Q1 2026 Alimentation Couche-Tard Inc Earnings Call

September 3, 2025

Speaker #3: Good morning. My name is Joel, and I will be your conference operator today.

Joelle: Good morning. My name is Joelle and I will be your conference operator today. Bonjour, je m'appelle Joelle et je serai votre opératrice pour la conférence aujourd'hui. I will now introduce Mr. Mathieu Brunet, Vice President, Investor Relations and Treasury at Alimentation Couche-Tard Inc. Je vais maintenant passer la parole à Monsieur Mathieu Brunet, Vice-Président Relations, Investisseurs et Trésorerie pour Alimentation Couche-Tard Inc.

Speaker #4: Bonjour, je m'appelle Joel et je serai votre opératrice pour la conférence aujourd'hui. I will now introduce Mr. Mathieu Brunet, Vice President, Investor Relations and Treasury at Alimentation Couche-Tard.

Speaker #4: Je vais maintenant passer la parole à Monsieur Mathieu Brunet, Vice-Président, Relations Investisseurs et Trésorerie pour Alimentation Couche-Tard.

Speaker #5: Bonjour, j'aimerais d'abord vous souhaiter la bienvenue à la téléconférence qui porte sur la diffusion des résultats financiers du premier trimestre de l'exercice.

Mathieu Brunet: English will follow. Bonjour, j'aimerais d'abord vous souhaiter la bienvenue à la téléconférence qui porte sur la diffusion des résultats financiers du Q1 de l'exercice 2026 d'Alimentation Couche-Tard. Toutes les lignes seront placées en mode discrétion afin d'éviter tout bruit inutile. À la suite de la présentation, nous répondrons aux questions des analystes. Nous souhaitons vous rappeler que cette web diffusion sera disponible sur notre site internet pour une période de 90 jours. De plus, prenez note que certains des sujets discutés au cours de cette web diffusion pourraient consister en des déclarations prospectives qui sont fournies par la société avec les avertissements usuels. Ces avertissements ou risques, ainsi que ces incertitudes, sont décrits dans nos rapports financiers. Il est donc possible que nos résultats futurs puissent différer des informations présentées aujourd'hui.

Mathieu Brunet: English will follow. Bonjour, j'aimerais d'abord vous souhaiter la bienvenue à la téléconférence qui porte sur la diffusion des résultats financiers du premier trimestre de l'exercice 2026 d'Alimentation Couche-Tard Inc. Toutes les lignes seront placées en mode discussion afin d'éviter tout bruit inutile. À la suite de la présentation, nous répondrons aux questions des analystes. Nous souhaitons vous rappeler que cette webdiffusion sera disponible sur notre site Internet pour une période de 90 jours. De plus, prenez note que certains des sujets discutés au cours de cette webdiffusion pourraient consister en des déclarations prospectives qui sont fournies par la société avec les avertissements habituels. Ces avertissements aux risques ainsi que ces incertitudes sont décrits dans nos rapports financiers. Il est donc possible que nos résultats futurs puissent différer des informations présentées aujourd'hui.

Speaker #5: 2026 d'Alimentation Couche-Tard. Toutes les lignes seront placées en mode discussion afin d'éviter tout bruit inutile. À la suite de la présentation, nous répondrons aux questions des analystes.

Speaker #5: Nous souhaitons vous rappeler que cette webdiffusion sera disponible sur notre site internet pour une période de 90 jours. De plus, prenez note que certains des sujets discutés au cours de cette webdiffusion pourraient consister en des déclarations prospectives qui sont fournies par la société avec des avertissements habituels.

Speaker #5: Ces avertissements ou risques, ainsi que ces incertitudes, sont décrits dans nos rapports financiers. Il est donc possible que nos résultats futurs puissent différer des informations présentées aujourd'hui.

Speaker #5: Les résultats financiers seront présentés par Monsieur Alex Miller, Président et Chef de la Direction, et Monsieur Philippe da Silva, Chef de la Direction Financière.

Mathieu Brunet: Les résultats financiers seront présentés par Monsieur Alex Miller, Président et Chef de la Direction, et Monsieur Philippe Da Silva, Chef de la Direction financière. Good morning. I would like to welcome everyone to this web conference presenting Alimentation Couche-Tard Inc.'s financial results for the first quarter of fiscal year 2026. All lines will be kept on mute to prevent any background noise. After the presentation, we will answer questions from analysts during this web conference. We would like to remind everyone that this webcast presentation will be available on our website for a 90-day period. Also, please remember that some of the issues discussed during this webcast might be forward-looking statements, which are provided by the corporation with its usual caveats. These caveats or risks and uncertainties are outlined in our financial reporting. Therefore, our future results could differ from the information discussed today.

Mathieu Brunet: Les résultats financiers seront présentés par Monsieur Alex Miller, président et chef de la direction, et Monsieur Filipe Da Silva, chef de la direction financière. Good morning. I would like to welcome everyone to this web conference presenting Alimentation Couche-Tard's financial results for Q1 of fiscal year 2026. All lines will be kept on mute to prevent any background noise. After the presentation, we will answer questions from analysts during this web conference. We would like to remind everyone that this webcast presentation will be available on our website for a 90-day period. Also, please remember that some of the issues discussed during this webcast might be forward-looking statements, which are provided by the corporation with its usual caveats. These caveats or risks and uncertainties are outlined in our financial reporting. Therefore, our future results could differ from the information discussed today.

Speaker #6: Good Good morning. I would like to welcome everyone to this web conference presenting ALIMENTATION QUCHE TARD's financial results for the first quarter of fiscal year 2026.

Speaker #6: All lines will be kept on mute to prevent any background noise. After the presentation, we will answer questions from analysts during this web conference.

Speaker #6: We would like to remind everyone that this webcast presentation will be available on our website for a 90-day period. Also, please remember that some of the issues discussed during this webcast might be forward-looking statements, which are provided by the Corporation with its usual caveats.

Speaker #6: These caveats or risks and uncertainties are outlined in our financial reporting. Therefore, our future results could differ from the information discussed today. Our financial results will be presented by Mr. Alex Miller, President and Chief Executive Officer, and Mr. Philippe da Silva, Chief Financial Officer.

Mathieu Brunet: Our financial results will be presented by Mr. Alex Miller, President and Chief Executive Officer, and Mr. Philippe Da Silva, Chief Financial Officer. Alex, you may begin your conference.

Mathieu Brunet: Our financial results will be presented by Mr. Alex Miller, President and Chief Executive Officer, and Mr. Filipe Da Silva, Chief Financial Officer. Alex, you may begin your conference.

Speaker #6: Alex, you may begin your conference.

Speaker #7: Thank you, Mathieu. Good morning, everyone, and thank you for joining us. We are pleased by our improved performance in the first quarter of the new fiscal year.

Alex Miller: Thank you, Mathieu. Good morning, everyone, and thank you for joining us. We are pleased by our improved performance in Q1 of the new fiscal year. Across our network, we are reporting positive same-store sales, which includes our US market for the first time in several quarters. This progress is driven by our focus on providing compelling value and ease, especially in our food and beverage offers, to win our customers who continue to watch their spending. In our fuel business, we had overall good results, especially in Canada and our larger European markets. While in North America, fuel margins remained aligned with previous quarters. Later in this presentation, I will go into more detail on our convenience and mobility results and value-building initiatives.

Alex Miller: Thank you, Mathieu. Good morning, everyone, and thank you for joining us. We are pleased by our improved performance in the first quarter of the new fiscal year. Across our network, we are reporting positive same-store sales, which includes our U.S. market for the first time in several quarters. This progress is driven by our focus on providing compelling value and ease, especially in our food and beverage offers, to win our customers who continue to watch their spending. In our fuel business, we had overall good results, especially in Canada and our larger European markets. While in North America, fuel margins remained aligned with previous quarters. Later in this presentation, I will go into more detail on our convenience and mobility results and value-building initiatives.

Speaker #7: Across our network, we are reporting positive same-store sales which includes our US market for the first time in several quarters. This progress is driven by our focus on providing compelling value and ease.

Speaker #7: Especially in our food and beverage offers, to win our customers who continue to watch their spending. In our fuel business, we had overall good results, especially in Canada and our larger European markets.

Speaker #7: While in North America, fuel margins remained aligned with previous quarters, later in this presentation, I will go into more detail on our convenience and mobility results and value-building initiatives.

Speaker #7: However, before I do so, I first want to cover the support we've provided for our Texas communities in need this quarter, as well as our progress growing the network through both acquisitions and new store builds.

Alex Miller: However, before I do so, I first want to cover the support we provided for our Texas communities in need this quarter, as well as our progress growing the network through both acquisitions and new store builds. Let me begin by briefly mentioning the courageous efforts by our Texas store and operations teams during the catastrophic floods in early July. We had only a few stores directly in the path of the storm, with several more in the wider vicinity, and we are truly grateful that all Circle K team members are safe and that store damage was limited. Our store teams operated 24/7 during the recovery period, providing free water and coffee to first responders and search and rescue teams, as well as launching a statewide register campaign to raise funds for the American Red Cross.

Alex Miller: However, before I do so, I first want to cover the support we provided for our Texas communities in need this quarter, as well as our progress growing the network through both acquisitions and new store builds. Let me begin by briefly mentioning the courageous efforts by our Texas store and operations teams during the catastrophic floods in early July. We had only a few stores directly in the path of the storm, with several more in the wider vicinity, and we are truly grateful that all Circle K team members are safe and that store damage was limited. Our store teams operated 24 7 during the recovery period, providing free water and coffee to first responders and search and rescue teams, as well as launching a statewide register campaign to raise funds for the American Red Cross.

Speaker #7: Let me begin by briefly mentioning the courageous efforts by our Texas store and operations teams during the catastrophic floods in early July. We had only a few stores directly in the path of the storm, with several more in the wider vicinity, and we are truly grateful that all Circle K team members are safe and that store damage was limited.

Speaker #7: Our store teams operated 24/7 during the recovery period, providing free water and coffee to first responders, and search and rescue teams. As well as launching a statewide register campaign to raise funds for the American Red Cross.

Speaker #7: Supporting our communities is fundamental to our special culture, and we are committed to having our stores stay open providing friendly, comforting service and needed goods during the most difficult of days.

Alex Miller: Supporting our communities is fundamental to our special culture, and we are committed to having our stores stay open, providing friendly, comforting service, and needed goods during the most difficult of days. Our hearts go out to all those grieving the loss of loved ones. Turning to brighter news. Early in this quarter, we closed on the acquisition of nearly 270 stores operating under the GetGo brand from supermarket retailer Giant Eagle. In August, several members of the ACT leadership team and I had the great pleasure of meeting with over 300 GetGo store and operations team members. During that rally, I shared our excitement in having them as part of our growing family. We focused on our shared values, growth opportunities, and the power of combining GetGo's strengths in food service and loyalty with Couche-Tard's scale, technology, and global reach.

Alex Miller: Supporting our communities is fundamental to our special culture, and we are committed to having our stores stay open, providing friendly, comforting service and needed goods during the most difficult of days. Our hearts go out to all those grieving the loss of loved ones. Turning to brighter news, early in this quarter, we closed on the acquisition of nearly 270 stores operating under the GetGo brand from supermarket retailer Giant Eagle. In August, several members of the Alimentation Couche-Tard Inc. leadership team and I had the great pleasure of meeting with over 300 GetGo store and operations team members. During that rally, I shared our excitement in having them as part of our growing family. We focused on our shared values, growth opportunities, and the power of combining GetGo's strengths in food service and loyalty with Alimentation Couche-Tard Inc.'s scale, technology, and global reach.

Speaker #7: Our hearts go out to all those grieving the loss of loved ones. Turning to brighter news, early in this quarter, we closed on the acquisition of nearly 270 stores operating under the GetGo brand from supermarket retailer Giant Eagle.

Speaker #7: In August, several members of the ACT leadership team and I had the great pleasure of meeting with over 300 GetGo store and operations team members.

Speaker #7: During that rally, I shared our excitement in having them as part of our growing family. We focused on our shared values: growth opportunities and the power of combining GetGo strengths in food service and loyalty with QUCHE TARD's scale, technology, and global reach.

Speaker #7: Our food and loyalty teams have already spent a considerable amount of time at GetGo locations, deep diving into learnings on how we can become better together.

Alex Miller: Our food and loyalty teams have already spent a considerable amount of time at GetGo locations, deep-diving into learnings on how we can become better together. Moving to Europe and our four new business units there, we continue to expand Circle K branding and offers to the region, and by the end of the quarter, we had about 65 sites branded Circle K, as well as over 30 car wash sites and EV charging dispensers at nearly 185 sites. We are clearly making a positive impact on our customers and communities as we grow in these new countries. In organic growth, after record progress last year, we continue to make notable strides in our 500 new store ambition. We opened 10 new stores in Q1 and are on track to open up over 100 in North America for this fiscal year.

Alex Miller: Our food and loyalty teams have already spent a considerable amount of time at GetGo locations, deep diving into learnings on how we can become better together. Moving to Europe and our four new business units there, we continue to expand Circle K branding and offers to the region, and by the end of the quarter, we had about 65 sites branded Circle K, as well as over 30 car wash sites and EV charging dispensers at nearly 185 sites. We are clearly making a positive impact on our customers and communities as we grow in these new countries. In organic growth, after record progress last year, we continue to make notable strides in our 500 new store ambition. We opened 10 new stores in Q1 and are on track to open up over 100 in North America for this fiscal year.

Speaker #7: Moving to Europe and our four new business units there, we continue to expand Circle K branding and offers to the region. By the end of the quarter, we had about 65 sites branded Circle K, as well as over 30 car wash sites and EV charging dispensers at nearly 185 sites.

Speaker #7: We are clearly making a positive impact on our customers and communities, as we grow in these new countries. In organic growth, after record progress last year, we continue to make notable strides in our 500 new store ambition.

Speaker #7: We opened 10 new stores in Q1 and are on track to open over 100 in North America for this fiscal year. Our new stores include dozens of high-speed diesel and rural locations, and currently, we have nearly 65 stores under construction and 1,000 sites in our overall real estate development pipeline.

Alex Miller: Our new stores include dozens of high-speed diesel in rural locations, and currently, we have nearly 65 stores under construction and 1,000 sites in our overall real estate development pipeline. Now, let me get back to our quarterly results, starting with convenience. Compared to the same quarter last year, same-store merchandise revenues increased by 0.4% in the U.S., by 3.8% in Europe and other regions, and by 4.1% in Canada. As I mentioned earlier, this positive performance of same-store sales in our U.S. market was a first in many quarters, and we continue to see positive momentum building up. In Canada, same-store revenues continued to be driven by strong growth of the alcohol category, while Europe's standout convenience performance was further supported by cigarette sales in the Netherlands and Luxembourg, as new legislation and conditions continue to be favorable to our industry.

Alex Miller: Our new stores include dozens of high-speed diesel and rural locations. Currently, we have nearly 65 stores under construction and 1,000 sites in our overall real estate development pipeline. Now let me get back to our quarterly results, starting with convenience. Compared to the same quarter last year, same-store merchandise revenues increased by 0.4% in the United States, by 3.8% in Europe and other regions, and by 4.1% in Canada. As I mentioned earlier, this positive performance of same-store sales in our US market was a first in many quarters. We continue to see positive momentum building up.

Speaker #7: Now, let me get back to our quarterly results, starting with convenience. Compared to the same quarter last year, same-store merchandise revenues increased by 0.4% in the United States, by 3.8% in Europe and other regions, and by 4.1% in Canada.

Speaker #7: As I mentioned earlier, this positive performance of same-store sales and our US market was a first in many quarters. And we continue to see positive momentum building up.

Speaker #7: In Canada, same-store revenues continued to be driven by strong growth of the alcohol category, while Europe's standout convenience performance was further supported by cigarette sales in the Netherlands and Luxembourg, as new legislation and conditions continued to be favorable to our industry.

Alex Miller: In Canada, same-store revenues continued to be driven by strong growth of the alcohol category, while Europe's standout convenience performance was further supported by cigarette sales in the Netherlands and Luxembourg as new legislation and conditions continue to be favorable to our industry. We are also pleased with the recovery that we are seeing in our Hong Kong convenience business, although it is still impacted by decrease in cigarette units from outbound travel and increased sales taxes. However, normalizing for the impact of cigarette sales, our same-store merchandise revenue in Hong Kong would have increased by 2.7% compared to the same quarter last year, highlighting strong execution in our ability to grow market share. I'll now go into more detail about our convenience offer and the ways in which we are focused on winning our customers by providing compelling value on products and services.

Speaker #7: We are also pleased with the recovery that we are seeing in our Hong Kong convenience business. Although it is still impacted by decrease in cigarette units from outbound travel and increased sales taxes, however, normalizing for the impact of cigarette sales our same-store merchandise revenue in Hong Kong would have increased by 2.7% compared to the same quarter last year.

Alex Miller: We are also pleased with the recovery that we are seeing in our Hong Kong convenience business, although it is still impacted by a decrease in cigarette units from outbound travel and increased sales taxes. However, normalizing for the impact of cigarette sales, our same-store merchandise revenue in Hong Kong would have increased by 2.7% compared to the same quarter last year, highlighting strong execution and our ability to grow market share. I'll now go into more detail about our convenience offer and the ways in which we are focused on winning our customers by providing compelling value on products and services. Our meal deals in North America continue to deliver consistent quarter-over-quarter gains. At the end of Q1 in North America, we sold 8.6 million food bundles, with a weekly average exceeding 750,000, from about 540,000 at the end of FY2025, nearly a 40% increase.

Speaker #7: Highlighting strong execution in our ability to grow market share, I'll note I'll now go into more detail about our convenience offer and the ways in which we are focused on winning our customers by providing compelling value on products and services.

