Good morning. My name is Sylvie, and I will be your conference operator today. [Foreign Language] I will now introduce Mr. Jean-Philippe Lachance, Vice President, Financial Planning and Analysis, Investor Relations and Treasury at Alimentation Couche-Tard. [Foreign Language] Jean-Philippe Lachance: [Foreign Language] Good morning. I would like to welcome everyone to this web conference presenting Alimentation Couche-Tard financial results for the second quarter of fiscal year 2023. All lines will be kept on mute to prevent any background noise. After the presentation, we will answer questions from analysts asked live during the 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. Our financial results will be presented by Mr. Brian Hannasch, President and Chief Executive Officer, and Mr. Claude Tessier, Chief Financial Officer. Brian, you may begin your conference.

Thank you, Jean-Philippe, and good morning, everyone. Thank you for joining us for this presentation of our second quarter 2023 results. We are pleased to report strong results this quarter, especially in the face of the continued challenges of inflation, energy and fuel prices around the globe. We had strong performance in convenience with solid same-store sales, particularly in the U.S. market, which had very strong growth in food and solid growth in all of our categories with the exception of traditional combustible nicotine. We also continued to generate robust fuel margins across all of our platforms. With the pressure in our consumers, we remain committed to delivering consistent value both inside our stores and on our forecourts to help make our customers’ lives a little bit easier. Before we turn to the results, during this quarter, several of our U.S. business units experienced [indiscernible] of Hurricane Ian. It was a massive Category 4 storm and one of the largest hurricanes ever to hit the U.S. It slammed into our Southwest Florida market and moved up to the state and impacting our business across Florida, the Atlantic States and the Carolinas. Thankfully no team members were injured. However, at the peak of the hurricane, we had over 500 stores closed due to power outages, wind damage or flooding. Once again, in the worst of times, our team members pulled together and did a great job getting the majority of our stores reopened to service our customers and our communities in their time of need. For customers, we initiated Red Cross Round-up store campaign and as well as a company-wide fund to help our team members that have been impacted by Hurricane Ian. Now turning to our results, beginning with convenience. Compared to same quarter last year, same-store merchandise revenues increased 5.6% in the U.S., 2.9% in Europe, and decreased 1.5% in Canada. However, I would note that Canada is up strong single digits when you exclude tobacco, which continuously pressured by the illicit trade throughout the country. No doubt, the consumer continues to be pressured from rising prices and we are focused on balancing, providing good values to them while recovering the inflationary impacts on our business. Across the network, our Fresh Food, Fast program was up over 20% the same-store sales and continues to grow across the 4,200 stores globally. This quarter, we launched $5 Pizza Fridays across many of our markets where consumers can purchase both Hot to Go or Take-and-Bake pizzas for only $5 on Fridays. This as well was our focus on the sale of fresh baked cookies are becoming popular items to our customers seeking value, bringing new and returning customers to our stores more frequently and driving overall growth. For dispense beverage, we continue to see good growth in Cold & Frozen as well as continued success with our proprietary Dew Purple Thunder with over 8 million cups sold by the end of the quarter. Our Sip & Save beverage subscription program continues to drive trips, enhance basket, and attract new users while providing great value. With the ongoing inflationary pressures, more than 420,000 subscribers are seeking deals and see the good value offer in Sip & Save. We have also continued to work to improve the online enrollment experience and we are seeing a larger percentage of our customers automatically renewing and signing up online. Packaged beverage growth was driven by strong dollar and unit growth across immediate consumption, carbonated soft drinks and energy drinks. Private brand, including private brand beverages also continues to see strong growth as consumers are looking for value and we meet that need with high-quality products at a lower price point with some of the main brands. In age-restricted beverages, beer sales continue to lead the category in the U.S. and in Europe. Alcohol also performed particularly well with wine leading the way. Across the network, supply chain issues are improving compared to previous quarters. In North America and Europe, we are seeing in-stock positions approaching back toward 95%, so more normal although we certainly have pockets where continues to be difficult. A significant challenge to our European operations has been rising energy costs, which are clearly impacting customers, team members and businesses. We are executing many energy saving initiatives across all of our European business units, including energy consumption and lighting, readjusting temperatures, unplugging unneeded equipment, and these best practices are being shared across all of our countries and work will continue to further accelerate this in the months ahead. While we see energy situation and associated costs as transitory, just having returned from visiting our European stores for two weeks, I can tell you that noticeably changing behavior across these societies. Inter