Loblaw Companies (L:TSX) Q3 2025 earnings call transcript

Great. Thanks very much, Danny, and good morning, everybody. Welcome to the Loblaw Companies Limited Third Quarter 2025 Conference. As usual, I'm joined in the room this morning by Pear Bank, our President and Chief Executive Officer, and Richard Dufresne, our Chief Financial Officer. So before we begin the call, I'll remind you that today's discussion will feature forward-looking statements, which may include but are not limited to statements with respect to all those anticipated future results.

These statements are based on assumptions and reflect management's current expectations. As such, are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from our expectations. These risks and uncertainties are discussed in the company's materials filed with the Canadian Securities Regulators. Any forward-looking statements speak only of the date they were made. The company disclaims any intent or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, other than what's required by law. Also, certain non-GAAP financial measures may be discussed or referred to today, So please refer to our annual report and other materials filed with the Canadian securities regulators for a reconciliation of each of these measures to the most directly comparable GAAP financial measure.

And with that, I'll turn the call over to Richard.

Thank you, Roy, and good morning, everyone. I'm pleased to report that we delivered another quarter of consistent financial and operational performance, reflecting our ongoing focus on retail excellence and our commitment to deliver value, quality, service, and convenience to Canadians. Top-line growth continues to be very strong, supported by the opening of 76 stores over the past 12 months, an increase in our retail square footage of 2%. On a consolidated basis, revenue grew by 4.6%, reaching $19.4 billion.

Our drug retail business grew at 3.8%, and our food retail business grew at 4.8% in the quarter. Adjusted EBITDA increased by 7.2% to $2.2 billion, and margin improved by 20 basis points to 11.4%. Adjusted diluted net earnings per share grew by 11.3% to $0.69, and on a gap basis, our net earnings per share increased by 4.8%. In food retail, we delivered higher sales, traffic, and basket growth, once again driving significant tonnage market share gains.

Absolute sales outpaced same-store sale by 280 basis points at 4.8%, reflecting our new store growth, while our food same-store sale grew 2%. The impact from the stores we opened so far has been in line with expectations. We continue to see positive momentum across key categories in the right-hand side of our stores, notably in apparel, cosmetics, and H&E.

That said, Edwin's from liquor specifically and tobacco and our exit from the optical business led to a net 30 basis point negative impact to same-store sale this quarter. Our Q3 internal CPI-like food inflation was lower than Canada's grocery CPI of 3.6%. Our average article price data, or AEP, which reflects our customers' actual basket mix and includes non-food items not included in the CPI basket, was also lower than CPI.

Our lower internal inflation metrics demonstrate that Canadians who shop our stores are finding more value. Cost increase requests from large global vendors continue to trend well above historical levels. In response, we're pushing back harder than ever to ensure that any increases we accept are justified.

Our hot discount banners continue to deliver strong sales growth based on consumers' ongoing focus on value. Momentum continues to build across the hard discount stores we added to our network through conversions and new builds, proving that our strategy is resonating very well with Canadians.

We're also pleased with the momentum and strong performance in our conventional stores, which improved tonnage market share within their conventional sector. This quarter, we announced that Specsavers would be opening 111 locations within Loblaw stores to replace our Theodore and Pringle optical business. Exiting this business resulted in a $30 million adjusted charge this quarter. Going forward, we expect it to negatively impact food same-store sale by an approximate 20 basis points until we lab this transaction, while the exit from the Theodore and Pringle business, coupled with our new agreement with Specsavers, is expected to generate approximately $10 million in annual run rate earnings accretion.

In drug retail, absolute sales increased 4.3%, excluding the impact of the sale of Wellwise, while same-store sale grew 4%. Pharmacy and healthcare services grew same-store sale by 5.9%, driven by broad strength in prescription and new healthcare services. Our specialty drug prescription growth continued to lead our pharmacy performance. Patients continue to respond positively to the convenience and expanded level of primary care we offer through our more than 1,800 pharmacies across the country, including our 209 in-store clinics. We're on track to reach our target of 250 in-store clinics opened across Canada by the end of this year.