Speaker #7: Our meal deals in North America continue to deliver consistent quarter-over-quarter gains. At the end of Q1 in North America, we sold 8.6 million food bundles.

Alex Miller: Our meal deals in North America continue to deliver consistent quarter-over-quarter gains. At the end of Q1 in North America, we sold 8.6 million food bundles, with a weekly average exceeding 750,000 from about 540,000 at the end of FY 2025, nearly a 40% increase. We continue to optimize our meal deal offers based on vendor engagement and customer purchasing behavior, and we are actively reviewing opportunities to expand the offering to drive incremental growth. The US Roller Grill offer was our top performer alongside bakery and breakfast sandwiches. While smaller in scope, the initiative is very popular in Canada, where meal deal sales doubled in Q1 versus the prior quarter. In our win and food strategy, we have been laser-focused on execution and SKU rationalization.

Speaker #7: With a weekly average exceeding 750,000, up from about 540,000 at the end of FY25, this represents nearly a 40% increase. We continue to optimize our meal deal offers based on vendor engagement and customer purchasing behavior, and we are actively reviewing opportunities to expand the offering to drive incremental growth.

Alex Miller: We continue to optimize our meal deal promotions based on vendor engagement and customer purchasing behavior, and we are actively reviewing opportunities to expand the offering to drive incremental growth. The U.S. roller grill offer was our top performer alongside bakery and breakfast sandwiches. While smaller in scope, the initiative is very popular in Canada, where meal deal sales doubled in Q1 versus the prior quarter. In our win in food strategy, we have been laser-focused on execution and SKU rationalization. We have significantly reduced the number of items freshly prepared in our stores to enhance operational excellence and ease while optimizing our assortment. As we focus on execution, value, and simplicity, we are also dialing up the fun, flavor, and innovation with an exciting new collaboration announced just this morning.

Speaker #7: The US roller grill offer was our top performer, alongside bakery and breakfast sandwiches. While smaller in scope, the initiative is very popular in Canada, where meal deal sales doubled in Q1 versus the prior quarter.

Speaker #7: In our win in food strategy, we have been laser-focused on execution and SKU rationalization. We have significantly reduced the number of items freshly prepared in our stores to enhance operational excellence and ease while optimizing our assortment.

Alex Miller: We have significantly reduced the number of items freshly prepared in our stores to enhance operational excellence and ease while optimizing our assortment. As we focus on execution, value, and simplicity, we are also dialing up the fun, flavor, and innovation with an exciting new collaboration announced just this morning. We are partnering with Emmy Award-winning chef and Food Network personality, Guy Fieri, best known to many from his popular Diners, Drive-Ins and Dives TV show to launch 11 Flavortown inspired menu offerings. The initial rollout this week in hundreds of our locations in 10 states across the Northern US includes unique exclusive items such as Mac N' Cheese Burger, Sweet Heat Fried Chicken & Waffle Sandwich, and Candy Chaos Cookie. In our goal of owning thirst in the US, total packaged beverages were up this quarter, with energy drinks continuing to lead category strength and profitability.

Speaker #7: And as we focus on execution, value, and simplicity, we are also dialing up the fun. Flavor and innovation with an exciting new collaboration announced just this morning.

Speaker #7: We are partnering with Emmy Award-winning chef and Food Network personality Guy Fieri, best known to many from his popular "Diners, Drive-Ins and Dives" TV show, to launch 11 Flavor Town-inspired menu offerings.

Alex Miller: We are partnering with Emmy Award-winning chef and Food Network personality, Guy Fieri, best known to many from his popular Diners, Drive-Ins and Dives TV show, to launch 11 Flavortown-inspired menu offerings. The initial rollout this week in hundreds of our locations in 10 states across the northern U.S. includes unique exclusive items such as mac and cheese burger, sweet heat fried chicken and waffle sandwich, and candy chaos cookie. In our goal of owning thirst in the U.S., total packaged beverages were up this quarter, with energy drinks continuing to lead category strength and profitability. Our differentiation here comes from exclusive launches and integrated campaigns that connect energy to meal deal bundles, with over 20% of all sold breakfast bundles including an energy drink. Cold and frozen dispensed beverages in the U.S. continued their growth trajectory, benefiting from traffic-driving promotional campaigns, popular flavor options, and improved operational execution.

Speaker #7: The initial rollout this week in hundreds of our locations in 10 states across the northern U.S. includes unique exclusive items such as the mac and cheeseburger, sweet heat fried chicken, waffle sandwich, and candy chaos cookie.

Speaker #7: In our goal of owning Thirst, total packaged beverages in the U.S. were up this quarter, with energy drinks continuing to lead category strength and profitability.

Speaker #7: Our differentiation here comes from exclusive launches and integrated campaigns that connect energy to meal deal bundles, with over 20% of all sold breakfast bundles including an energy drink.

Alex Miller: Our differentiation here comes from exclusive launches and integrated campaigns that connect energy to meal deal bundles with over 20% of all sold breakfast bundles, including an energy drink. Cold and frozen dispensed beverages in the US continued their growth trajectory, benefiting from traffic-driving promotional campaigns, popular flavor options, and improved operational execution. In the adult beverage category, Canada continued to have a strong performance as our market-leading efforts are clearly resonating with our customers. Following changes last year in legislation in Ontario, our beer sales again experienced notable growth. In our Central Canada business unit, we more than doubled the sales in the wine category compared to last year. Liquor performance was equally robust.

Speaker #7: Cold and frozen dispensed beverages in the U.S. continued their growth trajectory, benefiting from traffic-driving promotional campaigns, popular flavor options, and improved operational execution.

Speaker #7: In the adult beverage category, Canada continued to have a strong performance as our market-leading efforts are clearly resonating with our customers. Following changes last year in legislation in Ontario, our beer sales again experienced notable growth.

Alex Miller: In the adult beverage category, Canada continued to have a strong performance as our market-leading efforts are clearly resonating with our customers. Following changes last year in legislation in Ontario, our beer sales again experienced notable growth. In our Central Canada business unit, we more than doubled the sales in the wine category compared to last year. Liquor performance was equally robust. The impressive same-store sales growth in alcohol in Canada more than offset the decline in tobacco in the region, which continues to be impacted by illicit trade and removal of popular products in the other nicotine products category. In the U.S., overall nicotine sales grew slightly versus last year, and despite changes in the regulatory landscape, we also had modest growth in other nicotine product sales versus last year, led by modern oral growth innovation. Our cigarette pricing optimization plan launched in June is showing promising results.

Speaker #7: In our central Canada business unit, we more than doubled the sales in the wine category compared to last year. Liquor performance was equally robust.

Speaker #7: The impressive same-store sales growth in alcohol in Canada more than offset the decline in tobacco in the region, which continues to be impacted by illicit trade and the removal of popular products in the other nicotine products category.

Alex Miller: The impressive same-store sales growth in alcohol in Canada more than offset the decline in tobacco in the region, which continues to be impacted by illicit trade and removal of popular products in the other nicotine products category. In the US, overall nicotine sales grew slightly versus last year, and despite changes in the regulatory landscape, we also had modest growth in other nicotine product sales versus last year, led by modern oral growth innovation. Our cigarette pricing optimization plan launched in June is showing promising results. Looking ahead, we are improving space productivity, deploying industry-leading promotions, and expanding loyalty integration with age-verified enrollment up quarter-over-quarter. In Europe, we see signs of recovery in the nicotine category driven by growth in other nicotine products, helping offset decline in combustibles.

Speaker #7: In the US, overall nicotine sales grew slightly versus last year, and despite changes in the regulatory landscape, we also had modest growth in other nicotine product sales versus last year, led by modern oil oral growth innovation.

Speaker #7: Our cigarette pricing optimization plan launched in June is showing promising results. Looking ahead, we are improving space productivity by deploying industry-leading promotions and expanding loyalty integration, with age-verified enrollment up quarter over quarter.

Alex Miller: Looking ahead, we are improving space productivity, deploying industry-leading promotions, and expanding loyalty integration with age-verified enrollment up quarter over quarter. In Europe, we see signs of recovery in the nicotine category, driven by growth in other nicotine products, helping offset decline in combustibles. Legislation changes in cigarettes in the Netherlands and favorable competition in Luxembourg have resulted in positive nicotine performance as consumers increasingly shift their spending toward our channel. Turning to our loyalty membership programs, in the U.S., Inner Circle enrollments continue to grow, and we're at nearly 11.5 million members at the end of the quarter. We expect to see significant growth in sign-ups as we expand the program this month to Texas, our largest U.S. market, leaning into recent advancements in personalization as well as gamification to drive urgency and excitement with our members.

Speaker #7: In Europe, we see signs of recovery in the nicotine category, driven by growth in other nicotine products, helping offset the decline in combustibles. Legislation changes in cigarettes in the Netherlands and favorable competition in Luxembourg have resulted in positive nicotine performance, as consumers increasingly shift their spending toward our channel.

Alex Miller: Legislation changes in cigarettes in the Netherlands and favorable competition in Luxembourg have resulted in positive nicotine performance as consumers increasingly shift their spending toward our channel. Turning to our loyalty membership programs. In the US, Inner Circle enrollments continue to grow, and we're at nearly 11.5 million members at the end of the quarter. We expect to see significant growth in sign-ups as we expand the program this month to Texas, our largest US market, leaning into recent advancements in personalization as well as gamification to drive urgency and excitement with our members. We have seen sustained growth in retention and repeat visits among our members. We also completed the implementation of a new customer data platform that allows us to engage with our customers at our physical sites in real time while they are filling up at the pump or shopping in our stores.

Speaker #7: Turning to our loyalty membership programs, in the US, Inner Circle enrollments continue to grow and we're at nearly 11.5 million members at the end of the quarter.

Speaker #7: We expect to see significant growth in sign-ups as we expand the program this month to Texas. Our largest US market. Leaning into recent advancements in personalization, as well as gamification to drive urgency and excitement with our members.

Speaker #7: We have seen sustained growth in retention and repeat visits among our members. We also completed the implementation of a new customer data platform that allows us to engage with our customers at our physical sites in real time while they are filling up at the pump or shopping in our stores.

Alex Miller: We have seen sustained growth in retention and repeat visits among our members. We also completed the implementation of a new customer data platform that allows us to engage with our customers at our physical sites in real time while they are filling up at the pump or shopping in our stores. Early signs are positive, and we fully expect our digital penetration to grow, driving traffic to both our forecourts and inside our stores. With the Extra loyalty program in Europe, we are on schedule to start rolling out the 2.0 loyalty concept this fall to Poland and quickly move to the other European BUs in the following months. The new concept is designed to incentivize and reward traffic across all products and services at our locations.

Speaker #7: Early signs are positive, and we fully expect our digital penetration to grow, driving traffic to both our four quarters and inside our stores. With the extra loyalty program in Europe, we are on schedule to start rolling out the 2.0 loyalty concept this fall to Poland and quickly move to the other European business units in the following months.

Alex Miller: Early signs are positive, we fully expect our digital penetration to grow, driving traffic to both our four quarters and inside our stores. With the extra loyalty program in Europe, we are on schedule to start rolling out the 2.0 loyalty concept this fall to Poland and quickly move to the other European BUs in the following months. The new concept is de-designed to incentivize and reward traffic across all products and services at our locations. In our Sweden BU, which has had the new loyalty program for several months, we are seeing a lift in both traffic and increased value as our targeted campaigns and promotional offers have improved conversion and engagement. We are also working to expand our existing communication and personalization capabilities to our four new European business units. Moving to our fuel business.

Speaker #7: The new concept is designed to incentivize and reward traffic across all products and services at our locations. In our Sweden BU, which has had the new loyalty program for several months, we are seeing a lift in both traffic and increased value as our targeted campaigns and promotional offers have improved conversion and engagement.

Alex Miller: In our Sweden BU, which has had the new loyalty program for several months, we are seeing a lift in both traffic and increased value as our targeted campaigns and promotional offers have improved conversion and engagement. We are also working to expand our existing communication and personalization capabilities to our four new European business units. Moving to our fuel business, same-store road transportation fuel volumes decreased by 0.9% in the U.S. and by 1.3% in Europe and other regions, while it increased by 2.2% in Canada. Overall, given marketing conditions, we see these as good results, especially in Canada and our larger European markets, as well as in the complex U.S. environment as we continue to work on building value from our fuel supply chain and serving our customers through lower cost sourcing options. Fuel margins in North America also remained aligned with previous quarters.

Speaker #7: We are also working to expand our existing communication and personalization capabilities to our four new European business units. Moving to our fuel business, same-store road transportation fuel volumes decreased by 0.9% in the United States and by 1.3% in Europe and other regions, while it increased by 2.2% in Canada.

Alex Miller: Same-store road transportation fuel volumes decreased by 0.9% in the United States and by 1.3% in Europe and other regions, while it increased by 2.2% in Canada. Overall, given market conditions, we see these as good results, especially in Canada and our larger European markets, as well as in the complex US environment as we continue to work on building value from our fuel supply chain and serving our customers through lower cost sourcing options. Fuel margins in North America also remained aligned with previous quarters.

Speaker #7: Overall, given market conditions, we see these as good results. Especially in Canada and our larger European markets, as well as in the complex US environment as we continue to work on building value from our fuel supply chain and serving our customers through lower-cost sourcing options.

Speaker #7: Fuel margins in North America also remained aligned with previous quarters. We also continued our efforts to provide compelling value to our customers with our very popular fuel days.

Alex Miller: We also continued our efforts to provide compelling value to our customers with our very popular fuel days, including two in August, coinciding with the beginning of school and the end of summer travel, which were held at over 4,700 participating U.S. locations. At the first one, we offered $0.40 off per gallon to Inner Circle members only, including visitors who signed up instantly to access this exclusive event as a further way to reward our loyal customers. Despite challenging market conditions and volume volatility, the European B2B business demonstrated resilience. While overall card volumes slightly underperformed versus prior year, this was effectively offset by strong margin performance. The first quarter of our fiscal year is also materially impacted by summer seasonality that hits fuel B2B sales, and we expect the full year to recover to an overall even mix.

Alex Miller: We also continued our efforts to provide compelling value to our customers with our very popular fuel days, including two in August, coinciding with the beginning of school and the end of summer travel, which were held at over 4,700 participating US locations. At the first one, we offered $0.40 off per gallon to Inner Circle members only, including visitors who signed up instantly to access this exclusive event as a further way to reward our loyal customers. Despite challenging market conditions and volume volatility, the European B2B business demonstrated resilience. While overall card volume slightly underperformed versus prior year, this was effectively offset by strong margin performance. The Q1 of our fiscal year is also materially impacted by summer seasonality that hits fuel B2B sales. We expect the full year to recover to an overall even mix.

Speaker #7: Including two in August, coinciding with the beginning of school and the end of summer travel, which were held at over 4,700 participating U.S. locations.

Speaker #7: At the first one, we offered $0.40 off per gallon to Inner Circle members only, including visitors who signed up instantly to access this exclusive event as a further way to reward our loyal customers.

Speaker #7: Despite challenging market conditions and volume volatility, the European B2B business demonstrated resilience. While overall card volumes slightly underperformed versus the prior year, this was effectively offset by strong margin performance.

Speaker #7: The first quarter of our fiscal year is also materially impacted by summer seasonality that hits fuel B2B sales. We expect the full year to recover to an overall even mix.

Speaker #7: Growing non-fuel income remains a strategic priority as B2B transit charging volumes grew steadily, offsetting a significant share of accelerated fuel shrinkage. Bulk fuel volumes remained robust despite excise duty increase in Lithuania and in intense price competition in Ireland and Norway.

Alex Miller: Growing non-fuel income remains a strategic priority as B2B transit charging volumes grew steadily, offsetting a significant share of accelerated fuel shrinkage. Bulk fuel volumes remained robust despite excise duty increase in Lithuania and intense price competition in Ireland and Norway. In the US, our B2B fuel share is growing as customers continue to see great value in our ability to offer consistency across our company-owned network to serve their business and provide a great experience for their drivers. Additionally, we expanded our B2B customers active in Inner Circle, allowing them to receive personal rewards for commercial fueling. In our B2B truck segment, we now have over 510 truck-accessible sites, including 10 GetGo sites. We are growing accessibility in parallel with our commercial diesel growth strategy, implementation of new strategic partners, and optimization of existing partnerships.

Alex Miller: Growing non-fuel income remains a strategic priority as B2B transit charging volumes grew steadily, offsetting a significant share of accelerated fuel shrinkage. Bulk fuel volumes remained robust despite excise duty increase in Lithuania and intense price competition in Ireland and Norway. In the U.S., our B2B fuel share is growing as customers continue to see great value in our ability to offer consistency across our company-owned network to serve their business and provide a great experience for their drivers. Additionally, we expanded our B2B customers active in Inner Circle, allowing them to receive personal rewards for commercial fueling. In our B2B truck segment, we now have over 510 truck accessible sites, including 10 GetGo sites. We are growing accessibility in parallel with our commercial diesel growth strategy, implementation of new strategic partners, and optimization of existing partnerships.

Speaker #7: In the US, our B2B fuel share is growing as customers continue to see great value in our ability to offer consistency across our company-owned network to serve their business and provide a great experience for their drivers.

Speaker #7: Additionally, we expanded our B2B customers' active in Inner Circle, allowing them to receive personal rewards for commercial fueling. And our B2B truck segment, we now have over 510 truck-accessible sites, including 10 get-go sites.

Speaker #7: We are growing accessibility in parallel with our commercial diesel growth strategy implementation of new strategic partners and optimization of existing partnerships. Our European EV charging network now comprises nearly 3,660 charge points, up over 35% year to year.