operations, we have reduced demand between 10% and 20% in each of our European countries. This quarter we expanded our data-driven assortment optimization work throughout the rollout to all categories in North America. The current focus is on expanding the distribution of products that are high performing within the business unit and across business in other markets. Additionally, we are leveraging external data to pick up on trends that are not currently visible within our network. With the variability of our European network, we are in the planning phases of assortment work with a plan to have tests in our markets over the coming weeks. And on the pricing front, we continue to tailor our approach, giving the fluid inflationary dynamics in most of our markets. Moving to the fuel business. Same-store road transportation fuel volume decreased 1.9% in the U.S., 6.3% in Europe and 6.5% in Canada. Higher prices and challenging market conditions continue to impact our volumes. To alleviate some of the pressure of the pump, we are working actively to help our customers find value in different ways as we did with our very successful Circle K fuel day promotion in the U.S. this quarter, and we have significant tactical co-activities planned for the rest of the fiscal year throughout our markets. As I mentioned earlier, we continue to benefit from robust fuel margins, offsetting the pressures on volume across the network. In our Circle K fuel rebrand work, we completed more rebrands during the quarter and are now at over 3,500 Circle K fuel branded sites in the U.S. with many business units where the fuel rebranding work has now been completed. We do expect acceleration during the second half of the fiscal 2023 named to be close to 4,000 sites by the end of the fiscal year. In the U.S., we broadened our relationship with our fuel trading partner Musket in order to enhance our competitive positioning investments in the areas where we have significant volumes and customer base. A recent example, we took ownership of four U.S. terminals in combination, in a 50-50 joint venture with Musket, with Jacksonville, Florida to be an example of a market where we both had very, very strong demand and can optimize that asset to our advantage. This quarter, we've also established a supply and trading operation in Geneva, Switzerland, one of Europe's largest commodity hubs. Through a more active market participation, the expectation is to bring incremental value to the European organization as well as diversify our sources of supply. Also in Europe, our EV fast charging network had a significant milestone with the opening in Sweden of our first speed chargers for heavy trucks. Circle K became the first company in the Nordic countries to open publicly available speed charging for the brand new Electrical Heavy Truck segment. We kicked it off with six 360 kilowatt chargers with plans to expand this to 22 sites, in 90 truck charges in Sweden in the coming year. Charging capacity will soon increase to 1,000 kilowatt at the high end chargers. We are making incremental progress and recently launched EV charging network in North America as part of our announced plans to bring 200 EV charging units to our stores across North America over the next two years. So far it's been a positive customer reaction to our integrated offer and the amenities provided by our in-store offerings. While we are starting from a low level, we are glad to see customer acceptance and expect that to continue as density increases in new and existing markets. We are also proud of our recent innovation milestones. We now have over 1,000 units deployed in the rollout of our easy-to-use smart checkout technology. I was out in stores this week and acceptance has been great. We are seeing penetration of eligible transactions exceeding 50% in many of our stores, so we are looking to scale to 10,000 units across the network over the next three years and we also on the fuel side have passed 1 million pay-by-plate fuel transactions on Circle K forecourts in Europe. This pioneering license plate recognition system available in Sweden, Norway, Denmark, and now Estonia will continue to expand in the coming months across the Baltics in Poland. Finally, we've also piloted our new loyalty program in the U.S. and tiered concept in Europe. We continue to remain very pleased with the results in these pilots and we are preparing for expansion in the coming quarters in both the Europe and in North America. We continue to expand the network with the opening of 23 new industry sites this quarter and 53 year-to-date across the network in addition to having 73 sites under construction. While new store performance is exceeding expectations in both merchandise sales and fuel volumes, and remain the core part of our strategy. A combination of rising cost and supply chain constraints that we've experienced will likely continue to slow our near-term ambitions, but we expect these issues to mitigate in the coming quarters. Now before I turn it over to Claude, I want to cover our ongoing progress in staffing. It's been an unprecedented challenge, really 12 to 18 months, particularly in North America. We are seeing candidate flow improve through the quarter. We focus on new technologies to make the interview process easier and bring our time to hire down from days to hours. We've also become more active on social media campaigns – platforms, excuse me, driving more candidate star sites and attracting more early career talent. So again, while now knock on the woods, our staffing levels have improved significantly and are very, very close to normal levels. I'm going to pause there and let Claude take you through more on the second quarter financial results. Claude?

