Good morning. My name is Joel, and I will be your conference operator today. [Foreign Language] I will now introduce Mr. Mathieu Brunet, Vice President, Investor Relations, and Treasury at Alimentation Couche-Tard. [Foreign Language]

[Foreign Language] [Interpreted] Good morning. I would like to welcome everyone to this Web Conference Presenting Alimentation Couche Financial Results for the Second Quarter of Fiscal Year 2025. 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 maybe 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. Alex Miller, President and Chief Executive Officer; and Mr. Filipe Da Silva, Chief Financial Officer. Alex, you may begin your conference.

Thank you, Mathieu. Good morning, everyone, and thank you for joining us for our presentation of our second quarter results. While parts of our Convenience and Fuel business continued to be challenged this quarter as consumers carefully watch their spending. We remain confident in the advantages of our globally diversified network and long-term strategic growth plan. In our European markets, most categories performed positively, as did fuel volumes in Europe and Canada. Fuel margins also remained healthy across the network. Throughout the quarter we focused relentlessly on providing value to our customers, including introducing bundle meal deals in the U.S., expanding our private brand offer at affordable price points and continuing popular Fuel Day promotions. Later in this presentation, I will go into more detail on these initiatives, as well as on our convenience and mobility results. However, before I do so, I will touch on two notable areas of the quarter; the catastrophic hurricanes in the U.S. and our global efforts to grow the network both through M&A and organically. I want to start-off by acknowledging the heroic work of our teams across the Southeastern U.S., who had to contend with two major hurricanes, hurricane Helene and hurricane Milton, which impacted four of our business units within two weeks of each other. The hurricane shutdown hundreds of our stores, mainly due to power loss, but thanks to the extraordinary effort of our operations, fuel, facilities and logistics teams, we were able to open all, but a handful of them within a few days, make sure all our team members were safe and provide our communities with essential goods and services. This took massive coordination and outstanding dedication by thousands of team members and I could not be more proud of how as one team, they helped each other and our customers and communities. I also want to briefly mention our ongoing commitment to acquire Seven & I Holdings. No doubt you have seen much in the media about our most recent proposal to purchase the entire business, as well as our visit to Japan to learn more about its store operations and to meet with key stakeholders. We continue to see a strong opportunity to grow together and enhance our offerings and service to millions of customers across the globe. We also remain confident in our ability to finance and complete this combination. We will be persistent and continue our friendly approach to creating what we see as the most compelling outcome for all shareholders, employees and key constituencies of both companies. While discussing M&A, let me briefly mention the good progress we are making with GetGo, which we expect to close in calendar 2025. I and members of the executive team spent a very productive few days with the GetGo management and employees in September, visiting stores and facilities. We are excited about our early learnings about GetGo's extremely popular food and loyalty programs and dedicated team members. We also recently completed a small tuck-in purchase agreement in the U.S. with 20 stores in Oklahoma and Kansas, bringing our Circle K presence back to these two states. Moving to Europe. We are pleased with the ongoing work with our four new business units as they successfully transition out of a complex carve-out with TotalEnergies. The teams are highly energized and engaged and are making good progress with store rebranding and integration plans. In organic growth, we continue to make strong strides on our 500 new store build goal. We opened 14 stores this quarter and we are on track to open over a 100 in North America this fiscal year. As part of our strategic growth ambition, our new stores include dozens of high speed diesel in rural locations. Now let me get back to our quarterly results starting with Convenience. Compared to the same quarter last year, same-store merchandise revenues decreased by 1.6% in the United States, by 1.5% in Europe and other regions, and by 2.3% in Canada. As I mentioned earlier, in our European businesses, most categories performed positively with same-store sales increasing by 1.8%. However, the overall Europe and other region results were again impacted by weak results in our Hong Kong market, driven by decrease in cigarette units and increased sales taxes. Again this quarter, as challenging inflationary conditions persisted, we have been relentlessly focused on providing customers with value, both inside our stores and on our forecourts. In October, in the U.S., we launched our $3, $4 and $5 meal deals. We are encouraged by early results. After only six weeks, over 300,000 meals are being sold on a weekly basis, accelerating traffic and unit growth. While meal deals have become common in QSRs, we can differentiate ourselves through partnerships with our suppliers by offering a variety of options including energy drinks and chips that are not available at QSRs. We are also providing value through an expanding array of private label products, which are increasingly popular with customers looking for savings, but still wanting