Our front store, same-store cells continue to improve, growing 1.9%, reflecting the ongoing strength of our beauty category. This more than offset the impact from the exit of certain electronics category in the prior year, which will no longer be a headwind to same-store sales after the fourth quarter.

We continue to be pleased with the underlying strength, profitability, and sales momentum of shoppers, drug-of-mart, front-store business. Online sales in the quarter increased by 18% across our retail businesses. Delivery continues to lead growth in the online grocery channel, and we continue to be pleased with our online sales penetration in both food and pharmacy. Our retail gross margin improved 20 basis points, led by drug retail reflecting improvements in shrink in both drug and food.

Food trading margins remain stable. Our SG&E rate as a percentage of sales was stable, with operating leverage from higher sales, offsetting incremental costs related to the opening of new stores and the successful ramp-up of our new automated distribution facility in East Gwilinbury. This new DC continues to ramp up ahead of plan. Costs remain lower than budgeted, and we are on track to shift significantly more cases than planned this year.

We have begun fulfilling orders in our ambient section, which is ramping up a full quarter ahead of plan. We're making considerable progress on the construction of our second automated DC in South Caledon, Ontario. The project is on schedule. In the quarter, retail adjusted EBITDA grew 6.8%, and EBITDA margin increased by 20 basis points to 11.1%. PC financials revenue increased 5.5%, driven by higher sales in our mobile shop and higher insurance commission income.

Our PC money spending and savings accounts are performing very well. Customer account deposits increased by $174 million in a quarter. This increase in deposits is evidence of strong customer engagement and helps us lower our bank's funding costs. The bank's adjusted earnings before tax increased by $13 million, or 36.1%, primarily driven by higher revenue, lower operating costs, and favorable impact from our ECL provisions.

We remain very comfortable with the risk profile of the bank's portfolio. We continue to take a conservative position in our loss provisioning with a strong and very well-capitalized balance sheet.

Free cash flow from the retail segment was $325 million in the quarter, and in the quarter we've repurchased $450 million worth of common shares. Our balance sheet remains strong, and we continue to improve our key return metrics. Our return on equity is 24.8%, and our return on capital is 11.9%.

Looking ahead to Q4, while it's still early in the quarter, we are confident our results will be in line with our financial framework. Reflecting our strong performance year-to-date, we now expect fully adjusted EPS growth to increase slightly from high single digits into the low double digits, excluding the impact of the 53rd week. Our assets are well positioned, we are executing well, and we are investing for the future, all while delivering consistent operational and financial performance. I will now turn the call over to Per.

Thanks, Richard, and good morning, everyone. I'm really pleased with our third quarter performance. We continue to generate strong revenue growth through a combination of same-store sales strength and the positive impact of our strategic investment in new stores. This top-line growth of 4.6% allowed us to deliver 11.3% adjusted EPS growth this quarter and will help us support our long-term earnings expansion.

As Richard discussed, we accomplished this while increasing our spending to support the opening and ramp-up of our new stores, the accelerated transition to our new 1 million square foot DC, and the lapping of some real estate gains from last year. This is a clear demonstration of the strength of our business and our ability to deliver consistent financial results.

With our broad footprint, we know many Canadians are looking for opportunities to get the most out of their budgets in this challenging economic environment. And we believe it's our responsibility to deliver the quality, value, service and convenience across every corner of our business. Every day we fight to earn our customers' business. Whether that's through competitive pricing, meaningful promotions, through omnichannel service, or personalized rewards through our PC Optimum program.

As a result, more Canadians shopped our stores and we generated $857 million in additional revenue. In drug retail, we delivered another quarter of positive momentum in our front store sales. Our precise cosmetic continued to be very strong, supported by fragrance and derm categories. Beauty categories remain strong. In pharmacy and healthcare services, we saw ongoing strength in acute and chronic scripts, and in our specialty drop and new prescribing services categories continue to deliver strong double-digit growth. In drug retail, we are enhancing our omnichannel presence, offering our customers more choice and speed.