Thank you, Brian. Ladies and gentlemen, good morning. For the second quarter of fiscal 2023, we are happy to report net earnings of $810.4 million or $0.79 per share on a diluted basis. Excluding certain items described in more details in our MD&A, adjusted net earnings were approximately $838 million or $0.82 per share on a diluted basis for the second quarter of fiscal 2023 compared with $693 million or $0.65 per share on a diluted basis for the second quarter of fiscal 2022, an increase of approximately 20.9% in the adjusted net earnings. We delivered once again a solid quarter with impressive bottom-line growth notwithstanding the challenging inflationary environment. Adjusted diluted net earnings per share increased by 26.2% compared to the second quarter of fiscal 2022 driven by the strong gross profit growth as well as by our cost optimization initiatives, which have helped mitigate the impacts from higher inflation. These strong results have contributed to noticeable increases in our key return metrics as return on equity and return on capital employed reached 22.7% and 16.4%, respectively, up 30 basis points and 50 basis points compared to the first quarter of fiscal 2023. Even with another active quarter in share repurchases, our financial position remains very strong, highlighted by our leverage ratio of 1.2x, providing us with opportunities for the future and resulting in the announcement today of a dividend increase of 27.3% to C$0.14 per share. I will now go over some key figures for the quarter. For more details, please refer to our MD&A available on our website. During the second quarter, excluding the net impact from foreign currency translation, merchandise and service revenues increased by approximately $188 million or 4.7%. This increase is primarily attributable to organic growth and to their contribution from acquisitions, which amounted to approximately $40 million while being partly offset by the disposal of stores following the strategic review of our network. Same-store merchandise revenues increased by 5.6% in the United States, by 2.9% in Europe and other regions, and decreased by 1.5% in Canada. Same-store merchandise revenues in Canada were strongly impacted by increased competition of illicit market in the cigarettes category compared with the corresponding quarter of fiscal 2022. Excluding the net impact from foreign currency translation, merchandise and service gross profit increased by approximately $78 million or 5.7%. This is primarily due to organic growth. Our gross margins increased by 0.2% in United States to 34%, while it decreased by 0.1% in Europe and other regions to 38.3%, and by 0.9% in Canada to 33.2%. Moving on to the fuel side of our business. In the second quarter of fiscal 2023, our road transportation fuel gross margin was $0.4916 per gallon in the United States, an increase of $0.1277 per gallon. In Canada, it was C$0.1255 per liter and increase of C$0.152 per liter. In Europe and other regions, our road transportation fuel margin was $0.976 per liter, a decrease of US$0.0081 per liter driven by the impact of the translation of our foreign currency operation into U.S. dollars. Fuel margins remain healthy throughout our network due to the favorable market conditions and our continued efforts to optimize our supply chain. Now looking at the SG&A. For the second quarter of fiscal 2023, normalized operating expenses increased by 8.1% year-over-year. This is mainly driven by the inflationary pressures, most notably higher energy costs in our European operations, higher costs from rising minimum wages as well as the incremental investment in our stores to support our strategic initiatives, partly offset by amazing labor market. Despite the challenging market conditions, we have continued to deploy strategic efforts in order to mitigate the impact of a higher inflation level and continued pressure on wages, which is demonstrated by our normalized growth of expenses that was slightly below inflation. Excluding significant item described in more details in our MD&A, the adjusted EBITDA for the second quarter of fiscal 2023 increased by $177.9 million or 13.9% compared with the corresponding quarter of fiscal 2022, mainly due to higher road transportation fuel gross profit throughout our network and organic growth in our convenience operation, partly offset by our operating expense. The translation of our foreign currency operation into U.S. dollars had a net negative impact of approximately $47 million this quarter, and this negative impact translate into a negative impact of close to $0.03 on our EPS. From a tax perspective, the income tax rate for the second quarter of fiscal 2023 was 21.9% compared with 21.3% for the corresponding quarter of fiscal 2022. The increase mainly stems from the impact of different mix in our earnings across the various jurisdictions in which we operate. As of October 9, 2022, our return on equity remains strong at 27.7%, and our return on capital employed stood at 16.4%, both figures are higher sequentially compared to the first quarter. During the quarter, we continue to generate strong free cash flows and our leverage ratios to that 1.2x, 11 basis points lower than Q1 despite having repurchased $205 million during the quarter under our NCIB. Subsequent to the end of the quarter, shares were repurchased for an amount of $396.2 million. We also have strong balance sheet liquidity with $2.5 billion in cash and an additional $2.5 billion available to our main revolving credit facility. Turning to the dividend, Board of Director declared yesterday a quarterly dividend of C$0.14 per share, up 27.3% for the second quarter of 2023 to shareholders on record as at December 1, 2022, and approved its payment effective December 15, 2022. With that, I thank you all for your attention and turn the call back over to Brian.

