood-Desjardins: I'm wondering, you know, if you were to exclude the higher energy costs in Ontario, which I take to be more transferred because it was a winter, cold winter, what the SGNA rates have been, would have been notably improved more than what you reported.
Chris Leawood-Desjardins: This is more than a 20% year-over-year increase. So the big increases, if you hadn't removed them then, yes, we would have shown a better, as you may as a percentage of self and a better year-over-year increase, but that's what we have to deal with.
and that's how the numbers came out.
Chris Leawood-Desjardins: Okay, that's helpful, and I think you mentioned last quarter that the Q2 of last year was sort of the peak.
in terms of the difficulty of Q2. Q2 and Q3 were sort of the peak.
Chris Leawood-Desjardins: Overall, I'm pleased that we were able to end as you level that still is lower as a presenter than last year, but...
Chris Leawood-Desjardins: But you will have a similar situation in Q through as well that we're, what we're combing. We're, we're, we're, we're, we're, we're,
Speaker Change: Okay, thanks for that. And maybe just a couple of questions for John Shell. You have an update on Bill 67 of Oakland. You might, the government passes approval.
Speaker Change: Yep, so Bill 67 was, we were expecting it sometime this spring. There's been some delays as they work through the regulations and
Speaker Change: and finalizing the scope, so we're expecting the regulations to pass sometime in June .
Now that's said, the ATPP is still negotiating a pharmacist compensation.
Speaker Change: So right now, the way we look at it is we think sometime in probably Q1, a late Q4 or early Q1 that will start getting the benefits, the full benefits of Bill 67 as kind of our outlook on that portion of the business right now.
Speaker Change: Okay, that's great. And my last question is just on specially drugs, you know, just because ozampic is such a big thing.
Stale Seller in Canada.
Speaker Change: I just want to get your thoughts as it becomes generic next year.
Speaker Change: I think the gross profit dollars on genetic drugs are generally higher than branded and just wondering what type of impact do you think that would have on your uncle too, is it going to be notable or not really just maybe high level comments on that would be great, thank you.
Yeah, we um...
Speaker Change: First of all, the generalization of Zampic remains still to be seen. There's a...
Speaker Change: Obviously no one orders if we get to fight it. So it's tough to call when it's going to happen. We know it's going to happen eventually but when your guess is as good as mine, we're not going to disclose yet what the impact of it's going to be on our financials.
Speaker Change: But, yes, obviously there will be every time there's generalization, there's deflation in our top line sales, so we will calculate it based on when the timing comes.
Look back, but you'll be good for your profit life, alright?
Speaker Change: It should be a creative, even though it's deflation of the top line. Yeah, generics usually, usually it hurts the top line but it's good for margin.
Okay. Wait, yeah, thanks, and not the best of one.
Thank you, Chris.
[inaudible]
Speaker Change: Your next question comes from Michael Van Elf with TD Cowan. Your line is now open.
Speaker Change: roughly how much is being absorbed by vendors versus absorbed by Metro versus being passed through to higher prices.
Michael, it's Mark here.
Michael: It's case by case and it's a very fluid environment so it would be very difficult to break that down. Our teams, our sourcing team
Michael: Are looking for alternatives. So in some instances, we're sourcing elsewhere from the US. Some of the vendors have fields in other countries than the US. So they are shipping from those other countries instead of the US. So product by product, case by case.
Michael: It's a very fluid situation, but overall we've been able to the impact on price and as Eric said, the impact on inflation, we haven't seen any impact in Q1.
Thank you too. Thank you too, sorry.
Speaker Change: And is that, is Metro being pushed to absorb some of it as a result?
Speaker Change: Like I said, it's been only a few weeks and it changes every day as we know when we read the papers so you know people are trying to
Speaker Change: Wait and see before making big changes. So yes, we have received some cost increases related to counter-terrorism.
Speaker Change: We asked for six weeks notice from those suppliers, so in May, April , starting now, you know, some small cost increases or related to tariffs can start to be reflected.
Speaker Change: But we've been working with our vendors to justify it, to provide government codes. So whatever is a subject to counter-tariff, we try to measure as best we can to minimize the cost of this for us and the retail price.
for the customer.
Speaker Change: But we're working with them, and they want to protect some of them, want to protect their volumes, like Matt said, they source the product from the from different countries, some of those large berry vendors, you know, think if you think of Driscoll, they have fields in Mexico in the
Speaker Change: some of the berries that we're selling these days are coming a lot more from Mexico than the US. So it's one way to protect costs here.
Speaker Change: So, like I said, it's a fluid situation. It changes every day. We're monitoring closely and we're trying to minimize as much as we can the impact.
All right. Thank you.
Speaker Change: Your next question comes from Tamy Chen with DML Capital Markets. Your line is now open.
Tammy Chen: Hi, thanks for speaking me in here. Just a quick follow-up question on online glossary. Very good growth this quarter. I see you mentioned the drivers.
Tammy Chen: Can you just talk about, right now, is Rosary Palmer as a channel for you? I mean, is it earning saluted for you? I assume it is because of the fees and just generally, how do you think about this?
Tammy Chen: Sigmund, as for several quarters now, I believe you report a very good year will be our growth. Like, are you seeing this is starting to gain some more and more momentum? And do you think at some point in the near future, you may need to invest in some more infrastructure or supply chain of your own to continue to service this? Thank you. Thank you.
Tammy Chen: So, in entering your first question, the first part of your question, it is earning, the overall business is profitable, so the bottom line, but it is dilutive as a percentage of margin, of margin.
We were looking at e-commerce as a...
also as a loyalty play.
Tammy Chen: For us, it's important as we continue to serve and meet the needs of our customers and our-
Tammy Chen: and our flexible delivery platform through third parties, express delivery, click and collect, allows us to meet our customer demand.
Tammy Chen: Growth over the last quarter has been stable. It's continuing to grow and we want to meet the customer where they are and where their needs are and currently our current delivery platform through third party in our own platform is allowing us to continue to grow.
Tammy Chen: When time will come to reflect on investment we will but for now we have the capacity to continue to serve those customers.
Thank you. Thank you. Thank you.
Thank you.
[inaudible]
Tammy Chen: There are no further questions that at this time I will now turn the call over to Estelle for closing remarks.
Estelle: Thank you for your interest in Metro and please mark your calendars for a third quarter results on August 13th. Thank you.
Estelle: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating in NASA. Please disconnect your lines.