We're growing delivery through Skip and now Uber Eats and scaling our buy online pick-up and store network to cover 750 stores by early next year. This delivers even greater convenience, supporting shoppers' customers promised to help make lives easier. Across the country, we have now opened 12 new pharmacies and 55 new pharmacy clinics this year, providing an expanded scope of care service to Canadians.

In food retail, same-store traffic was up, and basket growth was positive. This contributed to tonnage market share gains. Our hard discount banners also continue to outperform same store sales growth and drove the majority of our absolute growth. In the quarter, we opened 19 Maxi and No-Foodle stores. With 16 of these being small format stores we are bringing hard discount to underserved urban povests as well as suburban communities We see this as an investment to strengthen our position in what is a long-term consumer trend towards value. Similarly, we saw higher same-store sales growth rates in our superstore banners. Within the right-hand side, we saw strong growth from our general merchandise refresh, and we are also showing very positive results from the right-hand side inspired refresh in our medium-sized stores.

Turn to tariffs. Following the removal of Canadian counter-travers in September, the related cost increases and corresponding tea labels were removed from our shelves as we sold through the inventory. During this time, we received a lot of positive feedback that our efforts were helping our customers make informed decisions. As always, from every challenge comes opportunity. More customers are discovering quality made-in-Canada products, So we continue to support these customers and have now sourced and onboarded more than 200 new Canadian vendors since the start of this year.

We actually believe that this is good for both our customers and good for Canadian producers and manufacturers and good for the economy.

Our digital sales growth remains very strong and our weakly engaged users hit an all-time high as we continue to differentiate ourselves by enhancing customer experience with more personalization and choice. We're excited to have begun launching Uber Eats across our network.

This provides customers with optionality across third-party deliverance providers, which already include Skip, Instacart, and DoorDash. And some of you may have noticed something new on your last shop. Three of our GTA NoFill stores have implemented PCO Go. This is a new feature and is designed to provide a faster shopping experience, enabling customers to scan grocery as their shop with a real-time estimated total of the bill and streamlining their checkout process.

Of course, this has only been less than a week, but we are seeing a 90% OSAT for the customers who have tried this new feature. So feel free to check it out. It's great. We are pleased with the strategic foundation that we have built and are excited about the opportunities that lie ahead. The strength and diversity of our business provides differentiation, unique growth opportunities, and allows us to deliver consistent operational and financial results.

This provides the foundation to make substantial investments today and to accelerate our longer-term growth ambitions. Trade-as-a-service is a great example. Today we are leveraging our existing supply chain delivery infrastructure, enabling us to rent out our empty trucks as a return from the store delivery routes. Next year, this business is expected to generate more than $200 million in EBIT, delivering another year of more than 20% growth.

Similarly, our advanced media business is expected to generate over $100 million in EBIT next year. So we're scaling this business with the rollout of more in-store digital screens in partnership with SlatterCash. Customers like the immediacy and relevance of in-store screens. Whether it's a beauty tip, seasonal promotions, or a great product worth trying, the content feels personal and useful in the exact moment it matters.

So advertisers value the ability to reach 4 million-plus in-store shoppers every single day at the point of decision with measurable impact. A visual example of this growth opportunity is that you will start to see more screens with new content in our stores over the coming months. And we're very pleased with the strategic advantage our rich first-party data provides. It seems every week we're implementing a data-driven solution that allows us to better understand and serve our customers, improve our operations, make smarter decisions, and deliver even more relevant offers. For example, we are now aggregating customer data to guide and optimize space planning for our store network. This initiative is driving a material sales lift, and it ensures each store better reflects the needs and preferences of its local customers.

Our data assets will be a key differentiator for Loblaw's continued success and growth. These examples, plus our PC Optimum Loyalty Program, and our expanding e-commerce business, support higher growth, higher marketing business opportunities that should have a flywheel effect across everything that we do. This year, next, will mark an important milestone in our future growth. We're well on our way in the construction of the second 1 million square foot DC in South Caledon, an identical twin to the East Grillingbury DC that we are currently ramping up. We remain encouraged by the success of our new small format discount stores and the new clinic-equipped pharmacists.