All right. Thank you, Claude. As we reached the middle of our fiscal year, it's worth noting that we are on track to meet and surpass the organic objective of our five-year double again strategy given our strong last four quarter EBITDA performance at almost $5.6 billion. I want to thank all of our team members across the network for remaining committed to the strategy and leading the business forward even the face of monumental challenges, including the pandemic, wars, hurricanes and tough global economic conditions. As we continue to be laser focused on our strategy, we have more tools to engage our customers than we've ever had before and we are focusing on both existing initiatives and launching new opportunities to drive our organic growth. Now, with that, we'll take questions from analysts. Operator, over to you.

Thank you, sir. [Operator Instructions] And your first question will be from Michael Van Aelst at TD Securities. Please go ahead.

Hi. Good morning. I wanted to talk about the volumes actually, and considering the fuel prices fell dramatically over the start to finish in the quarter, can you give us some idea as to how the demand changed as the quarter progressed? Did it get meaningfully better heading into Q3? And then how much of that same-store volume decline do you think is attributable to the rebranding activities, and how long does it take for the stores to recover to normal volumes or prior volumes once they've been rebranded if ever?

Yes, Michael, I'll take that. So I'll break down to pieces. So for Europe, there's no doubt the extreme pressures that we're seeing from energy crisis has changed consumer behavior. We see it both in kilometers-driven, but also in speed. We looked at a phone study from Denmark and people have actually increased their average speed on the roads by over five kilometers an hour. So we think we're winning share in Europe both on B2B and B2C. But we've got a transitory negative impact on demand just with the impact in the war and the energy prices. If you look at the U.S., our largest market, couple dynamics. I think we did see both an improvement through the quarters. Prices came down a bit, and we also saw a reversal of an erosion in premium penetration, which typically is impacted negatively by the higher prices. So as prices came down, we saw premium penetration go up, which is very good for us, it's a very profitable SKU for us. Overall demand, I would say we're continued to focus on providing good value, consistent value. The industry remains very disciplined, there's no doubt that its prices are higher. There's a certain segment of the consumer base out there that's looking for the cheapest price on the street. But if you think about who those players are, they can only sell so much and they're only in so many locations and again, we think that's transitory. So as we think about fuel prices coming down, we think we're getting our fair share of the volume and our focuses on just being consistent as the market continues. On the rebrand, Michael, it's really depends on the brand we're switching from where we have supplier brands, where they've had very strong loyalty programs. We have seen some volume erosion with the rebrand. That's also in the context of just a really strong economic equation. Our ability to source fuel today, we think is best-in-class. And so the payoff, despite some volume erosion is really a no-brainer. It's been very, very good for us. And we don't see the same erosion inside the store. I think the bridge to that is getting our loyalty program, we successfully piloted both in the U.S. and in Europe, are ramped up to scale. And we're certainly hoping we can get that out in the market toward the end of the fiscal year. But the other brands that maybe didn't have a strong loyalty, we're not seeing that same impact. And actually we have some rebrands where we just got positive results switching from a partner brand to Circle K. So a little bit of a mixed story depending on where you're at.

All right. Thank you. I'll let someone else jump in.

Sure.

Thank you. Next question will be from Chris Li at Desjardins. Please go ahead.

Good morning, everyone. Claude, I was just wondering if you can maybe similar to the previous quarters, can you maybe break down for us sort of the major drivers or buckets of the year-over-year increase in SG&A expenses? And then secondly, do you expect a more meaningful step down in normalized goal in the second half of the year, as you start to maybe lap against higher comparison? Thank you.