good quality and taste. Private label is growing for us in the high-single digits across the network and we are looking to add over 100 private label products this year. Reoccurring fuel days continue to provide value to our customers at the pump, while also driving traffic to our locations. Last week we had about 5,000 locations across the U.S. participating in a Circle K Fuel Day, offering a Thanksgiving discount of up to $0.40 per gallon. With the holidays being full of busy celebrations and cost, we are proud to offer our customers a meaningful way to save. This quarter we also grew our loyalty membership programs in the U.S. and Europe. In the U.S. inner circle registrations and full enrollments reached 8.3 million fully enrolled customers, representing a 12% increase from the previous quarter. We continue to see a sales lift through increased personalization, making a key focus of the team, and in the coming quarters, we are committed to simplifying our signup process to drive even greater signup conversion. We are also linking our Easy Pay Fuel program with Inner Circle to unlock additional benefits to our customers and provide a more frictionless single card experience. In Europe, active members in our Extra program have also increased, particularly in our Scandinavian markets where we have integrated more closely with our strong EV charging business. In Sweden, the recently launched Extra 2.0 pilot is seeing a lift in both traffic and increased margin and we are planning to scale it across Sweden and additional countries in Europe. In the U.S., our popular summer beverage campaign continued into the beginning of this quarter. While it provided exceptional value and exciting exclusive flavors leading to unit growth in dispensed beverages, the compelling value did once again compress margins this quarter. In the adult beverage category, we experienced continued momentum with sales slightly down compared to the prior year while unit velocity showed growth. This performance reflected ongoing efforts to drive value through singles and capitalized on favorable industry trends, particularly growing customer enthusiasm for Mexican imports. Starting at the beginning of the quarter, following a change in legislation in Ontario, Canada's largest market, we have been able to offer a selection of beer, cider, wine and ready-to-drink alcoholic beverages in our eligible stores. To take full advantage of this opportunity, our team carefully allocated the proper space in a timely manner. We now command an impressive market leadership in beer sales in Ontario. In cigarette sticks, we are seeing some stabilization in the U.S. and we continue to outperform our competitive peer group. This is partially due to our price optimization efforts along with taking advantage of our scale to expand our portfolio of affordable products in a profitable manner. We also continued personalization programs for our age verified customers. In other nicotine products, strong growth continues across the U.S. and Europe. Moving to our Fuel business. Same-store road transportation fuel volumes decreased by 2.2% in the United States, impacted by lower industry demand and those two major hurricanes, while it increased by 1% in Europe and other regions and by 5 or -- excuse me, 0.1% in Europe and in other regions and by 0.5% in Canada. As I mentioned earlier, our fuel margins remained healthy across the network as we continue to work on building value from our fuel supply chain and serving our customers through lower cost sourcing options. Our Europe B2B fuel business had a solid second quarter with overall card volume slightly ahead of prior year. The Truck segment is showing resilience and maintaining national volumes in the legacy business units, while international volumes have seen strong growth, driven by changes in bio rates in Sweden and early wins in the new mid-European markets. In Fleet, we continue to focus on developing our customer portfolio. The B2B fuel share in the U.S. continues to grow quarter-over-quarter as we develop customer relationships with fleets of all sizes, enhance the B2B driver experience through specific B2B driver benefits on Inner Circle and expand our reach by developing and implementing strategic partnerships. Our EV fast-charging network in Europe now consists of over 2,900 charge points. We had a 65% increase on transactions on Circle K branded transit chargers from the same period last year, driven both by networking expansion and improved utilization. We also continue to expand the charging network in the mid-European markets, as well as in Ireland. In North America, we continued with a disciplined approach to network expansion. I also want to mention some of the work that we are doing to improve operational excellence, reinforcing our approach as a low cost operator. In North America, reducing shrink is an important focus for us, and we are bringing in prevention technology as well as strategic vendor partnerships that can assist in identifying shrink via store surveillance systems. We are also looking to expand our gig worker partnership to improve our food program execution and grow our sales. Filipe will provide additional color on our cost management including our Fit to Serve initiatives. Coming back to where I started, fully recognizing the continued strain on our customers' discretionary spending. I am pleased with the many ways, we are providing meaningful value while keeping our focus on driving traffic to our locations. We remain confident in the strength of our globally diversified network and long-term strategy and are encouraged by signs of positive momentum in parts of the business in both Convenience and Fuel. And with that, I'll turn it over to Filipe.