Alex Miller: Our European EV charging network now comprises nearly 3,660 charge points, up over 35% year-over-year. Out of these, over 2,970 are Circle K branded charge points, and about 150 of those are chargers for trucks in Scandinavia. In Q1, we had more than 1 million charging transactions on Circle K branded transit chargers at our stations in Europe, which is a 50% increase from the same period last year. This increase is driven both by network expansion and improved utilization of our chargers. With that, let me turn it over to Philippe to dive deeper into our financial performance this quarter.

Alex Miller: Our European EV charging network now comprises nearly 3,660 charge points, up over 35% year to year. Out of these, over 2,970 are Circle K branded charge points, and about 150 of those are chargers for trucks in Scandinavia. In Q1, we had more than 1 million charging transactions on Circle K branded transit chargers at our stations in Europe, which is a 50% increase from the same period last year. This increase is driven both by network expansion and improved utilization of our chargers. With that, let me turn it over to Philippe Da Silva to dive deeper into our financial performance this quarter.

Speaker #7: Out of these, over 2,970 are Circle K branded charge points, and about 150 of those are chargers for trucks in Scandinavia. In Q1, we had more than 1 million charging transactions on Circle K branded transit chargers at our stations in Europe, which is a 50% increase from the same period last year.

Speaker #7: This increase is driven both by network expansion and improved utilization of our chargers. With that, let me turn it over to Philippe to dive deeper into our financial performance this quarter.

Speaker #7: Thank you, Alex, and good morning, everyone. We are encouraged by our first-quarter results, which were partly driven by an enhanced gross profit margin resulting from better food program execution and reduced spoilage.

Filipe Da Silva: Thank you, Alex, and good morning, everyone. We are encouraged by our Q1 results, which were partly driven by an enhanced gross profit margin resulting from better food program execution and reduced spoilage. Combined with our disciplined cost control and a sharp focus on efficiency, keeping expense growth below the rate of inflation, we are optimistic about operational priorities. Building on Alex's remarks, we are pleased to report that we broke the negative trend in US same-store sales, with results accelerating as the quarter progressed. Food continued to post solid growth and shrink reached its lowest level in 8 quarters. Canada once again delivered strong mid-single-digit results. Europe posted positive results, while Asia continued to improve with positive performance in same-store sales, excluding the impact of declining cigarette volumes and notable gains across several categories.

Philippe Da Silva: Thank you, Alex, and good morning, everyone. We are encouraged by our first quarter results, which were partly driven by an enhanced gross profit margin resulting from better food program execution and reduced spoilage. When we participate in cost control and a sharp focus on efficiency, keeping expense growth below the rate of inflation, we are optimistic about operational priorities. Building on Alex's remarks, we are pleased to report that we broke the negative trend in U.S. same-store sales, with results accelerating as the quarter progressed. Food continued to post solid growth and shrink reached its lowest level in eight quarters. Canada, once again, delivered strong mid-single-digit results. Europe posted positive results, while Asia continued to improve with positive performance in same-store sales, excluding the impact of declining cigarette volumes and notable gains across several categories.

Speaker #7: Combined with our disciplined cost control and a sharp focus on efficiency, keeping expense growth below the rate of inflation, we are optimistic about our operational priorities.

Speaker #7: Building on Alex's remarks, we are pleased to report that we broke the negative trend in US same-store sales, with results accelerating as the quarter progressed.

Speaker #7: Food continued to post solid growth, and shrink reached its lowest level in eight quarters. Canada once again delivered strong mid-single-digit results. Europe posted positive results, while Asia continued to improve with positive performance in same-store sales.

Speaker #7: Excluding the impact of declining cigarette volumes and notable gains across several categories, turning to our total energy assets, performance continued to strengthen, with synergy delivery progressing ahead of plan.

Filipe Da Silva: Turning to our total energy assets, performance continued to strengthen, with synergy delivery progressing ahead of plan. Same-store merchandise revenue grew at a remarkable high single digit, approximately 30% higher than Q4 on a sequential basis. Fuel margins expanded by over 33% year-over-year. These results highlight the strength of our execution and our continued success in integrating complex acquisitions. I will now go over some key figures for the quarter. For more details, please refer to our MD&A available on our website. For the Q1 of fiscal 2026, net earnings attributable to shareholders of the corporation stood at $783 million or $0.82 per share on a diluted basis.

Philippe Da Silva: Turning to our TotalEnergies assets, performance continued to strengthen, with synergy delivery progressing ahead of plan. Same-store merchandise revenue grew at a remarkable high single digit, approximately 30% higher than Q4 on a sequential basis. Fuel margins expanded by over 33% year over year. These results highlight the strength of our execution and our continued success in integrating complex acquisitions. I will now go over some key figures for the quarter. For more details, please refer to our MD&A available on our website. For the first quarter of fiscal 2026, net earnings attributable to shareholders of the corporation stood at $783 million, or $0.82 per diluted share. Excluding certain items described in more detail in our MD&A, adjusted net earnings attributable to shareholders of the corporation were approximately $737 million, or $0.78 per adjusted diluted share, representing a decrease of 6% compared to the corresponding quarter of last year.

Speaker #7: Same-store merchandise revenue grew at a remarkable high single-digit, approximately 30% higher than Q4 on the sequential basis. Fuel margins expanded by over 33% year over year, these results highlight the strength of our execution and our continued success in integrating complex acquisitions.

Speaker #7: I will now go over some key figures for the quarter. For more details, please refer to IMDNA available on our website. For the first quarter of fiscal 2026, net earnings attributable to shareholders of the corporation stood at $783 million, or $0.82 per share on a diluted basis.

Speaker #7: Excluding certain items described in a more detailed in our MDNA, adjusted net earnings attributable to shareholders of a corporation were approximately 737 million dollars or 78 cents per share on an adjusted diluted basis, representing a decrease of 6% compared to the corresponding quarter of last year.

Filipe Da Silva: Excluding certain items described in a more detail in our MD&A, adjusted net earnings attributable to shareholders of a corporation were approximately $737 million or $0.78 per share on an adjusted diluted basis, representing a decrease of 6% compared to the corresponding quarter of last year. The adjusted EBITDA for Q1 of fiscal 2026 increased by approximately $25 million or 1.6% compared with the corresponding quarter of fiscal 2025, mainly due to the organic growth in our convenience activities and to the contribution from acquisitions, which amounted to approximately $19 million, partly offset by the gains on disposal of various assets in the previous year. Now let's review in detail each of our business segments on an FX-adjusted basis.

Speaker #7: The adjusted EBITDA for the first quarter of fiscal 2026 increased by approximately 25 million dollars or 1.6%, compared with the corresponding quarter of fiscal 2025.

Philippe Da Silva: The adjusted EBITDA for the first quarter of fiscal 2026 increased by approximately $25 million, or 1.6% compared with the corresponding quarter of fiscal 2025, mainly due to the organic growth in our convenience activities and to the contribution from acquisitions, which amounted to approximately $19 million, partly offset by the gains on disposal of value assets in the prior year. Now, let's review in detail each of our business segments on an ethics-adjusted basis. During the first quarter, merchandise and services revenues increased by approximately $158 million, or 3.5%, primarily attributable to organic growth, the contribution from acquisitions, which amounted to approximately $59 million, and the net impact from new store openings within our network. Merchandise and service gross profit increased by approximately $70 million, or 4.4%. This is primarily attributable to organic growth in all regions and to the contribution from acquisitions, which amounted to approximately $19 million.

Speaker #7: Mainly due to the organic growth in our convenience activities and to the contribution from acquisitions, which amounted to approximately 19 million dollars. Partly offset by the gains on disposal of value assets in the prior year.

Speaker #7: Now, let's review in detail each of our business segments on an ethics-adjusted basis. During the first quarter, merchandise and services revenues increased by approximately 158 million dollars or 3.5%, primarily attributable to organic growth, the contribution from acquisitions, which amounted to approximately 59 million dollars and the net impact from new store openings within our network.

Filipe Da Silva: During the Q1, merchandise and services revenues increased by approximately $158 million or 3.5%, primarily attributable to organic growth, the contribution from acquisitions, which amounted to approximately $59 million, and the net impact from new store openings within our network. Merchandise and service gross profit increased by approximately $70 million or 4.4%. This is primarily attributable to organic growth in all regions and to the contribution from acquisitions, which amounted to approximately $19 million.

Speaker #7: Merchandise and service growth profit increased by approximately 70 million dollars or 4.4%. This is primarily attributable to organic growth in all regions and to the contribution from acquisitions, which amounted to approximately 19 million dollars.

Speaker #7: Our merchandise and service growth margin in the United States increased by 0.9% to 34.6%, driven by strong food execution efforts from our food captains at the store level, higher support from vendors on promotional offers, and by the favorable shift in product mix.

Philippe Da Silva: Our merchandise and service gross margin in the U.S. increased by 0.9% to 34.6%, driven by strong food execution efforts from our food captains at the store level, higher support from vendors on promotional offers, and by the favorable shift in product mix. On the food side, margin improvement also reflects a significant reduction in shrink of more than 500 basis points, as well as our 2025 rationalization initiatives, ensuring that our promotions and products are relevant to our customers. Our merchandise and service gross margin decreased by 0.9% to 38.9% in Europe and other regions, and by 0.9% to 33.9% in Canada, both impacted by changes in product mix with the implementation of new legislation in our various locations.

Filipe Da Silva: Our merchandise and service gross margin in the United States increased by 0.9% to 34.6%, driven by strong food execution efforts from our food captains at the store level, higher support from vendors on promotional offers, and by the favorable shift in product mix. On the food side, margin improvement also reflects a significant reduction in shrink of more than 500 basis points, as well as our 2025 rationalization initiatives, ensuring that our promotions and products are relevant to our customers. Our merchandise and sales growth margin decreased by 0.9% to 38.9% in Europe and other regions, and by 0.9% to 33.9% in Canada, both impacted by changes in product mix with the implementation of new legislation in our various locations. Moving on to the fuel side of our business.

Speaker #7: On the food side, margin improvement also reflects a significant reduction in shrink of more than 500 basis points as well as our 2025 rationalization initiatives, ensuring that our promotions and products are relevant to our customers.

Speaker #7: Our merchandise and service growth margin decreased by 0.9% to 38.9% in Europe and other regions, and by 0.9% to 33.9% in Canada, both impacted by changes in product mix with the implementation of new legislation in our various locations.

Speaker #7: Moving on to the fuel side of our business, our road transportation fuel growth margin was 44 cents per gallon in the United States, a decrease of 4.13 cents, mainly due to competitive pressure.

Philippe Da Silva: Moving on to the fuel side of our business, our road transportation fuel gross margin was $0.44 per gallon in the U.S., a decrease of $0.0413, mainly due to competitive pressure, especially in our southern markets. In Europe and other regions, margin averaged $0.1141 per liter and increased $0.0273 due to improved fuel market conditions in certain of our regions. In Canada, margin averaged CAD 0.1421 per liter and increased CAD 0.011. Fuel margin remained healthy throughout our network due to the continued work on the optimization of our supply chain and strong execution in our stores and leveraging our global scale. Turning to SG&A, normalized expenses for the first quarter of fiscal 2026 rose by 2.4% year over year, reflecting disciplined cost management on core operating expenses across all regions. Our teams continue to offset inflationary pressures with store-level productivity improvement, allowing us to remain ahead of weighted inflation.

Filipe Da Silva: Our road transportation fuel growth margin was $0.44 per gallon in the United States, a decrease of $0.0413, mainly due to a competitive pressure, especially in our southern markets. In Europe and other regions, margin average 11.41 US cents per liter, an increase of 2.73 cents due to improved fuel market conditions in certain of our regions. In Canada, margin average 14.21 Canadian cents per liter, an increase of 1.1 cents. Fuel margin remains healthy throughout our network due to the continued work on the optimization of our supply chain and strong execution in our stores and leveraging our global scale.

Speaker #7: Especially in our southern markets, the impacts alone of Europe and other regions sorry, in Europe and other regions, margin averaged 11.41 US cents per liter and increased of 2.73 cents due to improved fuel market conditions in certain of our regions and in Canada, margin averaged 14.21 Canadian cents per liter and increased of 1.1 cents.

Speaker #7: Fuel margin remained healthy throughout our network due to the continued work on the optimization of our supply chain, strong execution in our stores, and leveraging our global scale.

Speaker #7: Turning to SG&A, normalized expenses for the first quarter of fiscal 2026 rose by 2.4% year over year, reflecting disciplined cost management on core operating expenses across all regions.

Filipe Da Silva: Turning to SG&A, normalized expenses for the Q1 of fiscal 2026 rose by 2.4% year-over-year, reflecting disciplined cost management on core operating expenses across all regions. Our teams continue to offset inflationary pressures with store-level productivity improvement, allowing us to remain ahead of weighted inflation. A large part of this outcome reflects the ongoing success of our Fit to Serve program, which is enabling us to run operations more efficiently while creating the capacity to fund the strategic investment that are driving our next phase of growth. Within Fit to Serve, labor productivity continues to improve. US associate overtime wages remain below 3%, marking 20 consecutive months and the ninth straight month below 2.5%. In Q1, overtime stood at 2.3% versus 3% last year.

Speaker #7: Our teams continued to offset inflationary pressures with store-level productivity improvement, allowing us to remain ahead of weighted inflation. A large part of this outcome reflects the ongoing success of our feed-to-sell program, which is enabling us to run operations more efficiently while creating the capacity to fund the strategic investment that are driving our next phase of growth.

Philippe Da Silva: A large part of this outcome reflects the ongoing success of our Fit-to-Serve program, which is enabling us to run operations more efficiently while creating the capacity to fund the strategic investments that are driving our next phase of growth. Within Fit-to-Serve, labor productivity continues to improve. U.S. associate overtime wages remain below 3%, marking 20 consecutive months and the ninth straight month below 2.5%. In the first quarter, overtime stood at 2.3% versus 3% last year. These results are clear evidence that our investment in handheld devices, optimized labor scheduling, and process automation are translating into greater efficiency and improved customer-facing hours. We are also capturing further savings and making good progress through centralization of procurement for goods not for resale, making better use of our global purchasing scale.

Speaker #7: Within feed-to-sell, labor productivity continues to improve. U.S.-associated overtime wages remain below 3%, marking 20 consecutive months and the ninth straight month below 2.5%. In the first quarter, overtimes stood at 2.3% versus 3% last year.

Speaker #7: These results are clear evidence that our investment in handheld devices optimized labor scheduling and process automation are translating into greater efficiency and improved customer-facing hours.

Filipe Da Silva: These results are clear evidence that our investment in handheld devices, optimized labor scheduling, and process automation are translating into greater efficiency and improved customer-facing hours. We are also capturing further savings and making good progress through centralization of procurement for goods not for resale, making better use of our global purchasing scale. We also delivered solid progress on shrink and spoilage, with total shrink improving by an impressive 13.3% compared to last year. These gains stem from new operating methods, stronger processes and controls, and more effective use of data analytics. Shrink and spoilage improvements are becoming an important contributor to offsetting inflationary pressures and supporting margins. Turning to strategic investment, we are making deliberate investments in technology and operational tools to position the company for long-term growth.

Speaker #7: We are also capturing further savings and making good progress through centralization of procurement for goods not for resale, making better use of our global purchasing scale.

Speaker #7: We also delivered solid progress on shrink and spoilage with total shrink improving by an impressive 13.3% compared to last year. These gains, stemmed from new operating methods, stronger processes and controls, and more effective use of data analytics.

Philippe Da Silva: We also delivered solid progress on shrink and spoilage, with total shrink improving by an impressive 13.3% compared to last year. These gains stem from new operating methods, stronger processes and controls, and more effective use of data analytics. Shrink and spoilage improvements are becoming an important contributor to offsetting inflationary pressures and supporting margins. Turning to strategic investment, we are making deliberate investments in technology and operational tools to position the company for long-term growth. As Alex Miller mentioned earlier, in Q1, we made significant progress on the North American rollout of RELX. The pilot phase will begin in September across four business units, with broader deployments slated for the first half of calendar 2026. We expect RELX to materially improve in-stock conditions, reduce inventory days on hand, and lower spoilage, while also bolstering collaboration with our vendor partners.

Speaker #7: Shrink and spoilage improvements are becoming an important contributor to offsetting inflationary pressures and supporting margins. Turning to strategic investment, we are making deliberate investments in technology and operational tools to position the company for long-term growth.

Speaker #7: As Alex mentioned earlier, in Q1, we made significant progress on the North American rollout of RELEX. The pilot phase will begin in September across four business units, with broader deployments slated for the first half of calendar 2026.

Filipe Da Silva: As Alex mentioned earlier, in Q1, we made significant progress on the North American rollout of Relax. The pilot phase will begin in September across 4 business units, with broader deployment slated for the first half of calendar 2026. We expect Relax to materially improve in-stock conditions, reduce inventory days on hand, and lower spoilage, while also bolstering collaboration with our vendor partners. Beyond Relax, we continue to build on the digital foundation we laid over the past year. Our labor scheduler and upgraded handheld devices are now embedded in more stores, further streamlining day-to-day execution and allowing teams to elevate customer experience. Early results from our AI task management pilot remain promising, helping store managers translate data into clear priorities with greater speed. As we move forward, disciplined cost management remains our top priority.

Speaker #7: We expect RELEX to materially improve in-stock conditions, reduce inventory days on hand, and lower spoilage, while also bolstering collaboration with our vendor partners. Beyond RELEX, to continue to build on the digital foundation we laid over the past year, our labor scheduler and upgraded handheld devices are now embedded in more stores, further streamlining day-to-day execution and allowing teams to elevate the customer experience.