Yes. Thank you, Chris. So yes, so to come back to what drove our 8.1% increase in normalized operating expenses, we see the same three buckets that we talked about in the last quarter. So the first one, it's wages. And I would say that wages, the impact of wages is a bit lighter this quarter because the retention measure are moving. So what we see in terms of our labor and how we are structured our wages is instead of retention programs that we had last year, now we are more back to normalized hours. So a lot of the regular time hours, more regular time hours, we always have the salaries and [indiscernible] still over time in our stores. But overall, we're covering all hours and we're good with that bucket, I think we're seeing improving performance on this third of the equation where there, the second, third is inflation. So again, this time it's electricity in Europe that is really strong in terms of increase. You see the inflation figures in Europe, and then mostly driven by energy prices. So there's a lot of impact in our equation from the electricity and energy prices in Europe. And finally, the third bucket is, all our strategic initiatives that we're – that we've put in place. So we see an impact probably – so the buckets are probably, a bit more like 37% and 25%, so the wages being a bit less of an impact in this quarter as far. And we're putting all the initiatives in place also to mitigate those costs. There is a lot of activities that we're putting together, and we have the cost initiatives. We have a couple of example of that or [indiscernible] taking out the store manager offices in a lot of our stores to help reduce the administrative work. We are also doing a lot of the initiatives on labor scheduling, and you can imagine also that a big focus in Europe and in the rest of the network is to look at all the energy saving initiative that we could put in place, to make sure that we're reducing that expense as much as possible in our stores in Europe. So finally, our vision for the second half, we said before that we have easier comps, that are coming our way, so that we're going to start to meet those easier comps in the next two quarters. And with the effect of our initiatives that we put in place, opening, we're going to be able to put some better numbers. But it's early for us and you're going to be proven to before calling a number with the inflation that is happening in Europe.

Okay. Thank you. I'll get back into the queue. Thanks.

Thank you, Chris.

Thank you. Next question will be from Vishal Shreedhar at National Bank Financial. Please go ahead.

Hi. Thanks for taking my questions. Just to circle back on Europe, I was hoping you could elaborate on the results there. So if we look at Europe, is it fair to say that in local currency, the fuel margins were flattish? And how should I interpret the comment that you made about 10% to 20% lower demand? Is that – did you see that this quarter or is that something that we should see in the future? And just on the back of that, how should we think Europe influence in general?

Vishal, on margin? It's a good observation. Actually, our CPL in Europe would've been $0.1105 in the quarter ex currency, so actually up $0.01 a liter. So again, very strong performance, very pleased with that. On demand, it was really around electricity, I think that we were referring to. We've got markets where electricity costs are up 500%, 600%. I spent two weeks there during the quarter, and just the efforts that we're making, the society is making at mitigating the impact of the rising costs and kind of doing their part for Ukrainian war was astounding. I literally got up one morning to go to the gym and had to use a flashlight to go through the hotel lobby, or my phone. So we've got markets where we've reduced our demand between 10% and 21%, and that's just doing a lot of little things at our sites, it's lowering the heat, it's unplugging coolers that we don't think are key. It's raising the temperature of our walking coolers. And so again, will that mitigate everything? I think it depends how the winter plays out there. And again, we view that as very transitory, it's going to be temporary, but it's having the material impact, both on our European P&L, but also just on our team members there. So more to do there, and again, sharing that globally. We're not seeing the same pressures to feeling the same pressures in North America, but certainly very real in our European markets.

Okay. Thank you. And just on U.S. fuel margins, the Delta versus Opus, seems to be a bit lower than we've seen over the last few years. I know Opus isn't necessarily the benchmark that you use, but I also know that you have many initiatives in place to kind of expand your fuel margin advantage versus the industry. So I was wondering if there was anything noteworthy that you'd like to point out on the fuel margin, this quarter, which may have caused that that lower deviation?

Yes, not really. Again, that does cycle and it's so geographically specific. When I look at our Western markets, I think we had a really strong quarter vis-à-vis the market. It just depends on, how liquid are the racks versus the spot market. And again, that picture just varies dramatically geographically. So we just remain focused on continuing to develop capabilities and now allow us to widen that gap. We've set up over a thousand trucks during COVID, which allows us to capture geographic anti arbitrage as an example, our trading group, both in Houston and now setting up in Geneva. So we just remain focused on doing the things that we can control and I don't think there's anything particular in the quarter Vishal that would indicate any erosion on that advantage that we're establishing versus the market.

Thank you.

Thank you. Next question will be from Irene Nattel at RBC. Please go ahead.

Thanks, and good morning, everyone. Brian, just following up on the last commentary around the trading groups, can you walk us through how having that trading expertise enhances your ability to deliver on the fuel margins and how it differs from, let's say, the way you used to do things and the way others do things? Because I think that's something that we all really need to understand.