Thank you, Alex. Good morning, everyone. With a little over a year in my role as CFO, I witnessed this resident organization tackle significant challenges from elevated interest rates, high inflationary pressures, and disruptive survival challenges, impacting our global network. I'm impressed of how we have come together to overcome some of these headwinds, delivering solid revenue growth as we continue to integrate our recent acquisitions and gain market share in key categories. Throughout the second quarter, we saw sequential monthly improvement, particularly in U.S., same-store merchandise revenue, and are encouraged by this positive momentum as we enter the third quarter. However, as Alex mentioned earlier, it's worth noting that the hurricanes affected our performance during the quarter on both our merchandise revenue and food volumes sold. Excluding this impact, we estimate that U.S. same-store merchandise revenues would have aligned closer to our Q1 results. In addition, our focus on operational excellence and disciplined cost management drove a modest 2.3% of normalized growth in expenses, enabling us to outpace a slowing inflationary environment. We are also pleased to see impressive results coming from our Fit to Serve initiatives, further enhancing our world class cost culture and efficient approach to spending. More specifically, we continue to leverage our size and scale and data driven approach to optimize costs across our network and store operations, as we continue to invest in technology. This includes more efficient marketing, repairs and maintenance spend and renegotiating financial fees. With regards to our store operations, we continue to improve labor management and reducing utility consumption, while advancing our global capability networks. All of these initiatives are contributing to improved operational efficiency. 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 second quarter of fiscal 2025, net earnings attributable to shareholders of the corporation were nearly $709 million, or $0.75 per share on the diluted basis. Excluding certain items described in more detail in our MD&A, adjusted net earnings attributable to shareholders of the corporation were approximately $705 million or $0.74 per share on an adjusted diluted basis, representing a decrease of 9.8% compared with the corresponding quarter of last fiscal year. During the second quarter, excluding the net impact from foreign currency translation, merchandise and service revenues increased by approximately $272 million or 6.6%, primarily attributable to the contribution from acquisition, which amounted to approximately $329 million, partly offset by softness in traffic. Excluding the net impact from foreign currency translation, merchandise and service gross profit increased by approximately $76 million or 5.3%. This is primarily due to the contribution from acquisitions, which amounted to approximately $109 million, partly offset by softness in traffic. In the United States, our merchandise and gross -- service gross margin decreased by 1% to 33.8%, impacted by the promotional efforts to support our ongoing campaign, while it increased by 0.4% in Canada to 33.6%, impacted favorably by a change in product mix -- in product mix. In Europe and other regions, our merchandise and service gross margin decreased by 0.4% to 38.2%, impacted by the integration of certain retail assets from TotalEnergies, which have a different product mix than our other operations in Europe and other regions. Excluding this impact, our gross margin in Europe and other regions would have increased by 2.1%, driven by a favorable change in product mix from lower cigarette revenues in Asia. Moving on to the Fuel side of our business. In the second quarter of fiscal 2025, excluding the net impact from foreign currency translation, road transportation fuel gross profit increased by approximately $128 million or 8.8%. This is mainly attributable to the contribution from acquisitions, which amounted to approximately $181 million, including the favorable impact from the renegotiation of the fuel supply agreement with a vendor of which $38 million is related to previous quarters, partly offset by the decline in road transportation fuel gross margin in the United States. Our road transportation fuel gross margin was $0.4601 per gallon in the United States, a decrease of $0.3046 per gallon, a healthy margin in a competitive and well-supplied market environment and in Canada, it was it was $0.1335 per liter, the decrease of $0.28 per liter. In Europe and other regions, it was $0.1051 per liter, an increase of $0.31 per liter, impacted by the retroactive adjustment which had a favorable impact on lower transportation fuel gross margin of $0.88 per liter, partly offset by the impact of a change in our world sales activities. Now looking at SG&A. For the second quarter of fiscal 2025, normalized operating expenses increased by 2.3% year-over-year. This is mainly driven by inflationary pressures and incremental investment to support our strategic initiatives, partly offset by the ongoing effort to control our expenses, including labor efficiency in our stores. More specifically, we reduced store administration through refined protocols and increased back-office automation. U.S. store associate overtime costs were reduced just as we have also achieved an improvement in manager overtime spend in the first half of FY ‘25. Excluding specific items described in more details in our MD&A, the adjusted EBITDA for the second quarter of fiscal 2025 increased by just over $36 million or 2.4%, compared with the corresponding quarter of fiscal 2024, mainly due to the contribution from acquisitions, which amounted to approximately $158 million, partly offset by lower raw transportation fuel gross margin and investments in merchandise and service gross margin in the United States, as well as by the softness in traffic and fuel demand, as low income consumers remain impacted by challenging economic conditions. From a tax perspective, the income tax rate for the second quarter of fiscal 2025 was 23.4% compared with 22.8% for the corresponding period for fiscal 2024. The increase mainly stems from the impact of a different mix in our earnings across the various jurisdictions in which we operate. As of October 13, 2024, we recorded a return on equity at 19.1% and our return on capital employed stood at 12.3%. During the fiscal year, our leverage ratio decreased to 2.07. During the fiscal year, our leverage ratio decreased to -- sorry, we also added -- sorry, we also had strong balance sheet liquidity with $2.2 billion in cash and an additional $2.7 billion available through our main revolving credit facility. During the second quarter of fiscal 2025, we repurchased 8.7 million shares for an amount of nearly $519 million. We also repaid our Canadian dollar denominated senior unsecured note for $700 million and settled the cross currency interest rate swaps associated with the notes which had an inferable fair value of nearly $52 million of settlement. On August 16, 2024, we entered into a binding agreement to acquire 270 company-owned and operated convenience retail and fuel sites operating under the GetGo Cafe + Market brand from supermarket retailer, Giant Eagle Inc., for a purchase price of approximately $1.6 billion, subject to post-closing adjustments. GetGo sites are located in the states of Indiana, Maryland, Ohio, Pennsylvania and West Virginia, in the United States. The transaction, which would be financed using our available cash and/or existing credit facilities, including our United States commercial paper program is expected to close in calendar year 2025 and is subject to customary closing conditions and regulatory approvals. Turning now to the dividend. The Board of Directors declared yesterday a quarterly dividend of $0.195 per share, an increase of 11.4% for the second quarter of fiscal 2025 to shareholders on record as of December 4, 2024 and approved its payment effective December 18, 2024. With that, let me reiterate a few key points. We are maintaining a solid momentum as we head into the third quarter with cautious optimism about the macro environment and consumer outlook. We continue to gain market share in key categories and capitalize on our recent acquisition while maintaining operational excellence. We are focused on pursuing growth opportunities, leveraging our strong balance sheet and maintaining a disciplined capital deployment to support our proven long-term goal of creating value for our shareholders. I thank you all for the attention. I will turn the call over again to our President and CEO, Alex Miller.