And tomorrow, November 13th, we will be excitedly watching the new opening of our second TNT in the Seattle area. And by the end of next year, we expect to have another five TNT stores open in Washington and California. So our strategy remains anchored by unmatched core assets, excellence in retail operations, and consistent operational financial performance.

So looking ahead, we are well positioned to serve the everyday needs of Canadians today and in the future. I'm excited about the launch of our Holiday Insiders last week. This has been a holiday tradition for more than 40 years in Canada. Our team and I do take great pride in showcasing innovative products crafted so Canadians can celebrate and share the spirit of the season with family and friends. I'll just invite you to try my personal favor this year. I know it's probably always ice cream, so it's the Santa Mills and Cookie ice cream that has been received very well by our customers.

I'd also like to call out the amazing generosity that happens every day in all of our grocery stores across the country. I'm very proud to share that each of our stores is partnered with at least one local school who helps support students with their access to nutritious food, removing a significant barrier to learning. This year, the PC Children's Charity met its long-term goal of feeding 1 million Canadian children.

Thanks to the support of our customers and colleagues, PC Children's Charity is the nation's largest charity direct-to-school food program, where 100% of all customer donations goes to feed the students in their own community. I'd like to thank all members of the Loblaw team for, once again, their tremendous efforts. Your passion and hard work are what allows us to consistently deliver the quality, value, and service that people in your community relies on every single day.

Finally, I will close by letting you know that we have successfully completed the global search for the key role of president for Shoppers Rock Mart. So I'm very pleased to announce the appointment of Gregor Vild Vildsborg as president. Gregor will be joining us January 26th next year, following his transition from Matras Group, where he's currently Group CEO.

He will officially take up his responsibilities on March 16th after a thorough onboarding process. Matras is a public trader health and beauty retailer with over 500 locations across Denmark, Sweden, Norway and Finland. And Gregor is an exceptional leader and retailer with a proven track record in driving growth and performance, digital innovation, and operational excellence. Shoppers has a well-established strategy and leadership team. And I'm highly confident Gregor will help take the organization to the next level.

In making this announcement, I would also like to acknowledge the significant contribution of David Markwell, interim president of Shoppers and head of our technology and analytics group. David threw himself into this interim role with great energy and enthusiasm and has made a tremendous difference. He will, of course, support greater transition until he starts his efficient accountability on March 16th and also continue his role as executive vice president in technology and analytics as well as supporting several key enterprise initiatives.

Yes, that was the end of my script. I know it was long, but I just had too much I wanted to share with you. With that, I'll now open the floor for questions.

Thank you.

Thank you. Good question. On consumer behavior, I would say that we are seeing more of the same. So our promo penetration stays high. It's higher than last year, but it's actually not higher than quarter two. Customers are still shopping more and more in hard discount, but we are not seeing it accelerating. So basically, we are seeing more of the same with regards to customer sentiment. At least that's what we see right now as we speak.

Our food or our grocery same-store sales number, just trust me, it's continuing to be an important number for us, even though more sales will be coming from our new stores and will help fuel our long-term performance. And also I think it's important also to look at our same-store sales in a third of our business in shoppers because there we saw the drop same-store sales at 3.8 and our front-store sales at 1.9, which was the best quarter in nine quarters. And adjusting for the electronics, then we are up at a 3% point of growth in front store. So I think that's how I see it. So I'm pleased with our Q3 performance as we are heading into Q4.

But maybe you have some more you would share, Richard, on this.

Yeah, I mean, so specifically, if you look at same-store sales in Q3, we need to go back to 2024, okay? As you know, we hit some bumps in Q4 in the first half, towards the end of the first half. And so internally, we had to play some catch-up to be able to recover over that bump. And so that led us to be somewhat more aggressive in the second half last year to be able to deliver on our market share objectives.

