Metro Inc.

Good afternoon, ladies and gentlemen, and welcome to Metro Inc. 2026 first quarter results conference call. At this time, all lines are in the listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require needed assistance, please press for the operator. Also note that this call is being recorded on January 27, 2026. I would now like to turn the conference over to Sharon Kadosh, Director, Investor Relations and Corporate Finance. Please go ahead.

Merci, Sylvie. Good afternoon, everyone, and thank you for joining us today. Our comments will focus on the financial results of our first quarter, which ended on December 20. With me today is Mr. Eric Lafleche, President and CEO, Nicolas Amieux, Executive VP and CFO, Marc Giroux, Chief Operating Officer, and Jean-Michel Coutu, President of the Pharmacy Division. During the call, we will present our first 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 can 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 2026 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 2025 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 Nicolas.

All right, thank you, Sharon, and good afternoon, everyone. First, I will start by mentioning that we are pleased to report that the challenges related to the temporary shutdown of our frozen food distribution center in Toronto are now behind us as operations have fully resumed. Our contingency plan was effective in securing supply across our Ontario food store network. The direct costs associated with our freezer issue and our related contingency plan amounted in the quarter to 21.6 million pre-tax or 15.9 million post-tax, and our results are adjusted for these costs only. Turning to our Q1 results, total sales reached 5.3 billion, an increase of 3.3% versus the first quarter last year. Sales were negatively impacted by the transfer of one significant pre-Christmas shopping day to the second quarter this year, as well as by the temporary shutdown of our frozen food distribution center, as I've just mentioned. Food same-store sales grew by 1.6% in the quarter, and they were up 1.9% when adjusting for the Christmas shift. On the pharmacy side, same-store sales grew by 3.9%, supported by a 5.1% growth in prescription sales and a 1.3% growth in front-store sales. Similar to food, When adjusting for the Christmas shift, front store sales were up 1.7%. Our gross margin reached $1.04 billion, or 19.7% of sales in the quarter, the same percentage as Q1 last year. Turning to operating expenses, they were $557.6 million in the quarter, up 5.5% year over year. As a percentage of sales, operating expenses were 10.5% versus 10.3% in the first quarter last year, as they were unfavorably impacted by 20.8 million of direct costs related to the temporary shutdown of our freezer. Excluding these costs, operating expenses grew by 1.6% year-over-year and represented 10.2% of sales. Note that we also had 0.8 million of direct costs impact related to our freezer last issue in our losses on asset disposal. EBITDA for the quarter amounted to 482.6 million. That's up 0.2% year-over-year and stands at 9.1% of sales. Adjusting for the 21.6 million direct freezer costs, adjusted EBITDA stood at 504.2 million, up 4.7% year-over-year, reaching 9.5% of sales, and increase of 13 basis points over Q1 2025. Total depreciation and amortization expense for the quarter was 143.6 million, up 10 million. The increase in depreciation and amortization expenses mainly due to the increase in our retail investments, including the opening of new stores from last year, right of use assets, as well as the commissioning of investments in our supply chain, including some automation technology in the pharmacy division. Net financial costs for the first quarter were $37.3 million compared to $30.7 million last year. The bulk of the increase results from the recording in Q1 2025 of interest receivable of $4.2 million regarding the resolution of an income tax position related to prior years, as well as higher interest on net debt. Our effective tax rate of 25% is higher than the effective tax rate of 18.2% in the first quarter last year, largely driven by the resolution of the just-mentioned income tax position related to prior years of $20.6 million in Q1 2025, as well as by the Terrebonne VC tax holiday, which amounted to $4.9 million this quarter versus $6.1 million in the same quarter last year. Adjusted net earnings were $248.7 million compared to $245.4 million last year, an increase of 1.3%, while adjusted fully diluted net earnings per share amounted to $1.16 versus $1.10 last year, up 5.5% year over year. Our capital expenditures in Q1 totaled $61.9 million versus $89.3 million last year. Looking forward, We expect CapEx and F26 to reach approximately $550 million as we continue to invest in our retail network. On the food retail side, in Q126, we opened three stores and carried out major expansion and renovation projects at three other stores for a net increase of 88,600 square feet, or 0.4% of our food retail network square footage. Under our normal issuer bid program, as of January 16th, we have repurchased 1 million shares for a total consideration of $98.7 million, representing an average share price of $98.72. The Board of Directors declared yesterday a quarterly dividend of $0.4075 a share, or $1.63 per share on an annual basis, and that's an increase of 10.1% versus last year. This is the 32nd consecutive year of dividend growth for Metro, and it represents a payout of about 33% of last year's adjusted net earnings in line with our dividend policy. On this, I will now turn it over to Eric for more color on our results. Thank you.