Thank you, Filipe. With the many economic challenges across the globe, these are not easy days for our customers. As we are on the eve of Thanksgiving in the U.S., I just want to close by saying thank you. Thank you to our store and field team members for your commitment to making our customers' lives a little easier every day and thank you to our valued customers for visiting us and seeing first-hand our efforts to provide you with compelling offers. I also want to thank our shareholders for your continued support of the business. For all of you in the U.S., I hope you have a wonderful Thanksgiving filled with family and friends and if you need any last minute items or fuel to get to your destination, come visit our locations as we are open. On that note, let's turn it over to the operator to answer analyst questions.

Thank you. Ladies and gentlemen we will now begin the question-and-answer session. [Operator Instructions] Your first question comes from Michael Van Aelst with TD Cowen. Your line is now open.

Thank you, and good morning. Question first on the same-store sales performance in the U.S. and the promotional activity that came along with it at the same time. I think last quarter you talked about higher levels of promotional activity and that was going to be limited to Q2, but we saw that again in Q3. Can you talk about how, I guess why the promotional activity was extended and was it any different? And then, was that directly tied to the improved performance on the same-store sales as you exited -- as you went through Q2 and if you're positive heading into Q3?

Yeah. Sure, and thanks for the question. Our plans had especially around our dispensed beverages, they were summer campaigns kind of into the fall and that was always the plan. So those dispensed beverage campaigns continued through a fairly sizable chunk of this last quarter. Those have now ended. I think we're getting increasingly better with our data sets, increasingly faster understanding our promotions. As a result, we have shut down quite a few promotions activity and we're seeing the results of that over the last eight weeks or the first eight weeks of this quarter. And it looks like the things that we are doing are working. So I think you'll see a difference going forward and we feel really good about the traffic we drove, the unit growth we drove, the value we showed and now we're pivoting to our meal deals. Those are being really well received. They're growing exponentially week-on-week and we believe we've just scratched the surface. The margin profile of those meal deals are more attractive than what we were doing over the summer. And again, I think we're encouraged by the first eight weeks of this quarter.

Okay. Great. Thank you. And can you just quantify the impact of the hurricanes as a follow-up?

Filipe?