Yes. It's a longer conversation and I can probably do justice to on the call, but high level and I'll focus on the U.S., we would typically have bought either from the racks or prices established by refiners locally or on the term basis and termed up a 100% of our demand. With the large shorts that we have, we've got consistent rateable demand that's very concentrated in some markets. We're able to act more opportunistically at times, and that maybe when one spot market is significantly advantaged versus another being able to deploy trucks, sometimes hundreds of miles to take advantage of very different cost arbitrages not being turned up on all of our volume and being opportunistic where we think the markets will be long. And there'll be people that are incentivized to cut prices to place barrels in a refinery system as an example. In Europe, it's very much – we're in waterborne markets, we have all import terminals, and so the ability to take advantage of cargos that may not have a home, as an example, Irene, and can be significantly cost advantage needs to be just a term relationship with a local refiner. So again, very long conversation. We've got Investor Day, I think we're trying to schedule for the fall, and I think that'd be a great time to go a little deeper there, if we get the opportunity.

That's great. Thank you. And just a question that we haven't really dived into yet, which is the inside store demand in the U.S. and what you're seeing, and particularly what you're seeing around adoption of the food and Halo impact in other categories?

I think we've been pleased with the consumer both in Canada and the U.S. Again, if you take Canada, if you take out tobacco, it's been very strong. So despite the inflationary pressures, I think we've been fortunate that unemployment rates remain a historic low and consumers will certainly feeling pressure between the economic stimulus during COVID and the high employment rates remain relatively in decent shape. So as we look to last quarter and what we're seeing in this quarter, we continue to see very, very solid demand inside the store. With regard to – what was your second question? I mean, it was the food, again, I'd say we're in the very early innings of that game, very pleased with the platform we've deployed. I think we're pleased with the decision to continue the rollout during COVID. We've now got 4,200 stores deployed, and I think we said in the commentary that same store sales are up well into the 20 plus percent range. And again, that was even better than last quarter. So I think we've got a good formula to work on, have we got it completely figured out in terms of the food culture, managing the spoilage, making food at the right time, all those things that are so important in food. I'd say that's a journey that'll continue. But again, very pleased, we're ahead of our projections, ahead of our plan for the year, and we are seeing benefit across the store. It's one of those things that if we get right, and we have some other people in the industry have shown us. If you get it right, you can influence a consumer to turn left instead of right. And that's the journey we're on. And again, I'm sitting here today very pleased with where we're at.

That's great. Thank you.

Thank you. Next question will be from Mark Petrie at CIBC. Please go ahead.

Yes. Thanks. Good morning. You called out promotional activity as a tailwind for your business, and I know that's been an ongoing journey for you, but was there something new that you're doing, or is it more of a continuation? And obviously it's not a project with a specific end date, but how far along are you in those efforts, maybe perhaps relative to the targets that you shared at your Investor Day last year?

Yes. Mark, on promotional activity, I would say the journey we've been on to let data drive our decisions continues, and I would say generally on track with where we communicated from the Investor Day. I'd say the one, maybe headwind we've had is just retaining data scientists. It's been a hot commodity, a hot field, and so the turnover we've experienced in that group, particularly domestically has been a little bit more difficult. We've set up an office in India, and we've been very pleased with the talent we've been able to source there. And so we think that will in the coming quarters stabilize that team and then continue to allow us down that journey. And really that's just – it's really using data to drive our discipline to what promotions really make a difference and which ones are noise. And so you are seeing and should see fewer promotions, but more effective promotions, which should result in both higher sales and higher margin over time. I'd say, the other piece that's happening is, is just with the inflation and we know the consumer's sensitivity to price has been heightened. And so we're doing, I think a few things out there that hopefully convey strong value, whether that's take home, soda packages, some of the things we've done around fuel, that wouldn't have been our norm, so fewer bigger to create that value perception, not just perception, but deliver value back to our loyal customers.

Okay. Appreciate that. Yes, go ahead.

Claude, do you want to add.

Yes. Maybe on the second part of your question, we put the range out for you at $115 million to $210 million of the achievement on that initiative. And we're really – we're well into the range and close to the high point of that target in terms of the benefits from that program.

Okay, perfect. Thank you. Switching gears, I wanted to ask about the M&A landscape. You've spoken about more deal flow and multiples being sort of closer to your target range. Any update on that? And I know you've said that you see the energy challenges in Europe as transitory, but does that affect your thinking at all?

So on the European, no, again, I view that as transitory, and quite honestly, it probably applies some pressure to some businesses and that's been historically good for us. The balance sheet as Claude said is very strong, the appetite's there. And I guess I just reiterate the comments I've had from prior quarters, until there's a deal, there's not a deal. But we continue to be pleased with the deal flow we're seeing. And I think, it's a question of timing, but I'm cautiously optimistic that this environment with tighter credit, a little higher interest rates, will be better for Couche-Tard than it has been the last three or four years where there's been a lot more competition.