Philippe Da Silva: Beyond RELX, we continue to build on the digital foundation we laid over the past year. Our labor scheduler and upgraded handheld devices are now embedded in more stores, further streamlining day-to-day execution and allowing teams to elevate customer experience. Early results from our AI task management pilot remain promising, helping store managers translate data into clear priorities with greater speed. As we move forward, disciplined cost management remains our top priority. With Fit-to-Serve driving consistent efficiency, shrink and spoilage improvement gaining traction, and targeted technology investment advancing on schedule, we remain committed on delivering OpEx growth below weighted inflation as we move through fiscal 2026.

Speaker #7: Early results from our AI task management pilot remain promising, helping store managers translate data into clear priorities with greater speed. As we move forward, disciplined cost management remains our top priority.

Speaker #7: With feed-to-sell driving consistent efficiency, shrink and spoilage improvement gaining traction, and targeted technology investment advancing on schedule, we remain committed to delivering OPEX growth below weighted inflation as we move through fiscal 2026.

Filipe Da Silva: With Fit to Serve driving consistent efficiency, shrink and spoilage improvement gaining traction, and targeted technology investment advancing on schedule, we remain committed on delivering OpEx growth below weighted inflation as we move through fiscal 2026. Turning over to depreciation and amortization, expenses increased by $79 million, or 17.9% year-over-year, reflecting investment related to recent acquisition, including the GetGo assets, which amounted to approximately $6 million, along with equipment upgrades, store remodel programs, new store openings, technology enhancement, and EV charger deployments. This initiative represents significant strategic investment made in recent quarters. From a tax perspective, the income tax rate for Q1 of fiscal 2026 was 23.2%, compared with 23.1% for the corresponding quarter of fiscal 2025.

Speaker #7: Turning over to depreciation and amortization, expenses increased by $79 million or 17.9% year over year, reflecting investment related to recent acquisitions, including the get-go assets, which amounted to approximately $6 million, along with equipment upgrades, store remodel programs, new store openings, technology enhancement, and EV charger deployments.

Philippe Da Silva: Turning over to depreciation and amortization, expenses increased by $79 million, or 17.9% year over year, reflecting investments related to recent acquisitions, including the GetGo assets, which amounted to approximately $6 million, along with equipment upgrades, store remodel programs, new store openings, technology enhancement, and EV charger deployments. These initiatives represent significant strategic investments made in recent quarters. From a tax perspective, the income tax rate for the first quarter of fiscal 2026 was 23.2% compared with 23.1% for the corresponding quarter of fiscal 2025. The increase in many stemming from a higher income tax rate due to the gain on regulatory divestiture related to business acquisitions, partly offset by the impact of the different mix in our earnings across the various jurisdictions in which we operate. As of July 2025, we recorded a return on equity at 17.5% and a return on capital employed at 11.8%.

Speaker #7: These initiatives represent significant strategic investments made in recent quarters. From a tax perspective, the income tax rate for the first quarter of fiscal 2026 was 23.2%, compared with 23.1% for the corresponding quarter of fiscal 2025.

Speaker #7: The increase in many stemming from higher income tax rates due to the gain on regulatory diversity related to business acquisitions, partly offset by the impact of the different mix in our earnings, across a various jurisdictions in which we operate.

Filipe Da Silva: The increase is mainly stemming from higher income tax rate due to the gain on regulatory divestiture related to business acquisitions, partly offset by the impact of a different mix in our earnings across the various jurisdictions in which we operate. As of 20 July 2025, we recorded a return on equity at 17.5%, and our ROCE stood at 11.8%. During the quarter, our leverage ratio increased to 2.18. We also had strong balance sheet liquidity with $2.2 billion in cash and an additional $2 billion available through our revolving unsecured operating credit facility. During the quarter, we repaid our Canadian dollar-denominated senior unsecured notes for CAD 700 million.

Speaker #7: As of July 2025, we recorded a return on equity of 17.5%, and our return on capital employed stood at 11.8%. During the quarter, our leverage ratio increased to 2.18.

Philippe Da Silva: During the quarter, our leverage ratio increased to 2.18. We also had strong balance sheet liquidity with $2.2 billion in cash and an additional $2 billion available through our revolving unsecured operating credit facility. During the quarter, we repaid our Canadian dollar denominated senior unsecured notes for CA$700 million. Subsequent to the end of the first quarter, we repurchased 7.9 million common shares for an amount of $405.4 million following the July 21 announcement authorizing our share buyback program. With the program now in full motion, we review repurchases as an effective way to create sustainable long-term shareholder value while optimizing our balance sheet. Turning to the dividend, the Board of Directors declared yesterday a quarterly dividend of CA$0.195 per share for the first quarter of fiscal 2026 to shareholders on record as of September 11, 2025, and approved its payment effective September 25, 2025.

Speaker #7: We also had strong balance sheet liquidity, with $2.2 billion in cash and an additional $2 billion available through our revolving unsecured operating credit facility.

Speaker #7: During the quarter, we repaid our Canadian dollar-denominated senior unsecured note for $700 million Canadian. Subsequent to the end of the first quarter, we repurchased 7.9 million common shares for an amount of $405.4 million following the July 21st announcement authorizing our share buyback program.

Filipe Da Silva: Subsequent to the end of Q1, we repurchased 7.9 million common shares for an amount of CAD 405.4 million, following the 21 July announcement authorizing our share buyback program. With the program now in full motion, we view repurchases as an effective way to create sustainable long-term shareholder value while optimizing our balance sheet. Turning to the dividend, the board of directors declared yesterday a quarterly dividend of CAD 0.195 per share for Q1 of fiscal 2026 to shareholders on record as of 11 September 2025, and approved its payment effective 25 September 2025. To wrap up, Q1 of fiscal 2026 highlights the strength of our business model and the discipline of our teams.

Speaker #7: While the program now with the program now in full motion, we view repurchase we review repurchases as an effective way to create sustainable long-term shareholder value while optimizing our balance sheet.

Speaker #7: Turning to the dividend, the Board of Directors declared yesterday a quarterly dividend of $0.195 Canadian per share for the first quarter of fiscal 2026.

Speaker #7: To shareholders on record as of September 11, 2025, and approved its payment effective September 25, 2025. To wrap up, the first quarter of fiscal 2026 highlights the strength of our business model and the discipline of our teams.

Philippe Da Silva: To wrap up, the first quarter of fiscal 2026 highlights the strength of our business model and the discipline of our teams. We entered this year with solid momentum, demonstrating our ability to manage costs effectively while investing in the tools and capabilities that support the next phase of growth. We are very encouraged by the top-line momentum we're seeing across the business. Our initiatives in food, beverages, fuel, and our enhanced loyalty program are delivering positive results, reinforcing the benefits of our customer-focused strategy. The diversity of our global network and the rigor of our operating model continue to provide resilience in an evolving environment. Looking ahead, we remain focused on maintaining firm control of our expenses, deploying capital with purpose, and prioritizing investment that enhances our competitive position and creates long-term value.

Speaker #7: We enjoyed this year with solid momentum, demonstrating our ability to manage costs effectively while investing in the tools and capabilities that support the next phase of growth.

Filipe Da Silva: We entered this year with solid momentum, demonstrating our ability to manage costs effectively while investing the tools and capability that support the next phase of growth. We are very encouraged by the top-line momentum we're seeing across the business. Our initiatives in food, beverages, fuel, and our enhanced loyalty program are delivering positive results, reinforcing the benefits of our customer-focused strategy. The diversity of our global network and the rigor of our operating model continue to provide resilience in an evolving environment. Looking ahead, we remain focused on maintaining firm control over expenses, deploying capital with purpose, and prioritizing investment that enhance our competitive position and create long-term value. This balanced approach positions us to strengthen the fundamentals of our business and delivering consistent results in fiscal 2026. I thank you all for your attention.

Speaker #7: We are very encouraged by the top-line momentum we're seeing across the business. Our initiatives in food, beverages, fuel, and enhanced loyalty programs are delivering positive results, reinforcing the benefits of our customer-focused strategy.

Speaker #7: The diversity of our global network and the rigor of our operating model continue to provide resilience in an evolving environment. Looking ahead, we remain focused on maintaining firm control over expenses, deploying capital with the flows, and prioritizing investment to enhance our competitive position and create long-term value.

Speaker #7: This balanced approach positions us to strengthen the fundamentals of our business and deliver consistent results in fiscal 2026. I thank you all for your attention.

Philippe Da Silva: This balanced approach positions us to strengthen the fundamentals of our business and deliver consistent results in fiscal 2026. I thank you all for your attention. I will turn the floor over again to our President and CEO, Alex Miller.

Speaker #7: I will turn the call over again to our President and CEO, Alex Miller. Thank you, Philippe. After many challenging quarters in retail, we are pleased to see progress in our convenience business as our customers respond to our value-creating initiatives.

Filipe Da Silva: I will turn the call over again to our President and CEO, Alex Miller.

Alex Miller: Thank you, Philippe. After many challenging quarters in retail, we are pleased to see progress in our convenience business as our customers respond to our value-creating initiatives. We are focused on getting back to easy at our location. This includes having our forecourts and inside store operations ready for our customers, simplifying execution of our food program, and increasing personalizations and savings in our loyalty programs. While challenging geopolitical conditions persist across our network, we are confident that our global scale, diversified business, and commitment to winning our customers will move us forward in our vision to become the preferred destination for convenience and mobility. On that note, let's turn it over to the operator to answer analyst questions.

Alex Miller: Thank you, Philippe. After many challenging quarters in retail, we are pleased to see progress in our convenience business as our customers respond to our value-creating initiatives. We are focused on getting back to easy at our location. This includes having our forecourts and inside store operations ready for our customers, simplifying execution of our food program, and increasing personalization and savings in our loyalty programs. While challenging geopolitical conditions persist across our network, we are confident that our global scale, diversified business, and commitment to winning our customers will move us forward in our vision to become the preferred destination for convenience and mobility. On that note, let's turn it over to the operator to answer analyst questions.

Speaker #7: We are focused on getting back to easy at our location, this includes having our four quarters and inside store operations ready for our customers simplifying execution of our food program and increasing personalization and savings in our loyalty programs.

Speaker #7: While challenging geopolitical conditions persist across our network, we are confident that our global scale, diversified business, and commitment to winning our customers will move us forward in our vision to become the preferred destination for convenience and mobility.

Speaker #7: On that note, let's turn it over to the operator to answer analyst questions.

Speaker #2: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the one on your touchstone phone.

Operator: Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press star followed by the one on your touch-tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment please for your first question. Your first question comes from Chris Lee with Desjardins. Your line is now open.

Joelle: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the one on your touch-tone phone. You will hear promptly 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 speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Your first question comes from Chris Lee with Desjardins. Your line is now open.

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

Speaker #2: If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Your first question comes from Chris Lee with Desjardins.

Speaker #2: Your line is now open.

Speaker #8: Hi, good morning, everyone. I wanted to ask Alex, in the US, in the quarter, did you see an improvement in your US merchandise same-store sales through the quarter?

Christopher Li: Hi, good morning, everyone. I wanted to ask Alex, in the US, in the quarter, did you see an improvement in your US merchandise same-store sales through the quarter? If so, what drove the improvement? Did the momentum continuing, is it continuing to Q2? Thank you.

Chris Li: Hi, good morning, everyone. I wanted to ask Alex, in the US, in the quarter, did you see an improvement in your US merchandise same-store sales through the quarter? If so, what drove the improvement? Did the momentum continuing, is it continuing to Q2? Thank you.

Mathieu Brunet: Hi, good morning, everyone. I wanted to ask, Alex, in the U.S., in the quarter, did you see an improvement in your U.S. merchandise same-store sales through the quarter? If so, what drove the improvement, and did the momentum continue, is it continuing to Q2? Thank you.

Speaker #8: If so, what drove the improvement, and did the momentum continue? Is it continuing into Q2? Thank you.

Speaker #7: Yeah, thanks for the question, Chris. We did. Period three, or the final month of the quarter, was the strongest top-line quarter or month or period we have had in well over two years.

Alex Miller: Yeah, thanks for the question, Chris Li. We did. Period three or the final month of the quarter was the strongest top line quarter or month or period we have had in well over two years. That has continued into Q2 through P four, and we're now into P five. We've had 10 straight weeks of positive same-store sales in the United States and Canada. I think, you know, what's driving that is, you know, our kind of laser focus on our core initiatives, specifically around food. We grew food service 4.5% in the quarter. We grew food gross margin by 500 basis points.

Alex Miller: Yeah, thanks for the question, Chris. We did. Period three, or the final month of the quarter, was the strongest top-line quarter or month or period we have had in well over two years. That has continued into Q2 through Q4, and we're now into Q5. We've had 10 straight weeks of positive same-store sales in the U.S. and Canada. I think what's driving that is our kind of laser focus on our core initiatives, specifically around food. We grew food service 4.5% in the quarter. We grew food gross margin by 500 basis points. I talked in my comments about our food bundles and the continued trajectory of that and our ability to show and highlight value for our customers that they're really responding to. Our digital platforms are continuing to scale with a great consumer response. We grew enrollment in Inner Circle in the U.S.

Speaker #7: And that has continued into Q2. Through P4, and we're now into P5, we've had 10 straight weeks of positive same-store sales in the United States and Canada.

Speaker #7: I think, you know, what's driving that is, you know, our kind of laser focus on our core initiatives, specifically around food. We grew food service four and a half percent in the quarter.

Speaker #7: We grew food gross margin by 500 basis points. You know, just I talked in my comments about our food bundles. And the continued trajectory of that and our ability to show and highlight value for our customers that they're really responding to.

Alex Miller: You know, I talked in my comments about our food bundles and the continued trajectory of that and our ability to show and highlight value for our customers that they're really responding to. Our digital platforms are continuing to scale with a great consumer response. We grew enrollment in Inner Circle in the US 11% quarter-on-quarter. We continue to see increased visits and heightened baskets from these customers. Our customers within Inner Circle, we grew merch sales by 4%, and we grew fuel gallons by 3% in the quarter. You know, for us, the underlying environment, we haven't seen change much. We continue to see lower income, lower middle income consumers, stretched, strained, really controlling their spending. That's really across all of our geographies.

Speaker #7: Our digital platforms, our continuing to scale with a great consumer response we grew enrollment in Inner Circle in the US 11% quarter on quarter.

Alex Miller: 11% quarter on quarter. We continue to see increased visits and heightened baskets from these customers. Our customers within Inner Circle, we grew merch sales by 4% and we grew fuel gallons by 3% in the quarter. For us, the underlying environment, we haven't seen change much. We continue to see lower income, lower middle income consumers stretched, strained, really controlling their spending. That's really across all of our geographies. We fundamentally believe we're widening the gap to our competition and taking share. We took three, we grew cigarette sales 3% against the industry in sales in the quarter as an example.

Speaker #7: We continue to see increased visits and heightened baskets from these customers. Our customers within Inner Circle we grew merch sales by 4% and we grew fuel gallons by 3%.

Speaker #7: In the quarter, so you know, for us, the underlying environment, we haven't seen change much. We continue to see lower income, lower middle income consumers.

Speaker #7: Stretched, strained, really controlling their spending. That's really across all of our geographies. We fundamentally believe we're widening the gap to our competition and taking share.

Alex Miller: We fundamentally believe we're widening the gap to our competition, and taking share. We grew cigarette sales 3% against the industry and sales in the quarter as an example.

Speaker #7: We took three. We grew cigarette sales by 3% against the industry and sales in the quarter as an example.

Speaker #8: Perfect. Maybe just a quick follow-up on that. Just in terms of the competitive environment, you know, we're seeing some increased competition from some of your large QSR peers.

Christopher Li: Perfect. Maybe just a quick follow-up, on that. Just in terms of the competitive environment, you know, we're seeing some increased competition, from some of your large QSR peers. How is that sort of impacting your business right now? I think you also made some reference about increased fuel competition in the South. If you can sort of elaborate on what's driving that would be helpful. Thank you.

Chris Li: Perfect. Maybe just a quick follow-up, on that. Just in terms of the competitive environment, you know, we're seeing some increased competition, from some of your large QSR peers. How is that sort of impacting your business right now? I think you also made some reference about increased fuel competition in the South. If you can sort of elaborate on what's driving that would be helpful. Thank you.

Mathieu Brunet: Perfect. Maybe just a quick follow-up on that. Just in terms of the competitive environment, you know, we're seeing some increased competition from some of your large QSR peers. How is that sort of impacting your business right now? I think you also made some reference about increased fuel competition in the South. If you can sort of elaborate on what's driving that, that would be helpful. Thank you.

Speaker #8: How is that in sort of impacting your business right now? And I think you also made some reference about increased fuel competition in the south.

Speaker #8: If you can sort of elaborate on what's driving that, that would be helpful. Thank you.

Speaker #7: Yeah, thanks, Chris. I think, as we stated, we're pleased with our fuel performance in the quarter. We think it was solid. We beat Opus in the U.S. by 4.5 cents.

Alex Miller: Yeah. Thanks, Chris. I think as we stated, we're pleased with our fuel performance in the quarter. We think it was solid. We beat OPIS in the US by four and a half cents. That fits pretty well into the range of our outperformance against industry. We continue to invest in what we believe is our world-class supply and logistics piece. I think, you know, if you look for us, our portfolio is a little challenged right now in that we have heavy presence in southern border states. Typically Florida, Texas, and Arizona. We have over 2,000 sites in those three states. You know, fuel transactions are down kinda mid to high single digits in those three states.