Yeah. It was -- we estimate the impact of roughly 40 basis points in our same-store sales in U.S. and -- that for the merch and for the volume actually to estimate that as 70 basis points actually.

Okay. And I'm not sure Alex answered this, but heading into Q3, was same-store sales in the U.S. positive?

First eight weeks was so good.

Yeah.

Okay. Thank you very much.

Yeah.

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

Yeah. Thanks. Good morning. I guess, I wanted to ask mostly about the cost control initiatives. Obviously, Q1 was a little bit of an aberration with regards to the organic SG&A increase that came under or that I guess sort of normalized in Q2. Could you talk about the dynamics there, was there sort of an incremental action or was this just sort of the natural ebb and flow of the business?

Yeah. Hi. And thank you for the question. Yeah. As we mentioned a few times, our mid long-term goal is always to beat inflation by 1%. So quarter-to-quarter, you -- as we have seen in Q1, we had some impact related to the investment that we are doing in some part of the business and here in that case was a technology. But when we look at the overall cost, we feel pretty good about our Fit to Serve initiatives. We have mentioned that earlier in the call, but we see a lot of good stuff happening at in-store. So for example, to provide some more data, we have used 3% less hours than last year in store. So a lot of it is happening in terms of automation being streamlining processes, continuing with this easy office project to remove back office tasks from the stores and to put it on the shared service center. We see a lot of, I would say, also good initiatives around the GNFR and centralization of the negotiation on the contract for GNFR. So on the marketing side, electronic payments, so we have gone through some a good negotiation to pay MasterCard, Visa, Routing, Amex, WEX (ph) contract. So also a lot of savings coming from there. And finally also on the global functions, we see cost going down compared to last year. So that's coming from also the centralization, the shared service center that we are putting in place. So overall you see many initiatives that give us very good comfort that in terms of control -- cost control, but we'll continue to deliver, that we have this cost discipline in our DNA. So we are very confident that the cost will help us to go through this challenging time on the topline.

Yeah. Okay. That's helpful. Thank you. And if I could just follow up on the comment earlier with regards to the beverage program through Q2 and the investment there, how did that program perform versus your expectations with regards to both the topline impact and then the net impact?

It absolutely grew units, which is -- and it grew trips to our stores, which was the intent. It did not -- the basket associated was not what we expected, and as a result of that, it impacted our sales and it impacted our margin. It was about 80% of the margin miss, so that's the color.

Okay. Very helpful. And sorry, I just -- I didn't actually hear, what you were saying with regards to Q3 and the momentum on Mike's question. What is Q3 to-date positive or when you say improved momentum, you just mean not as negative on U.S. merch same-store sales.

Looks good. Looks good. It's positive.

Got you. Thank you. All the best.

Thank you.

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

Thanks, and good morning, everyone. If we could just turn to Europe for a moment. Certainly, when the assets were acquired from Total, I think you referred to it as sort of a carve-out, which is really what it was. Can you talk about where you stand right now in terms of stabilizing the business and are we now at the point where you can actually start putting the Circle K programs into the Total network in Europe and how we should think about sort of the rebranding going forward.

I can talk if you want.

Thank you, Irene. You want to take it, Filipe?

Yeah, I can. So on the integration of Total, Irene, we -- it's moving at pace. We feel very good. As you have seen the result on the -- on this parameter is improving quarter-over-quarter. In terms of integration, so we have focused a lot of attention in the first quarters to make sure that we are integrating in terms of back office, finance and that's happening there. Of course, at store level, we have already started to put in place pilots with our Horizon concept in the four markets -- in the four BUs. Results are promising there too. So feeling good about that. And when we look at, I would say, the roadmap for the synergies, of course, it's -- it takes some time and we need that we'll see the full impact of the synergies better on year two or year three. But we see, we are very confident that both in terms of merchandise, we'll see a nice uplift there. On the cost side also, both at store and corporate level, we'll see also great synergies coming from there. So overall, feeling good and the team also, most importantly, have integrated well, starting to share and to get best practice from other parts of the business. That's something that is very important in our culture. So, yeah, feeling good about the plan that we have there and the execution so far. Alex, anything that you want to add?

Yeah. No, I think, Irene, we've started to retire some of the SLAs. We'll retire a couple more of them by the end of this calendar year. That realizes cost synergies, but it also enables other synergies as we take over accounting in different functions. So I think we're encouraged by that. The longest pull in the tent is IT and we just finalized our plan to accelerate that over the next 24 months and excited. So I think we're feeling good about our journey with Total and hopefully -- and we believe we see it in our results and you see it in our results and I think we'll start reporting on synergies next quarter.