So now we're comping through that. So that's simply us comping over what we did last year. Having said all that, I think what's key for us is if you look at our total food sales growth of 4.8% and our internal inflation, which is less than 3%, the delta is essentially tonnage growth. So we've been gaining significant tonnage growth. We're on our way to deliver the best market share we've ever had on top of the best market share we had last year. So we feel very, very good about the business. But you're going to see this wonkiness in same-store sale for food for Q2 and Q4 this year.

And I think maybe I'll just add to that, Irene, that how we see customers are changing. And we saw it a bit in Q2, but also in Q3. If you look at meat, red meat market prices are increasing because of commodity prices increasing. And then customers, they do understand how to navigate that because they're not just buying the same as they did last year. So they're buying more chicken, as an example. And you'll see the same in other categories. If berries goes up, then they'll buy the cheaper berries or not buying berries and buying something else.

Yeah, the specialty drug category continues to grow quite significantly. We're going to see the introduction of generic drugs in that sector next year, which will affect the top line. But if we look historically on the introduction of generic drugs in general for our business, it's actually been a positive because we get more volume and so that ends up generating more dollar of profits for the organization.

Yeah, and maybe when the prices come down, we will see sales could increase as well. So what we know right now, it looks like we'll continue the trend that we have seen in the past.

That's really good, Irene. Okay.

Yeah, so just to be exact, and we say this every call, like the conventional channel share is going down, but we're doing better than our peers. And so we see that very clearly. So we're doing better than our peers in conventional, and obviously we're doing better than peers on this channel. Yeah, and we have a number of initiatives in our conventional business. So in our super stores, as you know, we are working on the right-hand side, adding more brands into clothing and food. We are increasing our multicultural assortment. We're making a better shopping trip. We're working more with our digital offers.

So we're doing a lot. When it comes to our market division, whether it's our Patinos or Sears or Loblaw stores, there we are giving customers more value in a form of better service, better products, but also better pricing. So we are finding that sweet part of combining value with the quality that we serve in our conventional banners.

Yeah, and net-net, just to be very clear, net-net we're gaining when you add both of them together. or gaining share.

Yeah, and we shouldn't forget the TNT. It's not in, we don't know about the share, but we know that if we're adding that, it's not in the Nielsen data, then it's even more because TNT is still a growth engine for us, both in Canada and, of course, what we're seeing in the U. S. Okay, so conventional, I think we've heard in past quarters that conventional was growing a little bit, but it sounds like this quarter you're saying it isn't growing, but you're just getting a share with them.

No, no, it's the same. We've been saying the same thing, Michael. We've been saying the same thing. Conventional channel... It's not growing at the same pace as the others. But we're doing better than our peers.

Yes. Yes, it's growing. Okay. Sales growth in market are up. Same-store sales in market are growing, yes. Okay, perfect.

So, no, I think it's more of the same. And our superstores have a very, very strong position, especially in the West, where it's driving some significant sales. And the GM, so especially in the home. So toys, we're doing very well, home and also clothing. And that's, of course, helping on our overall margin. So in general, Superstores is a good fit to us. And now we also, so our supermarket division, they combined our Atlantic Superstores and our Superstores in the West into one Superstore from coast to coast. So now we have 180 of those Superstores, which of course we'll try to get more of having those combined.

And then we are seeing how much more we can do in other provinces as they open up for more scope. So we're really pleased with the performance we're seeing there. And, of course, it has a higher risk than the rest of the business.

I think I don't know what the others have, so I can't comment. But I can tell you from a market share perspective year to date, we're gaining share and we're ahead of our plans for last year. And we've got our way to finish very strong. So, yes, we are gaining share. I think on the market, for me, it stays very rational. It's a good competitive market to the benefit of customers here in Canada, but it also stays rational.

I think the consumer sentiment, again, as I said before, is more of the same. And we are seeing some good growth in fragrance and in the Derm category. So customers might not buy as many big electronic items, but they definitely continue to buy fragrance and Derm. So we're seeing a good, strong uplift, and that's helping our sales in Shoppers. We have not changed the way that we promote in Shoppers.