Alex Miller: Yeah, thanks, Chris. I think as we stated, we're pleased with our fuel performance in the quarter. We think it was solid. We beat Opus in the U.S. by 4.5%. That fits pretty well into the range of our outperformance against industry, and we continue to invest in what we believe is our world-class supply and logistics piece. If you look for us, our portfolio is a little challenged right now in that we have a heavy presence in southern border states, specifically Florida, Texas, and Arizona. We have over 2,000 sites in those three states. Fuel transactions are down kind of mid to high single digits in those three states. When you consider our performance against that, I think it highlights how we're taking share, and that's continued into Q3 and Q4. We feel good. We feel like we're widening the gap.

Speaker #7: That fits pretty well into the range of our outperformance against the industry, and we continue to invest in what we believe is our world-class supply and logistics piece.

Speaker #7: I think, you know, if you look for us, our portfolio is a little challenged right now in that we have a heavy presence in southern border states, specifically Florida, Texas, and Arizona.

Speaker #7: We have over 2,000 sites in those three states. Fuel transactions are down kind of mid to high single digits in those three states.

Speaker #7: So you know, when you consider our performance against that, again, I think it highlights how we're taking share and that's continued into P3 and P4.

Alex Miller: You know, when you consider our performance against that, again, I think it highlights how we're taking share. That's continued into P3 and P4. You know, we feel good. We feel like we're widening the gap. We believe our investments in digital are working, are gaining traffic, gaining sales, pushing fuel volume. You know, fundamentally on fuel margin in the US, costs continue to increase. Our balance sheet and our, and our profit and loss statement is as strong as anyone's. Those cost increases and that need for fuel margin exist, and we're gonna price to the customer and our value proposition, that never changes. We believe fuel margin will be there.

Speaker #7: So you know, we feel good. We feel like we're widening the gap. We believe our investments in digital are working, gaining traffic, gaining sales, and pushing fuel volume.

Alex Miller: We believe our investments in digital are working, are gaining traffic, gaining sales, pushing fuel volume, and fundamentally on fuel margin in the U.S., costs continue to increase. Our balance sheet and our profit and loss statement is as strong as anyone's, and those cost increases and that need for fuel margin exist, and we're going to price to the customer and our value proposition that never changes, but we believe fuel margin will be there.

Speaker #7: And you know, fundamentally, on fuel margin in the U.S., costs continued to increase. Our balance sheet and our profit and loss statement are as strong as anyone's.

Speaker #7: And those cost increases and that need for fuel margin exist. And we're going to price to the customer and our value proposition that never changes.

Speaker #7: But we believe the fuel margin will be there. And also.

Filipe Da Silva: On the first part of your question, Chris Lee, on the QSR competition and the... I think you know the result that we are showing on Q1, and as mentioned by Alex, the momentum that we see also in Q2. We believe that our food program is really resonating to our customers, you know. When you see the evolution of the value meals and the quantity of value that we've been able to sell. You have seen also the GP profile. We are able to do that, executing better, delivering higher food gross profit. Yeah, very confident that we are in the right direction and that we're winning in our industry, actually.

Philippe Da Silva: On the first part of your question, Chris, on the QSR competition, I think the result that we are showing on Q1, and as mentioned by Alex, the momentum that we see also in Q2, we believe that our food program is really resonating to our customers. When you see the evolution of the value meals and the quantity of value that we have been able to sell, and you have seen also the GP profile, we are able to do that, executing better, delivering higher food gross profits. Yeah, very confident that we are in the right direction and that we are winning in our industry, actually.

Speaker #6: Can you first part of your

Speaker #7: Question, Chris, on the QSR competition. I think you know the results that we are showing for Q1, and as mentioned by Alex, the momentum that we see also in Q2.

Speaker #7: We believe that our food program is really a resonating to our customers, you know, when you see the evolution of the value meals and the quantity of, you know, of menu that we have been able to sell.

Speaker #7: And you have seen also the GP profile. So we are able to do that, executing better, delivering higher food gross profit. So yeah, very confident that we are in the right direction and that we are winning in our industry, actually.

Speaker #8: Great. Thank you. And all the best.

Operator: Great. Thank you, and all the best.

Chris Li: Great. Thank you, and all the best.

Mathieu Brunet: Philippe, thank you and all the best.

Speaker #2: Your next question comes from Irene Natal with RBC Capital Markets. Your line is now open.

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

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

Speaker #9: Thanks and good morning, everyone. Just continuing with questions around the inside store performance. Certainly great to see the value meal progression. Can you talk about some of the other initiatives that you have in place, however, to provide value to consumers?

Operator: Thanks. Good morning, everyone. Just continuing with questions around the inside store performance. Certainly great to see the value meal progression. Can you talk about some of the other initiatives that you have in place, however, to provide value to consumers, with aside from the meal bundles, whether it's private label or other types of vendor partnerships?

Irene Nattel: Thanks. Good morning, everyone. Just continuing with questions around the inside store performance. Certainly great to see the value meal progression. Can you talk about some of the other initiatives that you have in place, however, to provide value to consumers, with aside from the meal bundles, whether it's private label or other types of vendor partnerships?

Speaker 7: Thanks, and good morning, everyone. Just continuing with questions around the inside store performance. Certainly great to see the value meal progression. Can you talk about some of the other initiatives that you have in place, however, to provide value to consumers aside from the meal bundles, whether it's private label or other types of vendor partnerships?

Speaker #9: Aside from the meal bundles, whether it's privately labeled or other types of vendor partnerships.

Speaker #7: Yeah, thanks, Irene. I think, you know, I don't want to dismiss fuel bundles and the resonance that's happening with our customers and the breadth of our beverage offers that we are able to offer customers.

Alex Miller: Yeah. Thanks, Irene. I think, you know, I don't wanna dismiss fuel bundles and the resonance that that's happening with our customers and the breadth of our beverage offers that we are able to offer customers and our vendor partners that are leaning into those offers, specifically related to energy, which is the fastest-growing category in our stores today. I think to your question, private label remains a big focus for us. We're in a reset mode, kinda similar to what we did in food, where we kinda reset, kinda rationalize SKUs, and then that enabled us to grow. I would say we're in that stage in private label, and we will continue to focus on private label and grow private label. I think we also...

Alex Miller: Yeah, thanks, Irene. I think, you know, I don't want to dismiss fuel bundles and the resonance that that's having with our customers and the breadth of our beverage offers that we are able to offer customers and our vendor partners that are leaning into those offers, specifically related to energy, which is the fastest growing category in our stores today. I think to your question, private label remains a big focus for us. We're in a reset mode, kind of similar to what we did in food, where we kind of reset, kind of rationalize SKUs, and then that enabled us to grow. I would say we're in that stage in private label, and we will continue to focus on private label and grow private label.

Speaker #7: And our vendor partners that are leaning into those offers, specifically related to energy, which is the fastest-growing category in our stores today. I think to your question, private label remains a big focus for us.

Speaker #7: We're in a reset mode, kind of similar to what we did in food, where we kind of reset and rationalized SKUs, and then that enabled us to grow.

Speaker #7: I would say we're in that stage in private label, and we will continue to focus on private label and grow private label. I think as you look at cigarettes and nicotine, and the promotions that we are able to run with our vendors, we are able to offer meaningful value across those things.

Alex Miller: I think we also, you know, as you look at cigarettes and nicotine and the promotions that we are able to run with our vendors, we are able to offer meaningful value across those things. Just here in September, we have a promotion with white nicotine where if you buy a tobacco product from us, with a couple exceptions, you can get a free can of Zyn, which is a white nicotine product in the U.S. That is a compelling offer. Through those things, Irene, we are increasingly finding ways to promote value and leverage our scale and work with our vendor partners. I think our digital platforms, our partners are responding to. It's how they want to talk to our joint consumers, and they are leaning in with us around promotions really across our box to target specific customers and specific segments with value offers.

Alex Miller: You know, as you look at cigarettes and nicotine and the promotions that we are able to run with our vendors, we are able to offer meaningful value across those things. Just here in September, we have a promotion with white nicotine, where if you buy a tobacco product from us, with a couple exceptions, you can get a free can of Zyn, which is a white nicotine product in the US. That is a compelling offer. Through those things, Irene, we are increasingly finding ways to promote value, and leverage our scale and work with our vendor partners. I think our digital platforms, our partners are responding to.

Speaker #7: Just here in September, we have a promotion with white nicotine where, if you buy a tobacco product from us, with a couple of exceptions, you can get a free can of Zin, which is a white nicotine product in the U.S.

Speaker #7: That is a compelling offer. So through those things, Irene, we are increasingly finding ways to promote value, leverage our scale, and work with our vendor partners.

Speaker #7: And I think our digital platforms are partners are responding to. It's how they want to talk to our joint consumers. And they are leaning in with us around promotions, really across our box, to target specific customers and specific segments with value offers.

Alex Miller: It's how they wanna talk to our joint consumers, and they are leaning in with us around promotions really across our box, to target specific customers and specific segments with value offers.

Operator: That's really helpful. Thank you. It would also seem that, you know, if we take a step back and look at the objectives of your CPG partners, now would be a very good time to continue to partner 'cause they're really focused on driving volume as well. As we look ahead through the year, you know, presumably, you have a series of these types of partnerships lined up to continue to support from a margin perspective?

Irene Nattel: That's really helpful. Thank you. It would also seem that, you know, if we take a step back and look at the objectives of your CPG partners, now would be a very good time to continue to partner 'cause they're really focused on driving volume as well. As we look ahead through the year, you know, presumably, you have a series of these types of partnerships lined up to continue to support from a margin perspective?

Speaker #9: That's really helpful. Thank you. It would also seem that, you know, if we take a step back and look at the objectives of your CPG partners, now would be a very good time to continue to partner.

Speaker 7: That's really helpful. Thank you. It would also seem that, you know, if we take a step back and look at the objectives of your CPG partners, now would be a very good time to continue to partner because they're really focused on driving volume as well. As we look ahead through the year, you know, presumably you have a series of these types of partnerships lined up to continue to support from a margin perspective?

Speaker #9: Because they're really focused on driving volume as well. So, as we look ahead through the year, you know, presumably you have a series of these types of partnerships lined up to continue to support from a margin perspective?

Speaker #7: Yeah, I think thanks, Irene, again. Absolutely. Our relationships and our partnerships with our vendors are extremely strong. I think we're aligned in what we're looking to achieve.

Alex Miller: Thanks, Irene, again. Absolutely. Our relationships and our partnerships with our vendors, you know, are extremely strong. I think we're aligned in what we're looking to achieve. They're looking to grow units and grow sales as well. I think I've talked in previous Qs about our use of data, our ability to gather data. I just referenced our new customer data platform. That data is extraordinarily valuable to us. It allows us to direct promotions at specific customers, promotions that resonate with consumers. That's part of the 90 basis point improvement you see in our US margin merch performance. Yes, our vendors are leaning in with us. They love our digital platforms. They love our scale. They love our operational focus and our ability to execute.

Alex Miller: Yeah, I think, thanks, Irene, again. Absolutely. Our relationships and our partnerships with our vendors are extremely strong. I think we're aligned in what we're looking to achieve, and they're looking to grow units and grow sales as well. I think I've talked in previous quarters about our use of data, our ability to gather data. I just referenced our new customer data platform. That data is extraordinarily valuable to us, and it allows us to direct promotions at specific customers and promotions that resonate with consumers. That's part of the 90 bps improvement you see in our U.S. margin merch performance. Yes, our vendors are leaning in with us. They love our digital platforms. They love our scale. They love our operational focus and our ability to execute. When we say we're going to do something, we do it.

Speaker #7: And they're looking to grow units and grow sales as well. I think I've talked in previous quarters about our use of data, our ability to gather data, I just referenced our new customer data platform.

Speaker #7: That data is extraordinarily valuable to us and it allows us to direct promotions at specific customers and promotions that resonate with consumers. That's part of the 90-bit basis point improvement you see in our US margin merch performance.

Speaker #7: So yes, our vendors are leaning in with us. They love our digital platforms. They love our scale. They love our operational focus and our ability to execute when we say we're going to do something, we do it.

Alex Miller: When we say we're going to do something, we do it. We are leaning in with them both, really across all of our geographies. Tying that into our food focus and our food bundles really resonates, specifically with our vendor partners, our beverage vendor partners.

Speaker #7: And we are leaning in with them both really across all of our geographies, tying that into our food focus and our food bundles, which really resonates specifically with our vendor partners.

Alex Miller: We are leaning in with them really across all of our geographies, and tying that into our food focus and our food bundles really resonates specifically with our vendor partners, our beverage vendor partners.

Speaker #7: Our beverage vendor partners.

Speaker #9: That's great. Thank you, and best of luck.

Operator: That's great. Thank you, and best of luck.

Irene Nattel: That's great. Thank you, and best of luck.

Speaker 7: That's great. Thank you and best of luck.

Speaker #7: Thank you.

Alex Miller: Thank you.

Speaker #2: Your next question comes from Michael Van Eyst with TD Cowen. Your line is now open.

Operator: Your next question comes from Michael Van Aelst with TD Cowen. Your line is now open.

Joelle: Your next question comes from Michael Van Eyst with TD Cowen. Your line is now open.

Speaker #8: Yes, hi. Can you just start off, please, by elaborating a little bit about the pressures you're seeing in the southern border states and what the key drivers of those demand pressures are?

Michael Van Aelst: Yes, hi. Can you just start off, please, by elaborating a little bit about the pressures you're seeing in the southern border states and what the key drivers of those demand pressures are?

Speaker 8: Yes, hi. Can you just start off, please, by elaborating a little bit about the pressures you're seeing in the southern border states and what the key drivers of those demand pressures are?

Alex Miller: You know, I'm not gonna hypothesize on what's driving that. We're just seeing reduced traffic specifically in our southern border states. We're seeing it's greater in fuel than it is in merch, but we're seeing reduced traffic in fuel and in merch, and our industry ride data suggests that we are not alone in that reduced traffic. For us, it's all about taking share. It's about winning the customer. That focus never changes for us. We believe this to be temporary. We're very pleased with our large positions in those three states. Those have obviously been large growth states over the previous years. We believe that trend will ultimately continue.

Speaker #7: You know.

Speaker #9: I'm not going to hypothesize on what's driving that. We're just seeing reduced traffic. Specifically, in our southern border states, we're seeing it's greater in fuel than it is in merchandise.

Alex Miller: I'm not going to hypothesize on what's driving that. We're just seeing reduced traffic, specifically in our southern border states. We're seeing it's greater in fuel than it is in merchandise, but we're seeing reduced traffic in fuel and in merchandise, and our industry ride data suggests that we are not alone in that reduced traffic. For us, it's all about taking share. It's about winning the customer. That focus never changes for us. We believe this to be temporary. We're very pleased with our large positions in those three states, and those have obviously been the large growth states over the previous years. We believe that trend will ultimately continue. We're just focused on our customers, our execution, and widening the gap.

Speaker #9: But we're seeing reduced traffic in fuel and in merchandise, and our industry-wide data suggests that we are not alone in that reduced traffic. But for us, it's all about taking share.

Speaker #9: It's about winning the customer. That focus never changes for us. So and we believe this to be temporary. We're very pleased with our large positions in those three states.

Speaker #9: And those have obviously been large growth states over the previous years. We believe that trend will ultimately continue. So we're just focused on our customers, our execution, and widening the gap.

Alex Miller: We're just focused on our customers, our execution, and widening the gap.

Speaker #8: All right, thank you. And so turning to the Canadian same-store sales growth, you talk about it being lifted by the alcohol sales in Ontario.

Michael Van Aelst: All right, thank you. Turning to the Canadian same store sales growth, you talked about it being lifted by the alcohol sales in Ontario. I guess now that we're coming up on lapping the new regulations, I'm wondering if you're expecting to see the momentum continue. Are you seeing the basket in, you know, steadily increase as people add more items when they come in for the alcohol? You know, any other observations you might see to give us a feeling that or give us some kind of comfort that Canadian same store sales can continue to grow.

Speaker 8: All right, thank you. Turning to the Canadian same-store sales growth, you talked about it being lifted by the alcohol sales in Ontario. I guess now that we're coming up on lapping the new regulations, I'm wondering if you're expecting to see the momentum continue. Are you seeing the basket steadily increase as people add more items when they come in for the alcohol? Any other observations you might see to give us a feeling that, or give us some kind of comfort that Canadian same-store sales can continue to grow?

Speaker #8: But I guess now that we're coming up on lapping the new regulations, I'm wondering if you're expecting to see the momentum continue? Are you seeing the basket steadily increase as people add more items when they come in for that alcohol? And are there any other observations you might share to give us a feeling, or provide some kind of comfort, that Canadian same-store sales can continue to grow?

Speaker #7: Yeah, we do lap that. Actually, this month, we lapped the launch of alcohol in Central Canada, specifically in Ontario. We also lapped the removal of Zonic, or white nicotine, from our stores across Canada, which has been a fairly significant headwind.

Alex Miller: Yeah, we do lap that actually this month, the launch of alcohol in central Canada in Ontario. We also lapped the removal of Zonnic or white nicotine from our stores in Canada, across Canada, which has been a really fairly significant headwind. I think I commented, you know, a few quarters ago of just the execution of our central Canadian business and how we were so much on our front foot in executing once alcohol became available. We were first out of the gates. We captured significant share, and we've continued to capture share. You heard me reference that we grew wine by greater than 100% and liquor by a similar amount. We've continued to grow those categories and to increase the basket with related to those categories.

Alex Miller: Yeah, we do lap that actually this month, the launch of alcohol in central Canada, in Ontario. We also lapped the removal of Zyn or white nicotine from our stores in Canada, across Canada, which has been a really fairly significant headwind. I think I commented, you know, a few quarters ago on just the execution of our central Canadian business and how we were so much on our front foot in executing once alcohol became available. We were first out of the gates. We captured significant share, and we've continued to capture share. You heard me reference that we grew wine by greater than 100% and liquor by a similar amount. We've continued to grow those categories and to increase the basket related to those categories.