That's really helpful. Thank you. And then just as a follow-up, on the Hong Kong piece, recognize its small but, any line of sight on when that drag will sort of not be a drag anymore.

Yeah. Hong Kong is doing better. But the drag of the cigarettes, I mean, they basically doubled cigarette prices in two years. So we'll cycle that kind of the end of this fiscal. So assuming we don't get another tax increase or something else, we should cycle that about the end of this fiscal, Irene.

That's great. Thank you.

Please limit yourself to one question. Your next question comes from Luke Hannan with Canaccord Genuity. Your line is now open.

Thanks. Good morning. I wanted to ask about you've talked about some of the reverse synergies that you expect to get out of GetGo and I'm curious to know, as far as the food program and the loyalty that they have, what do those specific programs have that or unique and differentiated versus maybe some of the other acquisitions that you've done in the past where you've gotten perhaps similar reverse synergies.

The Cafe market concept that they deploy is a holistic food offer with ordering screens. It's much more like a Sheetz or a Wawa you would see in the market. So it is -- it's different than anyone we've ever acquired. It's certainly different than our fresh food fast. The fresh products that they bring in from their commissary is robust, very high quality products. So again, just a very broad breadth of food and fresh products underpinned by supply chain. Their loyalty flywheel with their grocery stores and the technology that backs that up is compelling. If you go to those markets, it really resonates with consumers. You absolutely see that in their per-store volume. So we think there's a lot of learnings to how that program works and we're really excited about the forward partnership with Giant Eagle. I think the more we work with them, just the cultural fit and the way we're engaging, we feel really good about it.

Thank you.

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

Hi. Good morning, guys. I would like to touch on the merchandise margin in the U.S. It's been soft for several quarters and I understand some of that comes from high promotional activity. But I was wondering, if you could refresh us or update us on what are your gross margin drivers for the U.S. business for merchandise sales.

I think for us it's all about understanding our data. We talked about it. We knew we were investing very heavily through the summer and we wanted to drive traffic and we wanted to drive unit growth and I think most importantly, we wanted to show value to our customers and we will continue to show value. Again, we're pivoting to meal deals as the way to do that and we like the margin profile and we also, I think -- or we believe that's more compelling. We couldn't be more pleased with the first six, seven weeks of data that we've seen and just the sequential growth we're seeing week on week. When you look inside of our margins, I think we got very heavy on promotional activity, trying to show value and trying to drive sales. The positive of our data capability as we continue to improve, we now have the ability to analyze those promotions very quickly in almost real-time and shut down promotions that are not achieving what we intended them -- for them to achieve. The result of that has been that we're actually seeing increased sales and we're seeing our margin improve.

Also if I can add, we have going on within the Fit to Serve initiative, COGS renegotiation with supplier and that's bringing also some good results in U.S. We are now rolling out also that in other -- in the other regions. But that's helping us through I would say, the data analytics but to sit at the table with suppliers and to get better at negotiating promotions and negotiating basically the run rate terms with our suppliers. So feeling good about also what's happening there and I think that will help us also in the next coming quarters to drive a better GP rate.

Okay. That's helpful. Thank you, and best of luck.

Thank you.

Your next question comes from Chris Li with Desjardins. Your line is now open.

Hi. Good morning. I'm just maybe following up on your comments that U.S. merchandise intra-sales is positive quarter-to-date. I was wondering, perhaps other than, easier year ago comparison and some of the enhanced promotions that are driving high traffic, are you seeing any green shoots or stabilization from the U.S. consumer that gives you some confidence that this momentum that you're seeing is sustainable? Thank you.

Thanks. I think, we believe the consumer is under significant pressure. I don't think we've seen something that suggests that changes or that has changed. I think we're all optimistic and hopeful as we move into 2025 that as interest rates might come down, we might continue to see inflation come down. But I'd say, right now, we -- that consumer is still under significant pressure. It's really -- our focus is on our execution. We are operators at the core. We are laser-focused on fast, friendly, and in stock. Our turnover is at the lowest levels we've ever achieved and our operating metrics are improving period-on-period. We will continue to try and differentiate that way and differentiate through value perception, through our meal deals, our private labels, using our data capabilities in our pricing to show value perception where our customers see it. And also we touched on Inner Circle and our loyalty programs. We are gathering tremendous amounts of data. We are understanding our customers better. We've set up a customer insights through our GCN and the more we know about our customers, we are getting better at how do we show them the value that will make them come to us.

