Metro Inc.

good morning ladies and gentlemen and welcome to the Metro Inc 2024 third quarter results conference call at this time all participant lines are in the listen-only mode following the presentation we will conduct a question-and-answer session and if at any time during this call you require immediate assistance please press star 0 for the operator also note that this call is being recorded on Wednesday August 14th 2024 and I would like to turn the conference over to Sharon Kadosh Director, Investor Relations and Treasury. Please go ahead.

Thank you, Sylvie. Good morning, everyone, and thank you for joining us today. Our comments will focus on the financial results of our third quarter, which ended on July 6th. With me today is Mr. Eric Lafleche, President and CEO, François Thibault, Executive VP and CFO, Marc Giroux, COO Food, and Jean-Michel Couture, President of the Pharmacy Division. During the call, we will present our third quarter results and comment on its highlights. We will then be happy to take your questions. Before we begin, I would like to remind you that we will use in today's discussion different statements that could be construed as forward-looking information. In general, any statement which does not constitute a historical fact may be deemed a forward-looking statement. Words or expressions such as expect, intend are confident that, will, and other similar words or expressions are generally indicated of forward-looking statements. The forward-looking statements are based upon certain assumptions regarding the Canadian food and pharmaceutical industry, the general economy, our annual budget, and our 2024-2025 action plan. These forward-looking statements do not provide any guarantees as to the future performance of the company and are subject to potential risks, known and unknown, as well as uncertainties that could cause the outcome to differ materially. Risk factors that could cause actual results or events to differ materially from our expectations as expressed in or implied by our forward-looking statements are described under the risk management section in our 2023 annual report. We believe these forward-looking statements to be reasonable and pertinent at this time and represent our expectations. The company does not intend to update any forward-looking statements except as required by applicable law. I will now turn the call over to Francois.

Thank you, Sharon, and good morning, everyone. For the quarter, total sales reached $6.65 billion, an increase of 3.5% versus the same period last year. Same-store sales were up 2.4% in food and up 5.2% in pharmacy. Our gross margins stood at 19.6% of sales, essentially flat when compared to our third quarter last year. Operating expenses amounted to $681.7 million, up 4.8% versus last year, and as a percentage of sales, they stood at 10.2% versus 10.1% in the same quarter last year. The higher ratio is mainly due to the startup of our new automated distribution center for fresh and frozen product in Taban, and we also continue to have higher third-party e-com fees than last year. Last year's operating expenses did include $5.1 million of launch costs related to the Mois Level T program. EBITDA for the quarter totaled $620.2 million, representing 9.3% of sales, and is up 1.6% year-over-year when we remove the gain and loss of sales of assets. Total depreciation and amortization expense for the quarter was $174 million, up $14.5 million versus last year, and a significant portion of the increase is due to our new Telbon in D.C. We also started depreciating the Fresh Phase II investment in Toronto in the last month of the quarter. Net financial costs for the third quarter were $46.6 million compared to $37.1 million last year, and the increase is due to a higher level of debt and interest rates, as well as lower capitalized interest related to our distribution center automation projects. Adjusted net earnings were $305 million compared to $314.8 million last year, a 3.1% decrease, and our adjusted net earnings per share amounted to $1.35 flat year over year. On the retail side, in the first 40 weeks of fiscal 24, we opened six Super C stores, including two conversions. We carried out major expansions and renovations of seven stores and relocated another one for a net increase of 237,000 square feet, or 1.1% of our food retail network. Under a normal course issue of this program, we may repurchase up to 7 million shares between November 25, 2023 and November 24, 2024. As of August 2nd of this year, we have repurchased 6,045,000 shares for a total consideration of $430 million, representing an average share price of $71.14. In closing, our third quarter results are tracking well to the guidance we provided in November for fiscal 24. That's it for me. I'll now turn it over to Eric.