Speaker #7: I think I commented a few quarters ago of just the execution of our central Canadian business and how we were so much on our front foot in executing once alcohol became available.

Speaker #7: We were first out of the gates; we captured significant share and we continued to capture share. You heard me reference that we grew wine by greater than 100% and liquor by a similar amount.

Speaker #7: So we've continued to grow those categories. And to increase the basket with related to those categories. I think our teams in central Canada are still they're still looking at data, still under understanding adjacencies and what mix to put in.

Alex Miller: I think our teams in central Canada are still looking at data, still understanding adjacencies and what mix to put in with these alcohol sales, but we're continuing to drive.

Alex Miller: I think our teams in central Canada are still, they're still looking at data, still understanding adjacencies and what mix to put in with these alcohol sales. We're continuing to drive basket, and we remain very positive on continued growth, traffic growth, and sales within our new alcohol categories in Ontario.

Speaker #7: With these alcohol sales, but we're continuing to drive

Speaker #1: Basket, and we remain very positive on continued growth, traffic growth, and sales within our new alcohol categories in Ontario.

Joelle: We remain very positive on continued growth, traffic growth, and sales within our new alcohol categories in Ontario.

Speaker #2: Excellent, thank you.

Michael Van Aelst: Excellent. Thank you.

Speaker 2: Excellent. Thank you.

Speaker #3: Your next question comes from Vishal Shridhar with National Bank. Your line is now open.

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

Speaker 3: Your next question comes from Vishal Shridhar with National Bank. Your line is now open.

Speaker #4: Hi, thanks for taking my questions. I was just hoping to get your perspective on the acquisition backdrop and how you see that evolving in terms of prices.

Vishal Shreedhar: Hi. Thanks for taking my questions. I was just hoping to get your perspective on the acquisition backdrop and how you see that evolving in terms of prices, and also types of files that you're interested in, be it adjacent to retail opportunities such as travel retail or QSR or dollar store, et cetera.

Mathieu Brunet: Hi. Thanks for taking my questions. I was just hoping to get your perspective on the acquisition backdrop and how you see that evolving in terms of prices and also types of files that you're interested in, be it adjacent to retail opportunities such as travel retail or QSR or Dollar Store, etc.

Speaker #4: And also, types of files that you're interested in, be it adjacent to retail opportunities such as travel retail, or QSR, or dollar store, etc.

Speaker #5: Hey, thanks for, thanks for the question. yeah, as, as we mentioned, you know, in the Q4, you know, we've, this, challenging environment, very definitely, you know, actors, players that, that are, you know, struggling.

Alex Miller: Hey, thanks for the question. Yeah, as we mentioned, you know, in the previous call, you know, with this challenging environment, there is definitely, you know, actors, players that are, you know, struggling. We have seen this pipeline, you know, quite rich actually, to be honest, across the geography we are. As we mentioned, we'll continue to be one of the players that will be consolidating this, you know, this market. Priority for us is to continue to consolidate, of course, North America. That's our priority number one. We are very pleased also about what we see, you know, in Europe and our ability to integrate, and we are very pleased by TotalEnergies Energy.

Filipe Da Silva: Hey, thanks for the question. Yeah, as we mentioned, you know, in the previous call, you know, with this challenging environment, there is definitely, you know, actors, players that are, you know, struggling. We have seen this pipeline, you know, quite rich actually, to be honest, across the geography we are. As we mentioned, we'll continue to be one of the players that will be consolidating this, you know, this market. Priority for us is to continue to consolidate, of course, North America. That's our priority number one. We are very pleased also about what we see, you know, in Europe and our ability to integrate, and we are very pleased by TotalEnergies Energy.

Alex Miller: Hey. Thanks for the question. As we mentioned in the previous call, in this challenging environment, there are definitely actors, players that are struggling. We have seen this pipeline quite rich, actually, to be honest, across the geography we are. As we mentioned, we'll continue to be one of the players that will be consolidating this market. Priority for us is to continue to consolidate, of course, North America. That's our priority number one. We are very pleased also about what we see in Europe and our ability to integrate. We are very pleased by TotalEnergies, and we believe that we can continue to expand in Europe with the right opportunities. That would be, I would say, the two main priorities for us. We know that with our financial playbook, we can have very strong returns. That's definitely where we focus our priorities.

Speaker #5: And, and, and we have seen this, pipeline, you know, quite, quite rich, actually, to be honest, across the geography we are. And, and as we mentioned, we'll, we'll, continue to, to be one of the players that will be consolidating this, you know, this market.

Speaker #5: priority for us is to continue to, to consolidate, of course, North America. That's our priority number one. We are very pleased also, but what we see, you know, in Europe, and our, our ability to integrate and, we are very pleased by total, total energy.

Speaker #5: And, and we believe that, yeah, we, we, we can continue to, to expand in Europe with, the, the right opportunities. So that, that would be, I would say that the, the two main priorities for us, and, and we know that there, with our, you know, financial playbook, we, we can have, a very strong returns.

Alex Miller: We believe that, yeah, we can continue to expand in Europe with the right opportunity. That would be, I would say, the two main priorities for us. We know that there, with our, you know, financial playbook, we can have very strong returns. That's definitely where we focus our priorities. You know, to your point on the adjacent retail, I think for us today the priority is, you know, it's, it's convenience. It's where we are good at. We have been acquiring a lot there, and we see that there is opportunity. You know, again, this challenging environment, it's an opportunity actually for us. We have a strong balance sheet.

Filipe Da Silva: We believe that, yeah, we can continue to expand in Europe with the right opportunity. That would be, I would say, the two main priorities for us. We know that there, with our, you know, financial playbook, we can have very strong returns. That's definitely where we focus our priorities. You know, to your point on the adjacent retail, I think for us today the priority is, you know, it's, it's convenience. It's where we are good at. We have been acquiring a lot there, and we see that there is opportunity. You know, again, this challenging environment, it's an opportunity actually for us. We have a strong balance sheet.

Speaker #5: So that's definitely where we focus our priorities. and, you know, to your point on the, on the adjacent, adjacent, adjacent retails, I think for us today, the priority is, is, you know, it's, it's, it's convenience.

Alex Miller: To your point on the adjacent retails, I think for us today, the priority is convenience. It's where we are good at. We have been acquiring a lot there, and we see that there is opportunity. Again, this challenging environment is an opportunity, actually, for us. We have a strong balance sheet. We see a much better momentum for us. We're very encouraged by that. With that, any opportunity that will come, we will be there.

Speaker #5: It's where we are good at, we have been acquiring a lot there, and, and we see that there is opportunity, you know, this, again, this challenging environment, it's, it's an opportunity, actually, for us.

Speaker #5: We have a strong balance sheet. We see much better momentum for us, so we're very encouraged by that. And with that, any opportunity that will come, we will be there.

Alex Miller: We see a much better momentum for us, so we're very encouraged by that. With that, any opportunity that will come, we will be there.

Filipe Da Silva: We see a much better momentum for us, so we're very encouraged by that. With that, any opportunity that will come, we will be there.

Speaker #1: Okay, sorry. So just to reiterate, the management is focused on adjacent retail opportunities in addition to the traditional convenience store opportunities. That's the correct characterization?

Vishal Shreedhar: Okay, sorry. Just to reiterate, the management is focused on adjacent retail opportunities in addition to the traditional C-store opportunities. That's correct characterization?

Mathieu Brunet: Okay. Sorry. Just to reiterate, the management is focused on adjacent retail opportunities in addition to the traditional C-store opportunities. That's correct characterization?

Speaker #5: Yeah, but I think, I think our first priority, it's, it's convenience. Let's be, let's be clear. You know,

Alex Miller: Yeah. I think our first priority, it's convenience. Let's be clear.

Filipe Da Silva: Yeah. I think our first priority, it's convenience. Let's be clear.

Alex Miller: Yeah, I think our first priority is convenience. Let's be clear.

Speaker #1: Okay.

Speaker #5: adjacent what we have said is that that's something that will, we could think about, but, but today, given the, you know, the momentum, again, the, the, the, the, the fact that the, the, it's a very challenging environment, you know, we believe that there is a, a, a good opportunity, a good lingo, actually, to, to, to consolidate market share.

Vishal Shreedhar: Okay.

Alex Miller: You know? Adjacent, what we have said is that that's something that we could think about, today, given the, you know, the momentum, again, the fact that it's a very challenging environment, you know, we believe that there is a good opportunity, a good window actually to.

Filipe Da Silva: You know? Adjacent, what we have said is that that's something that we could think about, today, given the, you know, the momentum, again, the fact that it's a very challenging environment, you know, we believe that there is a good opportunity, a good window actually to.

Mathieu Brunet: Okay. Understood.

Alex Miller: What we have said is that that's something that we could think about. Today, given the momentum, again, the fact that it's a very challenging environment, we believe that there is a good opportunity, a good window, actually, to consolidate market share and consolidate particularly the North American market. That's our primary focus.

Speaker #5: And, consolidate the particularly the North American market. So, so that's our, our primary focus.

Filipe Da Silva: To consolidate market share and consolidate particularly the North American market. That's our primary focus.

Speaker #1: Okay. And with respect to SG&A, trends on the organic basis, do you expect that rates of, of SG&A growth to, to maintain? I'm talking with your adjusted organic SG&A growth.

Vishal Shreedhar: Okay. With respect to SG&A trends on the organic basis, do you expect that rate of SG&A growth to maintain? I'm talking the pure adjusted organic SG&A growth.

Mathieu Brunet: Okay. With respect to SG&A trends on the organic basis, do you expect that rate of SG&A growth to maintain? I'm talking about your adjusted organic SG&A growth.

Speaker #5: Yeah. Definitely, we, and here we are very pleased by, you know, the, the, the teams are, are doing an amazing job here because, you know, as we mentioned, a few times now, we, we are, we are investing, you know, on, on the technology.

Filipe Da Silva: Yeah. Definitely, here we are very pleased by, you know, the teams are doing an amazing job here because, you know, as we mentioned a few times now, we are investing, you know, on the technology. We know that we need to go to deliver a much better digital, you know, experience to our customers, a more digital experience to our associating stores, our employees in stores. Those investment we're able to, you know, more than offset it through the Fit to Serve program with the discipline that, you know, Alimentation Couche-Tard has, you know, has built this successful story over the last four decades.

Alex Miller: Yeah. Definitely. We are very pleased by, you know, the teams are doing an amazing job here because, you know, as we mentioned a few times now, we are investing, you know, on the technology. We know that we need to deliver a much better digital, you know, experience to our customers, a more digital experience to our associates in stores and employees in stores. For those investments, we are able to, you know, more than offset it through the Fit-to-Serve program with the discipline that, you know, Alimentation Couche-Tard Inc. has, you know, has built this successful story over the last four decades. We are confident that we'll be able to continue to deliver that, you know, on looking forward and for this year.

Speaker #5: We know that we need to deliver a much better digital experience to our customers, as well as a more digital experience for our associating stores and employees in stores.

Speaker #5: and, and so those investments we are able to, to, you know, more of an offset it, through, the fit, fit to sell program with the discipline that, you know, QSTAR has, has, you know, has built, this, this successful, story over the last, four decades.

Speaker #5: And, and we are, we are confident that we'll be able to, to continue to deliver the, deliver that, you know, on, on, on, on, on looking forward and, and for this year.

Filipe Da Silva: We are confident that we'll be able to continue deliver that, you know, on looking forward and for this year. A lot of initiatives are going on at store level, at global functional level, just to making sure that, yeah, we can continue to deliver this performance in OPEX.

Speaker #5: a lot of initiatives, going on at store level, at the global function level, just to making sure that, yeah, we, we can continue to, to deliver this, this performance in, in OPEX.

Alex Miller: A lot of initiatives going on at store level, at the global functional level, just to making sure that, yeah, we can continue to deliver this performance in OPEX.

Speaker #1: Thank you.

Vishal Shreedhar: Thank you.

Mathieu Brunet: Thank you.

Speaker #3: Your Your next question comes from Mark Petrie with CIBC. Your line is now open.

Speaker 3: Your next question comes from Mark Petrie with CIBC. Your line is now open.

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

Speaker #2: Yeah, thanks. Good morning. Alex, you've highlighted a few different pressures that the industry is under, and I guess to summarize briefly, maybe it's fair to say that cost inflation continues to exceed sales growth overall, at least for the industry.

Mark Petrie: Thanks. Good morning. Alex, you've highlighted a few different pressures that the industry is under. I guess to summarize briefly, maybe it's, you know, it's fair to say that cost inflation continues to exceed sales growth, you know, overall, at least for the industry. In the past, you've highlighted dynamics on industry fuel margins, where they're supported by challenged profits in the lowest quartile operators. At the same time, OPEX margins have been in the thirties, I guess, the last three quarters or so. I'm just curious to hear your latest thinking on these dynamics. Do you think those dynamics are holding as strong as they have historically? How do you think the profitability in the lowest quartile operators has changed over the last year?

Philippe Da Silva: Yeah. Thanks. Good morning. Alex, you've highlighted a few different pressures that the industry is under. I guess to summarize briefly, maybe it's fair to say that cost inflation continues to exceed sales growth, you know, overall, at least for the industry. In the past, you've highlighted dynamics on industry fuel margins where they're supported by challenged profits in the lowest quartile operators. At the same time, OPEX margins have been in the 30% range, I guess, the last three quarters or so. I'm just curious to hear your latest thinking on these dynamics. Do you think those dynamics are holding as strong as they have historically? How do you think the profitability in the lowest quartile operators has changed over the last year?

Speaker #2: In the past, you've highlighted dynamics on industry fuel margins where they're supported by challenged profits and the lowest quartile operators. At the same time, OPEX margins have been in the 30s, I guess for the last three quarters or so.

Speaker #2: So I'm just curious to hear your latest thinking on these dynamics. do you think those dynamics are holding as strong as they have historically?

Speaker #2: And how do you think the profitability in the lowest quartile operators has changed over the last year?

Speaker #5: Yeah, I think, obviously, we've seen other retailers kind of suggest some increased competition, as well as we saw in some geographies this period.

Alex Miller: Yeah, I think. Obviously, I think we've seen other retailers kinda suggest some increased competition as well as we saw in some geographies this period. Absolutely believe that that will be transitory. Again, the cost and the investment levels, the regulatory cost, those are real. Those, those are not changing. And again, our balance sheet and our financial strength, we believe positions us very well, and we believe that that fuel margin needs to be there. I think this environment or this temporary, you know, certainly these are not bad fuel margins, but let's call it a plateauing of fuel margins for a couple, three quarters. It, without question, puts these single operators under greater pressure.

Joelle: I think, obviously, we've seen other retailers kind of suggest some increased competition as well as we saw in some geographies this period. Absolutely believe that that will be transitory. The cost and the investment levels, the regulatory cost, those are real. Those are not changing. Our balance sheet and our financial strength, we believe, positions us very well. We believe that that fuel margin needs to be there. I think this environment or this temporary, you know, certainly, these are not bad fuel margins, but let's call it a plateauing of fuel margins for a couple, three quarters. It, without question, puts these single operators under greater pressure. As you look at industry data, and you know, we believe there's a widening of the gap of the top performers and the bottom performers.

Speaker #5: I absolutely believe that this will be transitory. Again, the costs and the investment levels, as well as the regulatory costs, those are real. Those are not changing.

Speaker #5: and, and again, our balance sheet and, and our financial strength, we believe positions us very well and we believe that that fuel margin, needs to be there.

Speaker #5: I think, this environment or this temporary, you know, certainly these are not bad fuel margins, but let's call it a, a plateauing of fuel margins for a couple, three quarters.

Speaker #5: it, without questions, puts these single operators under greater pressure. you know, as you look at industry data, and, and, you know, we believe there's a widening of the gap of the top performers and the bottom performers.

Alex Miller: You know, as you look at industry data and, you know, we believe there's a widening of the gap of the top performers and the bottom performers. We are pleased with our widening of the gap against these industry metrics that we stay very focused on, day on day, week on week. You know, we continue to believe that the pressure on these individual operators and these smaller retailers is intensifying. I think as Philippe referenced, we believe there is a place for us to continue to consolidate these markets. We are, we remain very focused on North America and are increasingly confident in our capabilities in Europe, and very pleased with our TotalEnergies acquisition and the progress of those four BUs that are well ahead of our investment model.

Speaker #5: we are pleased with our widening of the gap against these, industry metrics that we stay very focused on, day on day, week on week.

Joelle: We are pleased with our widening of the gap against these industry metrics that we stay very focused on, day on day, week on week. We continue to believe that the pressure on these individual operators and these smaller retailers is intensifying. I think, as Philippe Da Silva referenced, we believe there is a place for us to continue to consolidate these markets. We remain very focused on North America and are increasingly confident in our capabilities in Europe and very pleased with our TotalEnergies acquisition and the progress of those four BUs that are well ahead of our investment model. We believe that will ultimately give us opportunity, and the fuel margin will be there.

Speaker #5: So, you know, we continue to believe that the pressure on these individual operators and smaller retailers is intensifying. I think Felipe referenced that we believe there is a place for us to continue to consolidate these markets.

Speaker #5: We are, we remain very focused on North America and are increasingly confident in our capabilities in Europe. and, very pleased with our total acquisition and the progress of those four BUs that are well ahead of, of our investment model.

Speaker #5: so we believe that will ultimately give us opportunity, and that fuel margin will be there.

