Metro Inc.

Good morning, ladies and gentlemen, and welcome to the Metro Inc. 2025 second quarter results, Résilience du 12e trimestre 2025 conference call. At this time, all lines are in listen-only mode. Before we begin the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call has been recorded on Wednesday, April 16, 2025. I would now like to turn the conference over to Mr. Sharon Kadoshi. Please go ahead.

Good morning, everyone. Thank you for joining us today. Our comments will focus on the financial results of our second quarter, which ended on March 15th. With me today is Mr. Eric Lafleche, President and CEO, François Thibault, Executive VP and CFO, Marc Giraud, Chief Operating Officer, Jean-Michel Coutu, President of the Pharmacy Division, and Nicolas Amiot, incoming CFO. During the call, we'll present our second 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 indicative of forward-looking statements. The forward-looking statements are based upon certain assumptions regarding the Canadian food and pharmaceutical industries, the general economy, our annual budget, and our 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 2024 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, Estelle, and good morning, everyone. So total sales reached $4.9 billion in the second quarter, an increase of 5.5% versus the same period last year. Food same-store sales were up 5.3%, with sales positively impacted by the transfer of two significant pre-Christmas shopping days from the first quarter to the second quarter this year. When we adjust for this calendar shift, same-source sales were up 3.9%. In pharmacy, we recorded solid same-source sales of 7% on top of 5.9% in the previous year. Our gross margins stood at 20% of sales versus 19.9% in the same quarter last year. Operating expenses were $521.3 million, representing 10.6% of sales versus 10.7% of sales in the same quarter last year. We benefited from the fact that we cycled transition and duplication costs last year related to our Telbon Automated Distribution Center, but these benefits were partly upset by increases in other areas, notably energy costs in Ontario due to cold weather and an increase in fees related to our online partnership sales. EBITDA for the quarter totaled $461 million, up 5% year-over-year, and up 6.8% when we removed the gain and losses on disposal of assets. Total depreciation and amortization expense for the quarter was $136.1 million, up 6.6 million, or 5.1%. The increase in depreciation and amortization expense is mainly due to the commissioning of investments in our supply chain, including some automation technology and pharma, and the final phase of our fresh distribution center in Toronto last summer, as well as the timing of retail investments. Net financial costs for the second quarter were $33.4 million compared to $34.1 last year, and that decrease in financial costs is mainly due to overall lower interest expense on our debt, partly offset by lower capitalized interest. Our effective tax rate of 24.5% is lower than the effective tax rate of 26.5% in the second quarter last year as a result of the Tel Bund tax holiday of $6 million. Adjusted net earnings were $226.6 million compared to $206.4 million last year, a 9.8% increase, and adjusted net earnings per share amounted to $1.02 versus $0.91 last year, and that's up 12.1% year-over-year. On the food retail side, after 24 weeks, we converted two stores and carried out major expansions and renovation at eight stores for a net increase of 18,100 square feet, or 0.1% of our food retail network. Following the end of the quarter, we opened a new Food Basics in Ontario and converted another Metro store to supersede in Quebec. Under our normal course issuer bid program as of April 4th, we have repurchased 2.849 million shares for a total consideration of $264 million, representing an average share price of $92.65. I'll now turn it over to Eric.