Okay. That's great. I appreciate the comments. Thanks.

Sure.

Thank you. [Operator Instructions] Next question will be from George Doumet at Scotiabank.

Yes. Good morning guys. Just to follow-up on the store, can you maybe give us a sense of how U.S. same-store sales performed through the quarter, and can you also give us a little bit of sense in terms of basket versus traffic and within the basket how much price that we take in the quarter? Thanks.

Yes. Actually the results were pretty consistent in the quarter, the exception being Florida. Florida is a large market for us, 800 stores. It was clicking along at ninth mid single-digit, and end of the quarter really at zero. And that's purely the effect of two hurricanes during the quarter. But I'd say pretty consistent. Traffic relatively flat, maybe just down a bit, so basket being very strong and that's just our continued push to make sure that we're pushing price appropriately and recovering the inflationary pressures that we see whether that be on wages or energy or the three buckets that Claude went through. So again, trying to be surgical there not drive the customer away, communicate value where appropriate, but also recover costs. And yes, as of right now, I feel we're doing a good job at that. We're seeing, again, strong demand continue into the next quarter so far.

Thanks.

And George maybe just to add also the success of our Fresh Food, Fast program also is starting to show up in our same store sales, so that's what's driving also the basket, so we're very pleased with the results, we seen in Fresh Food.

Thanks, guys.

Thank you. Next question will be from Martin Landry at Stifel. Please go ahead.

Hi, good morning. I just want to touch on your volumes, your fuel volumes in Canada. It looks like they worsen versus Q1 despite gathering prices declining. And if we look at the U.S. you had a bigger decline in Q1 and smaller decline in Q2. So I'm just trying to understand what's happened in Canada. Is there something specific that you can point to explain the larger decline in the lack of correlation with the U.S.?

Yes. We were minus 6.5 in the quarter, so that is soft. So we're taking some efforts, like we have in the U.S. to I think be a little more tactical, a little more gorilla warfare and delivering value to the customer without changing the price might be risky depressing the market. So you'll see more activity in the coming quarters in Canada. If you look at our weakness, it's really concentrated in the East, so I'd say Quebec in the Maritimes. We've got some work to do on harmonizing our brand position there. That's a little bit of a longer term opportunity for us. But that's where we're going to focus our efforts. When I look at Ontario and West, I think we performed very well when you look at Parkland or other public comparators. And so it is fairly isolated to a small part of the country. And again, I'll remind that Canada's 12%, 13% of our total global volumes relatively small. But that aside, we're focusing more on that customer and that value proposition in the eastern part of country in the coming quarters.

Okay. Thank you.

Sure.

Next question will be from Peter Sklar at BMO. Please go ahead.

Thanks. Brian, can you elaborate on the new loyalty program you're piloting in the U.S.? Just talk a little bit about it and explain the new tiered concept that you're experimenting with as well?

Yes. So we've had loyalty products across the network of varying degrees. And we've had – one that in Europe has had very deep penetration, but quite honestly, we've challenged ourselves to say, hey, can we go beyond just having another key fob in your pocket or another number, another buying club. And so done a lot of research with partners and selected Brierley as our partner developed the current program and really focusing on the fact that our industry is so much driven by the heavy users. There's different segments, different names for these customers, but we've got a very, very strong group of consumers in our industry that just drive a tremendous percentage of the volume. And so without getting into the details of how, I think the why is, we're going to make sure that the customers that can deliver the most value to us get the most value from us. And where we've launched that and piloted that now in three countries in Europe and a small market in the Carolinas, we've seen very strong net promoter scores and very strong penetration of enrollment both on fuel and merchandise. I think my frustration is that, you know, we wish we had it deployed more broadly and that's really just been a technical issue, getting the engine to work with our various POS platforms that we've got, particularly in the United States. So we're excited. I think the benefit of being delayed a bit is, I think we've really optimized at store level, what the consumer messaging is, how do we get people to sign up, how to motivate our staff to drive enrollment, so we're ready. And again, cost is optimistic that we've got something that will differentiate in the future.

Okay. Thank you.

Thank you. Next question will be from Bonnie Herzog at Goldman Sachs. Please go ahead.