Great. That makes sense and happy Thanksgiving, Alex. Thanks.

Thank you. Appreciate that.

Your next question comes from Tamy Chen with BMO Capital Markets. Your line is now open.

Hi. Good morning. My one question is going back to the OpEx or the SG&A. I just wanted to better understand a specific component of the investments that you need to make going forward if there is something like that. And what I mean by that is I think last quarter, your organic growth was a little high and I think you had called out there were quite a few non-reoccurring items. So when I look at this quarter's organic SG&A growth, those 2.3%, I think that's increased a bit sequentially. Yet you've highlighted you continue to do a good job at reducing and optimizing labor hours. So can you just remind us what are the offsets that are driving this higher SG&A growth? Like, is it digital or loyalty-related spend and is that expected to continue and reflect it in your five year target? Thanks.

Thanks. Thanks, Tamy. And the short answer is, yes. As mentioned earlier and in the past conference, we are investing significantly in tech -- in technology to improve our customer experience at store label, digitizing the experience there, doing a lot also just to strengthen the foundations. The reality is that we have not invested enough in the past on our technology. So at store level, again just making sure that the store can deliver a proper experience to the employee, to the customer, but also at the back officer level ensuring and making sure that we can automatize as much as we can. So I would say, that the biggest component in terms of investment and expense investment is coming from tech, definitely. And that's something that we have embedded in our [indiscernible] And yeah, when we are talking about, in terms of target to beat inflation by 1%, we embed in this target, the investment that we are doing in tech. So the Fit to Serve initiative should fund this investment in tech.

Thank you.

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

Hi. Thanks for taking my question. I just wanted a clarification on the margin. You said, we've removed the heavy promotional activity. We feel like we're getting better at promoting and our margin is improving. I didn't understand, if that was an eight weeks a year-over-year comment or sequential or improving relative to what? And as you reflect on that answer, maybe if you can also just take a step back and help us understand relative to the plan that you announced at the Investor Day, where are you tracking ahead and where are you tracking behind with respect to your initiatives? Obviously, there's a lot of macro underneath the results, so we can't really see the performance and the underlying benefits. Thank you.

Filipe, you want to take that or you want me to?

Yeah. I can start with the 10 for the Win (ph) and what's going well? I think, we feel very good about, when we look at this popular, win the customer, win growth, win the offer and win fuel, win growth, I think it's doing very well. As mentioned by Alex earlier, NTI program, we are running ahead of our plan. We are -- as we know active and we have just announced two recent acquisitions. So we are being very active on that. So feeling good about this part of the 10 for the Win. We are definitely also moving the radiation on the Fit to Serve, already identified the $800 million on the SG&A side. On the win the food and win the food and first, we think that we have the right focus there. Of course, the macro has not helped there, but we believe that we have the plan. We just need now to execute and we believe that the result will come. Food has been growing. The SSS program has delivered positive growth during the quarter. So we are going the right direction, but that's not enough and we know that and we continue. And on the fuel side, we have not mentioned that, but same here of course, there is a pressure on the demand as well. We see that in the fuel volume. But we -- as you remember, we have said that B2B in U.S. will be one of our priority and B2B in U.S. is growing. We have delivered a 5% growth volume on the B2B side of the business in U.S. So that's quite positive in the quarter. We see a number of customers growing in that part of the business and we know that we have a good competitive advantage there having sites across the 50 states of the U.S. So, yes, it's moving in the right direction in that sense as well. Alex, do you want to add anything there?

Yeah. I think, we absolutely believe that the focus areas and our priorities within 10 for the Win are the right ones. And we've remained extremely focused and I think, as Filipe stated, we've got a couple of areas we feel really good about. We are on or ahead of our 10 for the Win plan and in some of the areas, the macro has really not helped us, but we need to accelerate differentiation and accelerate unit growth and accelerate trips to our stores. So that's where our focus is. But we -- the areas we shared, data, digital, thirst, food cost controls, we absolutely believe are the right focus areas, and we continue to be laser-focused on those areas. Your question about margin, I'm talking sequentially.

Thank you.

Your next question comes from Bonnie Herzog with Goldman Sachs. Your line is now open.

All right. Thank you. Good morning. I know it's early, but I was hoping you could touch on how the incoming Trump administration might have an impact on your business here in the U.S., but also internationally. I guess, given what we know and maybe what's been said publicly thus far, what do you see as the biggest areas of opportunity for your business, and then where do you see the most potential risk?