Alex Miller: We believe that will ultimately give us opportunity, and the fuel margin will be there.

Speaker #2: Okay. I appreciate that comment. Just to follow up, I know you've touched on it a couple of times, but I just want to be clear and make sure I understand.

Mark Petrie: Okay. Appreciate that comment. Just to follow up, I know you've touched on it a couple times, but I just wanna be clear, make sure I understand. With regards to the European fuel margins, can you just walk through the dynamics that led to the strong result this quarter? How should we think about that number sort of going forward, you know, more like Q1 or more like sort of previous quarters?

Philippe Da Silva: Okay. Appreciate that comment. Just to follow up, I know you've touched on it a couple of times, but I just want to be clear, make sure I understand. With regards to the European fuel margins, can you just walk through the dynamics that led to the strong result this quarter? How should we think about that number going forward, you know, more like Q1 or more like previous quarters?

Speaker #2: With regards to the European fuel margins, can you just walk through the dynamics that led to the strong result this quarter? And then how should we think about that number—sort of going forward, you know, more like Q1 or more like sort of previous quarters?

Speaker #5: I, I think, I think the day I can predict fuel margins is a day I'll probably never find, to be, to be highly candid with you.

Alex Miller: I think the day I can predict fuel margins is a day I'll probably never find to be highly candid with you. I think, you know, I'll just focus on the strength of our European business. If you look, you know, not just at this quarter, if you look at many quarters in a row, we just continue to perform. We are taking market share in merch. We are growing food. We are growing our loyalty platforms. We referenced, you know, I referenced in my comments that, you know, we had 1 million charging transactions this quarter, and it grew 50%. What I didn't reference is that consumers rate our app really top of the line. We have passed Tesla in Sweden, as an example.

Joelle: I think the day I can predict fuel margins is a day I'll probably never find, to be highly candid with you. I think I'll just focus on the strength of our European business. If you look, not just at this quarter, if you look at many quarters in a row, we just continue to perform. We are taking market share in merchandise. We are growing food. We are growing our loyalty platforms. I referenced in my comments that we had 1 million charging transactions this quarter, and it grew 50%. What I didn't reference is that consumers rate our app really top of the line. We have passed Tesla in Sweden as an example. Our utilization of chargers per charger is well ahead of the industry standard. Those charge customers, they come into our stores at a rate of one-third times greater than our traditional food customers.

Speaker #5: I think, you know, I'll just focus on the strength of our European businesses. If you look, you know, not just at this quarter, if you look at many quarters in a row, we just continue to perform.

Speaker #5: we are taking market share and merch. We are growing food. We are growing our loyalty platforms. we referenced, you know, I referenced in my, in my comments that, you know, we had 1 million charging transactions this quarter, and it grew 50%.

Speaker #5: What I didn't reference is that consumers rate our app really top of the line. we have passed Tesla, in Sweden as an example. our utilization of chargers per charger is well ahead of the industry standard.

Alex Miller: Our utilization of chargers per charger is well ahead of the industry standard. Those charge customers are, they come into our stores at a rate of one-third times greater than our traditional food customers. The basket is higher. They buy more car washes from us. Our strength and our world-class EV team is driving merch traffic in, and it's also driving our liquid fuel demand. We have positive same-store volume liquid fuel in two of the three of our Scandinavian countries fiscal year to date. That's a pretty amazing number. We are taking share. We are, across merch and across fuel, we are delivering EBITDA growth. While we're realizing these fuel margins, we are handily outperforming the industry in fuel volume. I think that bodes well for us as we go forward in Europe.

Speaker #5: those charge customers are, they come into our stores at a rate of one-third times greater than our traditional food customers. the basket is higher.

Speaker #5: They buy more car washes from us. Our strength in our world-class EV team is driving merch traffic in, and it's also driving our liquid fuel demand.

Joelle: The basket is higher. They buy more car washes from us. Our strength in our world-class EV team is driving merchandise traffic in, and it's also driving our liquid fuel demand. We have positive same-store volume liquid fuel in two of the three of our Scandinavian countries fiscal year to date. That's a pretty amazing number. We are taking share across merchandise and across fuel. We are delivering EBITDA growth. While we're realizing these fuel margins, we are handily outperforming the industry in fuel volume. I think that bodes well for us as we go forward in Europe. I really just could not be more complimentary of our teams and the strength of our teams over in Europe.

Speaker #5: we have positive same-store volume liquid fuel in two of the three of our Scandinavian countries, fiscal year to date. That's a pretty amazing number.

Speaker #5: So we are taking share, we are, across merch and across fuel, we are delivering EBITDA growth, and while we're realizing these fuel margins, we are handily outperforming the industry in fuel volume.

Speaker #5: I think that bodes well for us, as we go forward in Europe and I really just could not be more complimentary of our teams and the strength of our teams over in Europe.

Alex Miller: I really just could not be more complimentary of our teams, and the strength of our teams over in Europe.

Speaker #2: And, and just to add on to Alexa, you know, just sorry, just to compliment Alex on, on, on your question on the, on the, on the CPL and, I, I think, s-something that you, you should expect at least to, you know, for the next, couple of, following quarters is, is, you know, the, the, the renegotiation that, we, we did, in, in Germany, you know, on, on, on our fuel contract.

Filipe Da Silva: Just to compliment Alex.

Alex Miller: To complement Alex on your question on the CPL, I think something that you should expect at least for the next couple of following quarters is the renegotiation that we did in Germany on our fuel contract. That's something that is helping us and driving a better margin there. One thing also that is definitely making a difference is our trading activity. Our integrated supply chain in Europe is making a difference there as well. Of course, I agree with Alex. That's definitely a challenge to forecast fuel margin. You should see some good momentum in Europe for the next coming at least two, three quarters.

Filipe Da Silva: Just to compliment Alex.

Alex Miller: Appreciate it.

Filipe Da Silva: You know...

Alex Miller: Yeah.

Filipe Da Silva: Sorry, just to compliment Alex on your question on the CPL. I think something that you should expect at least, you know, for the next couple of falling quarters is, you know, the renegotiation that we did in Germany, you know, on the fuel contract. That's something that, you know, it's helping us and driving, you know, a better margin there. One thing also that it's definitely making a difference is, you know, our trading activity, you know, our supply chain, integrated supply chain in Europe is making a difference there as well also.

Speaker #2: And, and that's something that, you know, it's helping us and driving, you know, a better margin there. and one, one thing also that, it's definitely making a difference is, you know, our trading activity, the, you know, our supply chain integrity supply chain in Europe is making a difference there as well.

Speaker #2: So, of course, I agree with Alex; that's definitely a challenge to forecast fuel margin. But, yeah, you should see some good momentum in Europe for the next coming, at least, two to three quarters.

Filipe Da Silva: Of course, I agree with Alex, that's definitely a challenge to forecast, you know, fuel margin. Yeah, you should see some good momentum in Europe for the next coming at least two, three quarters. You, you predicted my follow-up question, Filipe. Well done. Thanks to both of you for all your comments. Bye-bye.

Speaker #2: You, you predicted my follow-up question, Felipe. Well done. And thanks to both of you for all your comments. Bye-bye.

Philippe Da Silva: You predicted my follow-up question, Philippe. Nicely done. Thanks to both of you for all your comments.

Speaker #5: Thanks.

Alex Miller: Thanks.

Joelle: Thanks.

Speaker #3: We request that our callers limit their questions to one main question. Your next question comes from John Zampero with Scotiabank. Your line is now open.

Operator: We request that our callers limit their questions to one main question. Your next question comes from John Zamparo with Scotiabank. Your line is now open.

Speaker 3: We request that our callers limit their questions to one main question. Your next question comes from John Zampero with Scotiabank. Your line is now open.

Speaker #6: Thank you very much. Good morning. I'd like to better understand the dynamic around the meal deals, both on traffic and same-store sales, and I guess margins as well.

John Zamparo: Thank you very much. Good morning. I'd like to better understand the dynamic around the meal deals, both on traffic and same-store sales, and I guess margins as well. You're posting, I think you'd said around a 40% increase in meal deals in the US. You've made progress on the comp. It sounds like you're aspiring for even higher. Is it that customers are trading off from other items, or is the price investment meaningful enough that it offsets the additional volume? Just would like to better understand this. Is this ultimately going to be the biggest driver for the US comp moving forward?

Speaker 7: Thank you very much. Good morning. I'd like to better understand the dynamic around the meal deal promotions, both on traffic and same-store sales and, I guess, margins as well. You're posting, I think you'd said, around a 40% increase in meal deal promotions in the U.S. You've made progress on the comp, but it sounds like you're aspiring for even higher. Is it that customers are trading off from other items, or is the price investment meaningful enough that it offsets the additional volume? I just would like to better understand this. Is this ultimately going to be the biggest driver for the U.S. comp moving forward?

Speaker #6: You're posting, I think you'd said around a 40% increase in meal deals in the U.S., and you've made progress on the comp, but it sounds like you're aspiring for even higher.

Speaker #6: So, is it that customers are trading off from other items, or is the price investment meaningful enough that it offsets the additional volume? I just would like to better understand this. And is this ultimately going to be the biggest driver for the U.S. comp moving forward?

Speaker #5: Yeah, I think, you know, for food, for us, we're pleased with our progress. We believe we have an exceptionally long runway. Our food conversion in the United States is about 11% now.

Alex Miller: Yeah. I think, you know, for food for us, we're pleased with our progress. We believe we have an exceptionally long runway. Our food conversion in the United States is about 11% now. Our best Business Units in the US are 20% or greater than 20%. We crossed over 24% food conversion in Europe this quarter. That's the highest it's ever been. You know, consumers are looking for value, full stop. That's just apparent as you read retail results and listen to consumers and watch their behavior. With the meal bundles, we have found a means to really show value in our channel. We are not compromising margin. As I referenced, our vendor partners are engaged. They are supporting us.

Joelle: Yeah. I think, you know, for food, we're pleased with our progress. We believe we have an exceptionally long runway. Our food conversion in the U.S. is about 11% now. Our best business units in the U.S. are 20% or greater than 20%. We crossed over 24% food conversion in Europe this quarter. That's the highest it's ever been. You know, consumers are looking for value. Full stop. That's just apparent as you read retail results and listen to consumers and watch their behavior. With the meal bundles, we have found a means to really show value in our channel. We are not compromising margin. As I referenced, our vendor partners are engaged. They are supporting us. They are coming with offers, with significant support in bundling their products with our food products. We will continue to grow, expand those offers. We fundamentally believe it will be margin accretive.

Speaker #5: Our best business units in the U.S. are at or greater than 20%. We crossed over 24% food conversion in Europe this quarter, which is the highest it's ever been.

Speaker #5: you know, consumers are looking for value. Full stop. that's, that's just apparent as you read, retail results and, and, and listen to consumers and watch their behavior.

Speaker #5: with the meal bundles, we have found a means to really show value in our channel. we are not compromising margin. as I referenced, our vendor partners are engaged.

Speaker #5: they are supporting us. They are coming. with, offers, with significant support in bundling their products with our food products. and, we will continue to, to grow, expand those offers.

Alex Miller: They are coming with offers with significant support in bundling their products with our food products. We will continue to grow, expand those offers. We will fundamentally believe it will be margin accretive. Again, we grew meal bundles by 40% in the quarter, and we improved food margin by almost 500 basis points in the quarter. I think that shows or kinda underpins what I'm saying, that as we grow food bundles, we can still support and grow food margin.

Speaker #5: And we will, fundamentally, believe it will be margin accretive. Again, we grew meal bundles by 40% in the quarter, and we improved food margin by almost 500 basis points in the quarter.

Joelle: We grew meal bundles by 40% in the quarter, and we improved food margin by almost 500 basis points in the quarter. I think that shows or kind of underpins what I'm saying, that as we grow food bundles, we can still support and grow food margin.

Speaker #5: So I think that shows, or kind of underpins what I'm saying, that as we grow food bundles, we can still support and grow food margin.

Speaker #6: Thanks very much. I'll pass it on.

John Zamparo: Thank you very much. I'll pass it on.

Speaker 7: Thank you very much. I'll pass it on.

Speaker #3: Your next question comes from Martin Lander with Steeple. Your line is now open.

Speaker 3: Your next question comes from Martin Lander with Stifel. Your line is now open.

Operator: Your next question comes from Martin Landry with Stifel. Your line is now open.

Speaker #7: Hi, good morning. I, I, you announced a new collaboration with Guy Fieri, this morning. I, would like to know, what does success looks like for that collaboration?

Martin Landry: Hi, good morning. You announced a new collaboration with Guy Fieri this morning. I would like to know what does success looks like for that collaboration? Is that collaboration temporary? Then why did you choose those 10 states? Are those states locations where you have a lower food penetration? Just a little bit of color as to that new collaboration would be helpful. Thank you.

Philippe Da Silva: Hi. Good morning. I announced a new collaboration with Guy Fieri this morning. I would like to know what the success looks like for that collaboration. Is that collaboration temporary? Why did you choose those 10 states or those states' locations where you have a lower food penetration? Just a little bit of color as to that new collaboration would be helpful. Thank you.

Speaker #7: Is that collaboration temporary? And, why did you choose those 10 states or those locations where you have a lower food penetration? Just a little bit of color as to that new collaboration would be helpful.

Speaker #7: Thank you.

Speaker #5: Yeah, thanks for the question. I think we are just super excited to be able to partner, with Guy Fieri. and, you know, access his energy and, and his social media presence and, and his resonance with consumers.

Alex Miller: Yeah, thanks for the question. I think we are just super excited to be able to partner with Guy Fieri, and, you know, access his energy and his social media presence and his resonance with consumers. And we feel like we're ready. We, we paused a little bit. I think as I've talked to you, we needed to reset, we needed to come back, we needed to get our operational execution to a level that we felt like, Hey, when we, when we launch this differentiating program, we're ready. And we feel we've reached that time. It is a unique relationship. It is an exclusive relationship. It is not a short-term relationship. And we fully plan to launch it across our US portfolio.

Joelle: Yeah. Thanks for the question. I think we are just super excited to be able to partner with Guy Fieri and, you know, access his energy and his social media presence and his resonance with consumers. We feel like we're ready. We paused a little bit. I think as I've talked to you, we needed to reset. We needed to come back. We needed to get our operational execution to a level that we felt like, "Hey, when we launch this differentiating program, we're ready." We feel we've reached that time. It is a unique relationship. It is an exclusive relationship. It is not a short-term relationship. We fully plan to launch it across our U.S. portfolio. We are starting in those 10 states because that is our northern tier business unit. Our northern tier business unit is historically from Holiday. They have over a 20-year food history.

Speaker #5: and we feel like we're ready. we, we paused a little bit. I think as I've talked to you, we needed to reset. We needed to come back.

Speaker #5: We needed to get our operational execution to a level that we felt like, hey, when we launch this differentiating program, we're ready.

Speaker #5: and we feel we've reached that time. it is a unique relationship. It is an exclusive relationship. it is not a short-term relationship. and we fully plan to launch it across our, our US, portfolio.

Speaker #5: We are starting in those 10 states because that is our northern tier business unit. Our northern tier business unit is historically from Holiday. They have over a 20-year food history.

Alex Miller: We are starting in those 10 states because that is our Northern Tier Business Unit. Our Northern Tier Business Unit is historically from Holiday. They have over a 20-year food history. They have over 20% food conversion or food penetration. They have a deeply entrenched culture in food. And I can tell you, Joni and her team are pumped to roll this partnership out with Guy Fieri and our 11 Flavortown products. We're excited. We think we're ready to gain additional awareness of our food programs and what we can bring. We believe this will do this and give us some additional energy and recognition in the food space.

Speaker #5: They have over a great, over 20% food conversion or food penetration. They have a deeply entrenched culture in food. I can tell you, Joni and her team are pumped to roll this partnership out with Guy Fieri and our 11 Flavor Town products.

Joelle: They have over 20% food conversion or food penetration. They have a deeply entrenched culture in food. I can tell you, Joni and her team are pumped to roll this partnership out with Guy Fieri and our 11 Flavor Town products. We're excited. We think we're ready to gain additional awareness of our food programs and what we can bring. We believe this will do this and give us some additional energy and recognition in the food space.

Speaker #5: So, we're excited. We think we're ready to gain additional awareness of our food programs and what we can bring. We believe this will help us do this.

Speaker #5: and give us some, some additional energy and recognition in the food space.

Speaker #2: Perfect. Thank you, and best of luck.

Filipe Da Silva: Perfect. Thank you, and best of luck.

Martin Landry: Perfect. Thank you, and best of luck.

Philippe Da Silva: Perfect. Thank you and best of luck.

Speaker #5: Thank you.

Alex Miller: Thank you.

Joelle: Thank you.

Speaker #3: Your next question comes from Luke Hannon with Canaccord. Your line is now open.

Speaker 3: Your next question comes from Luke Hannon with Canaccord. Your line is now open.

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

Speaker #2: Thanks. Good morning, everyone. Alex, I wanted to follow up on a comment you had earlier on the cigarette pricing optimization that you're doing.

Luke Hannan: Thanks. Good morning, everyone. Alex, I wanted to follow up on a comment you had earlier on the cigarette pricing optimization that you're doing. You mentioned it launched in June, and thus far it's showing promising results. Can you just share, I mean, what exactly does that program entail and how widespread is it thus far? What exactly do you mean by promising results?

Speaker 7: Thanks. Good morning, everyone. Alex, I wanted to follow up on a comment you had earlier on the cigarette pricing optimization that you're doing. You mentioned it launched in June, and thus far, it's showing promising results. Can you just share what exactly does that program entail and how widespread is it thus far? What exactly do you mean by promising results?