All right. Thank you. Good morning. I actually wanted to circle back to Europe real quick. As I guess I was hoping for maybe a little more color on the consumer behavior and really some of the initiatives you've implemented in light of this, for instance, are you seeing more down trading and pullback on spending? If so, are you increasing your promotional spend to help mitigate that? And then also curious to hear the behavior at the pump, our consumers possibly not filling up, but possibly coming more frequently. And then finally, what are you seeing in terms of shift in channels within Europe? Are other channels possibly benefiting from some of these consumer pressures? Thanks.

Yes. Thanks Bonnie. I'll start with the fuel side. So there has been a mark change in behavior, and again, I want to repeat, repeat, repeat. We view this as transitory, temporary. We're seeing both lower penetration of premium sales and lower leaders fulfill about 15% lower. But we're seeing more visits. So net-net, volume down mid single-digit, visits up 2%, 3%, but the average fill down 15% or so. And that's pretty consistent across the countries. Those visits have actually translated into the store holding up pretty well. You see us – I think we were plus 2.9 or something close to that for the quarter. And that's with – pretty solid traffic underlying that. So when I look at inside the box, the behavior hasn't been as noticeable in terms of trade down as you asked. Our food continues to perform very well, beverages continue to perform very well, and we don't have the same just because the lack of scale in some of these smaller countries, we don't have the same penetration of private label. So we've seen the brands continue to hold very well. Then when I've asked the question how are we doing vis-à-vis other channels? And when I look at the three big Scandinavian countries where I get the best data, I've actually say the channels fared very well vis-à-vis grocery, which is our main comparator in those countries. And so, yes, I'm pleased with our results. All the data I see says we're taking share, but there's no doubt, and again, I was in a recent visit, it's pretty stark difference from what we're experiencing here in North America. I mean, societies really buckled down to get through the winter and everybody's doing their part to just minimize their energy demand and that includes driving.

Okay. Thanks for that color. Appreciate it.

Sure.

Thank you. Next question will be from Anthony Bonadio at Wells Fargo. Please go ahead.

Hey. Good morning, guys. I just wanted to ask about the new to industry stores. I know you mentioned rising costs, supply chain constraints sort of slowing your ambitions there. So can you just talk a little bit about what growth might look like given in more favorable environment? And then you also mentioned strong merge sales and volumes in those new stores. Can you just talk about what you might be doing in those newer units that's driving outperformance there?

Yes. Anthony, I'll take the last part first. We've got a store model that we've deployed really the last year that is a big part of what we learned in holiday that really flows the customer through our store, you enter in the food area, so the coffee dispense beverage bakery into the sandwiches, you rotate through that takes you into the cold vault both beer and other, and then you end up in the impulse section as you approach the checkout. We've had extraordinary good luck with these. We've retrofitted a few stores just to see the impact of that as we played with design. And it just drives really strong basket improvement. So that's a model we've been deploying, been very pleased, as I said in the commentary with both our results in volume and inside the box, you look at the mix, food just does better. And we've got significantly more cold doors than we would've had in our traditional build, and we just think that's an industry differentiator, that we can continue to provide and really excel at meeting that first occasion piece of the other industries. .:

That's helpful. Thanks so much.

Thank you. Next question will be from Derek Dley at Canaccord Genuity. Please go ahead.

Hi. Thank you. Good morning. This is [indiscernible] on behalf of Derek. Just a quick question from our side, just on the fuel volume side, circling back to that, what drove the softness here? Was it more of a function of the higher fuel prices or is it a silly to remote working conditions and general less movement doing framework?

Is your question U.S. specific or Europe?

Across the territory, yes.

I think I've covered Europe pretty well. I mean, it's high energy prices again, transitory and I think covered Canada fairly well. That's an Eastern Canada phenomenon, I'd say in the U.S. I feel good about our performance. There's a couple value players that I think are getting a disproportionate share on the temporary basis. But when I look at our results versus what we see out of Opus, out of EIA, out of the phone company data on movement, I think we're performing well. I think demand is still not where it was pre-COVID. We've still got a certain segment of society that's not gone back to the office five days a week. But that just continues to slowly recover. And I think as we continue to work on building the Circle K brand and making that more value to our customers and innovating with pay by plate in our loyalty platform, our goal is to slowly take share in the fuel space and we feel good about the journey, we're on to do that.

Okay, great. That’s very helpful. Thank you.

Thank you. This concludes the Q&A portion of the conference. Mr. Lachance, back over to you. Jean-Philippe Lachance: Thank you, operator. Thank you, Brian. Thank you, Claude. Thank you all for joining us. We wish you a great day and look forward to discussing our third quarter 2023 results in March.