Thanks, Bonnie. It's awfully early days and there's an awful lot of speculation. I think we've looked at a couple things, EBT, as an example. EBT is about 0.6% or 0.7% of our sales in the United States. Some of the things that have been talked about, perhaps half of that, a little less than half of that could be at risk. As an example, we've looked about 3% of our goods today in our stores come from China. So a fair -- a very small amount. Most of that is, or all of that is general merch, specifically kind of phone chargers and things like that and we think everyone would be impacted similarly. So we don't see a big issue with that. There's just so much unknown around what's actually going to happen, Bonnie, that -- for us, it's early days and we have started to consider some things but we don't see anything at this time that we think is going to overly impact us and what we hope is that the consumers around the world can -- inflation goes down and folks can start to feel better about their disposable incomes, but we don't know what's going to happen.

Fair enough, and thanks for the color.

Your next question comes from Anthony Bonadio with Wells Fargo. Your line is now open.

Yeah. Hey. Good morning, guys. Thanks for taking my question. I just wanted to follow up on Total. You called out a $158 million benefit to EBITDA from M&A in the quarter, but it looks like that is gross of a $38 million one-time benefit related to that fuel supply renegotiation. So one, am I thinking about that latter piece correctly? And two, can you just help us understand where Total is not running versus that initial $500 million EBITDA run rate when you guys announced the deal?

So, your reading is correct and $38 million are related to previous quarter and when you look at the TotalEnergies and where we stand compared to our goal of $500 million, we feel pretty good there now that this fuel supply agreement has been, I would say renegotiated. So yeah, plus the synergy that we mentioned earlier, we are very confident that, yeah, we'll deliver what we said on this acquisition.

Thanks, guys.

Your next question comes from Bobby Griffin with Raymond James. Your line is now open.

Good morning, everybody. Thanks for taking the questions. Alex, just curious on the quarter-to-date improvement, I'm just curious how do you guys look at the environment. Has the environment stabilized because there's a lot of noise between hurricanes, some of the initiatives you guys are doing? And when you saw the quarter-to-date improvement, was it broad based across categories and regions? Any additional color you can offer there would be helpful.

Yeah. I think -- we think the consumer remains under stress. I think, we feel like we're getting better and are executing better. It is pretty broad based across our business units of the improvement. It's -- we always have different business units performing at different levels in different pockets of strength and weakness, but holistically it is broad based. We believe the consumer remains under pressure and we believe we're executing better both operationally and in our 10 for the Win initiatives, and we've talked to you guys a long time about our data and our journey and we are getting better at understanding our data and understanding our customers and we think we're seeing the benefit of that.

Thank you. Have a great holiday to you and the team.

Thank you.

[Operator Instructions] Your next question comes from John Zamparo with Scotiabank. Your line is now open.

Thank you very much. Good morning. I wanted to ask about the fuel side of the business in particular, same-store volumes. Those turned positive in Canada and Europe, but still negative in the U.S. even adjusting for, I think, you've said 70 basis points from the hurricane and I wonder what you might attribute that to? Is there still an element of partial fill-ups from customers? And would you characterize the U.S. fuel market as any more or less competitive than Canada and Europe at the moment?

I think as price comes down, we always see fill go up and that's what we're seeing. Prices coming down and we are seeing average fill rate go up, but the consumer remains stressed. And I think trips, I think they're being very cautious in their trips and their travel. They're reducing travel. Demand remains under pressure. The U.S. remains a very competitive fuel market for sure. So, we think demand will continue to decline in the United States due to vehicle efficiency in the fleet and we have got to take share. And where we're focused on doing that is really in three areas. You heard Filipe mentioned our focus on B2B. We shared that in 10 for the Win. We are accelerating that. I think we feel positive. Our growth this quarter was more than our growth last quarter. We have strong, ambitious -- ambition there and we're largely meeting our target for this year. We have a new pricing tool that we're rolling out right now that we feel really good about. We tested very heavily that we think will help us gain some share. And then the third thing is Inner Circle, is really understanding where that value sits that drives additional trips and will allow us to take share. And as we collect more data and get more folks signed up, we believe that should help us take share. So those are kind of our three big focus areas. But demand in the US remains under pressure.

Okay. Appreciate the color. Thank you.

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

Thank you, Alex and Filipe. That covers all the questions for today's call. Thank you all for joining us. We wish you a great day and look forward to discussing our third quarter 2025 results in March. [Foreign Language]

Thank you, everyone.

Ladies and gentlemen, this concludes…

Thank you.

This concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.