Speaker #2: You mentioned it launched in, in June and thus far, it's showing promising results. Can you just share, I mean, what exactly does that, that program entail and, and how widespread is it thus far?

Speaker #2: And what's, what exactly do you mean by, by promising results?

Speaker #5: Yeah, I think, I know I'm like a broken record talking with you guys about data, and the use of data, and bringing in data.

Alex Miller: Yeah, I think, I know I'm like a broken record talking with you guys about data and the use of data and bringing in data. This is all about utilizing our data to understand where our customers are and how they're responding to our price points and our offers against our competition, and comparing market by market, state by state against our competitors, against our market share data. We are making adjustments to where we price premium against value, against the different tiers, within that. We are using our data to drive that. I referenced in my previous comments that we outperformed the industry in sales in the United States by 3% in a quarter. That's good. We believe we can be better than that. It is across our business units in North America.

Joelle: I think I know I'm like a broken record talking with you guys about data and the use of data and bringing in data. This is all about utilizing our data to understand where our customers are and how they're responding to our price points and our offers against our competition, and comparing market by market, state by state, against our competitors, against our market share data. We are making adjustments to where we price premium against value, against the different tiers within that. We are using our data to drive that. I referenced in my previous comments that we outperformed industry and sales in the U.S. by 3% in the quarter. That's good. We believe we can be better than that. It is across our business units in North America. Candidly, we have four business units that we still see opportunity in how we're positioning those things.

Speaker #5: but this is all about utilizing our data to understand where our customers are and how they're responding to our price points and our offers against our competition, and comparing, market by market, state by state, against our competitors, against our market share data.

Speaker #5: and we are making adjustments to where we price premium against value, against the different tiers, within that. and we are using our data to drive that.

Speaker #5: I referenced in my previous comments that we outperformed industry and sales in the United States by 3% in the quarter. That's good. We believe we can do better than that.

Speaker #5: it is across our business units, in North America. and candidly, we have four business units that we still see, opportunity in what and how we're positioning those things.

Alex Miller: Candidly, we have four business units that we still see opportunity in what and how we're positioning those things. I can tell you our operators and our merch teams are actively pursuing those opportunities in that positioning as we speak. Excited. Again, our scale and our ability to capture data and use that data, we are seeing it in our results, we are seeing it in our differentiation, and we're excited and we believe that will grow the gap that we perform against our competitors.

Speaker #5: And I can tell you our operators and our merch teams, are actively pursuing, those opportunities in that positioning as we speak. so excited. again, our scale and our ability to capture data and use that data, it we are seeing it in our results.

Joelle: I can tell you our operators and our merch teams are actively pursuing those opportunities in that positioning as we speak. Excited. Again, our scale and our ability to capture data and use that data, we are seeing it in our results. We are seeing it in our differentiation. We're excited, and we believe that will grow the gap that we perform against our competitors.

Speaker #5: We are seeing it in our differentiation, and we're excited. We believe that this will grow the gap in how we perform against our competitors.

Speaker #2: Okay. Thank you very much.

Luke Hannan: Okay. Thank you very much.

Speaker 7: Okay, thank you very much.

Speaker #3: Your next question comes from Corey Tao with Jeffries. Your line is now open.

Operator: Your next question comes from Corey Tarlowe with Jefferies. Your line is now open.

Speaker 3: Your next question comes from Corey Towell with Jefferies. Your line is now open.

Speaker #6: Follow up on for Felipe. so just on the, the broader question, Alex, why not in today's environment, lean in more into value? when it seems to be working very well, and you they're you're clearly gaining market share, so how do you think about the ability to and, and the, the, the, the balance between leaning in more into value and protecting margin?

Corey Tarlowe: Follow up on for Philippe. Just on the broader question, Alex, why not in today's environment, lean in more into value, when it seems to be working very well and that you're clearly gaining market share? How do you think about the ability to, and the balance between leaning in more into value and protecting margin?

Speaker 7: Follow-up for Philippe. On the broader question, Alex, why not, in today's environment, lean in more into value when it seems to be working very well and you're clearly gaining market share? How do you think about the ability to and the balance between leaning in more into value and protecting margin?

Speaker #5: I, I, I think you will see us lean into value wherever we see the opportunity to do it. We believe we've fundamentally found something in food.

Alex Miller: I think you will see us lean into value everywhere we see the opportunity to do it. We believe we fundamentally found something in food that enables us to show real value that's resonating with consumers. I wanna be clear, we're doing that not just in North America. We're doing it in Europe as well. I was in Norway last week, Philippe and I both were, I saw us leaning into food value and winning, growing transactions. I talked earlier with Irene about private label. We will continue to push on private label, grow those teams, grow that offering. I think your challenge is a great one, to us as an organization.

Joelle: I think you will see us lean into value everywhere we see the opportunity to do it. We believe we fundamentally found something in food that enables us to show real value that's resonating with consumers. I want to be clear, we're doing that not just in North America. We're doing it in Europe as well. I was in Norway last week. Philippe and I both were. I saw us leaning into food value and winning, growing transactions. I talked earlier with Irene about private label. We will continue to push on private label, grow those teams, grow that offering. I think your challenge is a great one. To us as an organization, I can tell you we will lean into value everywhere we see the opportunity to do that in a compelling way that resonates with the customer.

Speaker #5: That enables us to show real value that resonates with consumers. I want to be clear, we're doing that not just in North America.

Speaker #5: We're doing it in Europe as well. I was in Norway last week, Felipe and I both were. I saw us leaning into food value and winning.

Speaker #5: growing transactions. I talked earlier with Irene about private label. we will continue to push on private label, grow those teams, grow that offering, so I think you're challenge is a great one.

Speaker #5: to us as an organization, I can tell you we will lean into value everywhere we see the opportunity to do that in a compelling way that resonates with a customer.

Alex Miller: I can tell you we will lean into value everywhere we see the opportunity to do that in a compelling way that resonates with the customer.

Speaker #2: Okay. Great. And then,

Speaker #6: Felipe, just on cost management and efficiency, what are some of the cost control measures or, or OPEX efficiencies that you see helping to benefit the business throughout the remainder of this fiscal year?

Corey Tarlowe: Okay, great. Philippe, just on cost management and efficiency, what are some of the cost control measures or OPEX efficiencies that you see helping to benefit the business throughout the remainder of this fiscal year, and what might be the potential P&L impacts? Thanks so much.

Speaker 7: Okay. Great. Felipe, just on cost management and efficiency, what are some of the cost control measures or OPEX efficiencies that you see helping to benefit the business throughout the remainder of this fiscal year? What might be the potential P&L impacts? Thanks so much.

Speaker #6: And, and what might be the potential P&L impacts? Thanks so much.

Speaker #5: Thanks for the question, Corey. so, I would say first is, it's leveraging our scale, you know, on the on the GNFR, procurement, you know, with just early-stage centralizing, the, the, the, the, the purchase of store supplies or, you know, negotiating our off consulting fees, payment, you know, e-everything, OPEX, you know, also, you know, looking at differently at sourcing, you know, and having teams that are, you know, just, you know, being, a bit more strategic on where we buy, you know, our stuff.

Filipe Da Silva: Thanks for the question, Corey. I would say first it's leveraging our scale, you know, on the GNFR procurement. You know, we're just early stage centralizing the purchase of stock supplies or, you know, negotiating our off consulting fees, payment, you know, everything, CapEx, you know. Also, you know, looking at differently at sourcing, you know, and having teams that are, you know, just, you know, being a bit more strategic on where we buy, you know, our stuff. There is a massive opportunity for us, and we are just at the beginning of the journey. The second, I would say, focus for us is, you know, is everything related to the back office.

Alex Miller: Thanks for the question, Corey. I would say first, it's leveraging our scale on the GNFR procurement. We're just early stage centralizing the purchase of stock supplies or negotiating our consulting fees, payment, and everything, and OpEx. Also, looking differently at sourcing and having teams that are just being a bit more strategic on where we buy our stuff. There is a massive opportunity for us, and we are just at the beginning of the journey. The second focus for us is everything related to the back office. You know that we have already built quite a strong shared service center, but we continue there. We see some more opportunities leveraging the partnership that we have built with some of the specialists in this area. We believe that we can continue to optimize that, to centralize, to offshore activities. That's something also that we see.

Speaker #5: So, so there is, massive opportunity for us, and we are just at the beginning of the journey. the, the second, I would say, focus for us is, you know, it's everything related to the to the back office.

Speaker #5: So, you know, that we have already built a quite a strong, shared service center, but, we continue there and we see some more opportunities, you know, leveraging the partnership that we have built with some, you know, of the, I would say, specialists on, on the on this area.

Filipe Da Silva: You know that we have already built a quite a strong shared service center, but we continue there and we see some more opportunities, you know, leveraging the partnership that we have built with some, you know, of the, I would say a specialist on this area. We believe that we can continue to optimize that, to centralize to offshore activities. That's something also that we see. And the third component is of course, you know, labor in stores and continue to optimize, you know, what we can do in stores there.

Speaker #5: We we, we believe that we can we can continue to optimize that, to, centralize, to, offshore, activities. That's something also that, that we see.

Speaker #5: and, and the, the, the third component is, is, of course, is, you know, labor, labor in stores and, continue to optimize, you know, what we can do in stores, there.

Alex Miller: The third component is, of course, labor in stores and continue to optimize what we can do in stores there. Helping our employees in stores to be much more efficient, to focus on the customer-facing activities and trying to remove all this administrative stuff. There is still a lot to do there. Very, very confident about the pipeline. As we mentioned many times, we had this $800 million objective over five years. I really believe that we'll exceed this target. We are really encouraged by what the teams are accomplishing and the pipeline that we see.

Speaker #5: so helping our, you know, our, our, our, our employees in stores, to be much more efficient, to focus on the customer-facing activities. And, trying to remove all these administrative stuff.

Filipe Da Silva: Helping our, you know, our employees in stores, to be much more efficient, to focus on the customer-facing activities and trying to remove all this administrative stuff. There is still a lot to do there. Yeah, very confident about the pipeline. As we mentioned, you know, many times, we have this $800 million objective over 5 years. Really believe that we'll exceed this target. We are really encouraged by what the teams are accomplishing and the pipeline that we see.

Speaker #5: So there is a there is a still a lot to, to, to, to do there. So yeah, very, very confident about the, the pipeline.

Speaker #5: And as we mentioned, you know, many times, we, we have these 800 million, you know, dollar, objective over five years. really believe that, we'll, we'll exceed this, this target, we are we are really encouraged by what the teams are, are accomplishing and, and the pipeline that we see.

Speaker #6: Great. Thank you so much and best of luck.

Corey Tarlowe: Great. Thank you so much and best of luck.

Speaker 7: Great. Thank you so much, and best of luck.

Speaker #3: Your next question comes from Etienne Ricard with BMO Capital Markets. Your line is now open. I'm sorry. Your next question comes from Mark Cardin with UBS.

Operator: Your next question comes from Étienne Ricard with BMO Capital Markets. Your line is now open. I'm sorry. Your next question comes from Mark Carden with UBS. Your line is now open.

Speaker 3: Your next question comes from Etienne Ricard with BMO Capital Markets. I'm sorry. Your next question comes from Mark Cardin with UBS. Your line is now open.

Speaker #3: Your line is now open.

Speaker #7: Good morning. Thanks so much for taking the question. So you guys mentioned that you're in a bit of a reset phase of in private label.

Mark Carden: Good morning. Thanks so much for taking the question. You guys mentioned that you're in a bit of a reset phase in private label. Could you provide some additional color on any particular categories of focus on this front? Have you seen any short-term headwinds to penetration? Just when are you thinking about with respect to the timeline to when you could see this becoming a more consistent contributor to your margin? Thanks.

Philippe Da Silva: Good morning. Thanks so much for taking the question. You guys mentioned that you're in a bit of a reset phase in private label. Could you provide some additional color on any particular categories that focus on this front? Have you seen any short-term headwinds to penetration? What are you thinking about with respect to the timeline to when you could see this becoming a more consistent contributor to your margin? Thanks.

Speaker #7: Could you provide some additional color on any particular categories of focus on this front? Have you seen any short-term headwinds to penetration? And then, when are you thinking about, with respect to the timeline, when you could see this becoming a more consistent contributor to your margin?

Speaker #7: Thanks.

Speaker #5: Yeah, thanks for the question. you know, I've talked with you in previous quarters about supply chain. and supply chain matters for private label. so, you know, we'll open our three new warehouses, next six months.

Joelle: Yeah. Thanks for the question. I've talked with you in previous quarters about supply chain. Supply chain matters for private label. We'll open our three new warehouses in the next six months, and then we'll go to phase two. Our investments in supply chain will further underpin and enable our private label piece. I think we needed to reset on what SKUs, placement of those SKUs, procurement of those SKUs, and we've done that now. Within our plans, it was that resetting of those areas. Specifically, this is in the U.S. I think we grew private label 8%, 9% in Europe this quarter. Canada continues to look good, and we're growing private label. When I talk about the reset, I'm really talking about the U.S.

Alex Miller: Yeah, thanks for the question. You know, I've talked with you in previous quarters about supply chain and supply chain matters for private label. You know, we'll open our 3 new warehouses next 6 months, then we'll go to phase 2. Supply chain, our investments in supply chain will further underpin and enable our private label piece. I think we needed to reset on what SKUs, placement of those SKUs, procurement of those SKUs, and we've done that now. You know, within our plans, it was that resetting of those areas. And specifically, this is in the United States. I think, you know, we grew private label, what? 8, 9% in Europe this quarter. Canada continues to look good and we're growing private label.

Speaker #5: Then we'll go to phase two. Our investments in the supply chain will further underpin and enable our private label piece. I think we need to reset on what SKUs, the placement of those SKUs, and the procurement of those SKUs, and we've done that now.

Speaker #5: so you know, within our plans, it was that resetting of those, areas, and, and specifically, this is in the United States. I think, you know, we grew private label what, 8, 9 percent in Europe, this quarter.

Speaker #5: Canada continues to look good and we're, we're growing private label. So when I talk about the reset, I'm really talking about the United States.

Alex Miller: When I talk about the reset, I'm really talking about the United States. I think, you know, We will invest in private label and identify private label SKUs in any category that we see across our portfolio where we can provide a compelling consumers and the consumers respond to that, and we can re-realize a cost of goods basis that makes sense for us. At the end of the day, private label will be margin accretive. It will not be detrimental to our margins. We have never experienced that. I think the combination of investment in our supply chain, the resetting of our private label portfolio, and I think over the next, let's call it 24 months, you will begin to see that penetration heighten.

Speaker #5: I, I think, you know, we don't we will invest in private label and identify private label SKUs in any category that we see across, our portfolio where we can provide a compelling consumers and the consumers respond to that.

Joelle: We will invest in private label and identify private label SKUs in any category that we see across our portfolio where we can provide a compelling consumer and the consumers respond to that, and we can realize a cost of goods basis that makes sense for us. At the end of the day, private label will be margin accreted. It will not be detrimental to our margins. We have never experienced that. The combination of investment in our supply chain, the resetting of our private label portfolio, and over the next, let's call it 24 months, you will begin to see that penetration heighten. It is an area we are talking about investing further in, really with human resource across the group.

Speaker #5: We can re-realize a cost of goods basis that makes sense for us. at the end of the day, private label will be margin accretive.

Speaker #5: it will not, be detrimental to our margins. We have never experienced that. So I think the combination of investment in our supply chain, the resetting, of our private label portfolio, and, and I think over the next, let's call it 24 months, you will begin to see that penetration heighten.

Speaker #5: and it is an area we are talking about investing further in, but really with human resource across the group.

Alex Miller: It is an area we are talking about investing further in, really with human resource across the group.

Speaker #6: Great. Thanks so much. Good luck, guys.

Mark Carden: Great. Thanks so much. Good luck, guys.

Speaker 7: Great. Thanks so much. Good luck, guys.

Speaker #5: Yep. Thank you.

Alex Miller: Thank you.

Joelle: Thank you.

Speaker #3: There are no further questions at this time. I will now turn the call over to management for closing remarks.

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

Speaker 3: There are no further questions at this time. I will now turn the call over to management for closing remarks.

Speaker #7: Thank you, Alex and Felipe. That covers all the questions for today's call. Thank you all for joining. We wish you a great day and look forward to discussing our second quarter 2026 results in November.

[Company Representative] (Alimentation Couche-Tard): Thank you, Alex and Philippe. That covers all the questions for today's call. Thank you all for joining. We wish you a great day and look forward to discussing our Q2 2026 results in November.

Speaker 8: Thank you, Alex and Philippe. That covers all the questions for today's call. Thank you all for joining. We wish you a great day and look forward to discussing our second quarter 2026 results in November. Ceci met fin à la conférence d'aujourd'hui. Nous vous remercions d'avoir été parmi nous. Nous vous souhaitons une agréable journée et au plaisir de discuter avec vous de nos résultats du deuxième trimestre 2026 en novembre prochain. Vous êtes maintenant invités à mettre fin à ce rappel.

Speaker #7: This has been FedEx Conference d'aujourd'hui. Nous vous remercions d'avoir été parmi nous. Nous souhaitons une agréable journée et au plaisir de discuter avec vous de nos résultats du deuxième trimestre 2026 en novembre prochain.

Mathieu Brunet: Thank you, everyone.

Speaker #7: Vous êtes maintenant invités à mettre fin à cet appel.

Speaker #5: Thank you, everyone.

Speaker #7: Thank you.

Alex Miller: Thank you, everyone.

Alex Miller: Thank you.

Joelle: Thank you.

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

Speaker 3: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating in our study. Please disconnect your lines.

Q1 2026 Alimentation Couche-Tard Inc Earnings Call

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