We have lower prices. We started that in November last year, and we continue to do so, but we have not really changed the way that we trade in Shoppers. Yeah, business in Shoppers is pretty steady. Like, steady as she goes.

Yeah, no, so after the tariffs has gone, so we in Canada have moved the retaliatory tariffs, then prices on direct imported products from the U. S. has gone down to normal. And, of course, we are seeing some customers who are going back to those products that they love now that they are much cheaper than they were. and that will have some impact on Canadian sales. Overall, Canadians just love to buy Canadian products, and that's also why we have added another 200 suppliers this year so far. So it's still up, but it's not up as much as it was before because of lowering prices of those products from the U. S. Yeah, understood.

For us, we like growth both in national brands and in control brands, so we like growing with both. Right now, we are seeing that our no-name, especially in our discount division, is growing ahead of everything else, so customers are seeking choices that we have in no-name. overall we don't see any big significant shift to control brand or to the big national brands but no doubt that the big players, the big national brands, they need more volume so that might change over time but for now and also what we see right now is that it's more of the same with a little bit of favorability to our no-name plus right now that we're in the middle of our insider's launch that's doing incredible well for us.

Yeah, so if I can just talk about the market and we can maybe a little bit on the profit, but overall we are getting market shares and we have a market share in online food that are way above our overall market shares and with having added Uber, I think, two weeks ago, we're seeing a really, really good uplift there. And what we are really pleased about is that the penetration of customers shopping online food is increasing a lot in our hard discount store. So in no-fills, it's up a lot, so we are giving access to online food to many more Canadians. And they can access a hard discount where they get more value for their money.

And just one overall for the profit before I give it to you, Richard, is that we don't have our own trucks. So a man in a van is very, very expensive. And since we use the delivery services, actually margin is okay for us. It's not as good as if it wasn't online, but it's still very, very good. And all the customers who shop online, they also tend to shop more in our stores, Overall, it's good for us. So we are pleased, and it was an 18% uplift in online sales. It's a big part of our business. And we do expect that that kind of growth levels would continue into next year.

Yeah, so the additional drag on earnings is minimal because essentially the fast segment for us is PC Express which means we pick and store and we have a third party delivered to our home So we not paying for the delivery So the impact on earnings is not that significant anymore. So we feel really good about growing this as fast as we can.

And when we are into loyalty and online and digital, I just want to state that last quarter I talked about AI for the tool we had for district managers and many, many companies, they do a good talking about AI, but due to the excellent team that we have, we're actually delivering because that tool now is out in 43 districts, and in quarter one, it will probably be out in our entire store network, so we have a lot of great use cases within this.

I think everything is going pretty well, Michelle. I think what is clearly very successful is small format urban. Shoppers continue to click along. Each one we open is doing really, really well. And as we've said in the past, outside urban areas, we're going to go with a slightly larger box. And the few we've opened this year, we're very happy with. So, so far, so good. The top metric we're focused on is sales.

And so far, when we look at the sales of these stores, we're happy.

Just a little bit. Like we said, 2% over the last five months. In food, it's less than 2%. But we've been playing catch-up, and I was actually looking at this figure this week, like our square-footed share in Canada is not yet back to the level that we were in 2019. So we've been playing a bit of catch-up. We're going to catch up to that next year.

So for us, it's pretty sensible, and so far we feel good about all the stores we've opened and as long as that continues, we'll keep going. And many of the new stores we're opening, they are about 10,000, 15,000, 17,000 square foot where previously we might have opened them at 40,000, 50,000. So yes, we're opening more but less square foot and of course also less sales. So that's also a big difference. So don't only look at, and I know that you don't, at the numbers.

I think your guess is as good as mine. But if I can just look at other countries, I think probably that's the best measurement of guessing where it's going to land. I think overall in Canada, penetration of e-com in food is about 4%, about that number. We are higher than that. Would it end up being 8% or 10%, I don't know, in the UK right now, after many years where everyone really went for online food, it's about 11%. In Germany and France, it stays about 4%, 5%. So US, I'm not aware of the numbers. So we predict that growth level of whatever 15% as an industry over the next few years. And at some point, yes, it is going to take off because so many customers, they want to do both.

They also want to go down. They want to touch their produce. They want to look at what they buy. They want to get the experience going to stores. So I think seven, eight years ago, I think we all in our industry thought that there was no need to build new stores. but it definitely is because customers, they want to shop and many customers, they're not good at planning and you also need to be good at planning to shop online.

One thing I would add, Richelle, is a phenomenon that's definitely affecting the top line growth of everybody is the advent of the new gig players. All the gig players are filling up their channels, whether it's Tubert, the Instacart, Skip the Dishes. So as everybody sort of fills up their channel, it's going to lead to higher growth. Once that's all filled, like I think you're going to get to a more normal growth, we don't know what that number is yet. We'll figure it out probably two years from now.

Yeah, it's lower than 100 million.

We said we would mention it, which reaches that number. Yeah. So it starts with a nine.

I think over time, also, the SlatterCats deal will help us, you know, more and more income there. But that's going to be rolled out over the next year. So all the screens in all our stores.

Okay. Okay.

Yeah, no, we've heard the same thing as you. We know they're coming. Maybe not early 26, but maybe mid-2026. So that's all we know. We know as much as you do, probably.

Yeah, but we're good either way.

And what we think about is our customers. So when it goes generic, it's going to be so much cheaper for many, many customers. And so many customers now, they will have access to that drug, which is good for us, good for customers, and good for healthcare in Canada. So we hope it comes sooner than later.

Yes, that's still to be seen. So our prediction would be that we're going to see. So even though that it's going to be significantly cheaper, then we will sell more. So that's the best guess. So right now, the best guess would be that we will still have a good top line growth. And then on the dollar, we'll be fine.

Yep. Yep. Okay.

Yeah, mid-26, the ambient section, which is the last section that we've opened, we started fulfilling orders a few weeks ago. So as I said in my remarks, we're full ahead of ramp-up. So by mid-2026, we should be well on our way, and we should start to get benefits from East Columbrief for sure.

And I'm surprised at how much progress we've done at Caledon. Let's not forget, we started construction on that one in January. Steel is up. We're going to be finishing directing steel by the end of winter, and it's going to be fully enclosed, I think, by the summer. So that's also progressing well and on plan. And that one will open in 2018.

No, I think there's the odd and odd store that could become TNT and Empress Walk is one. I think most of the growth will come from Greenfield side. Yeah, so overall, I think that's the same for all across our network. We have not planned for a lot of conversions. There might be a few here and there that make sense, but overall that's not a big part of our strategy.

Thank you.

Good question. So what I'll say is if you look at the two-year stacked growth of absolute revenue for Q3, which is 6.1, which is like 4.6 plus 1.5. We expect that the two-year stack growth of revenue for Q4 will be in line with the two-year stack growth of Q3.

Which will answer your questions because it reflects the timing of new stores.

Yeah, and we opened a lot of new stores last year. We opened a lot of new stores in Q4 last year. We're opening a lot of new stores in Q4 this year. So that's going to be the best guide because you'll see if you go back that in Q3 of last year, our absolute sales were up 1.5. And in Q4, they were up 2.9 because of new stores. So you're going to see a similar phenomena in Q4.

Hope that's helpful.

That means more of the same, like one more box with one more stream of data, with one more opportunity to put screens. So the answer is yes, but it would be probably similar type data that we get in any of our hard discount stores across the country.

Yeah, so we have so much data already now that we're working and utilizing even better And our team is doing an incredible good job of doing exactly that.

Thanks, Danny. And thank you, everybody, for your time this morning. If you've got any follow-up questions, drop me a line. and mark your calendar for Wednesday the 25th of February where we will be reporting our Q4 and full year 25 results. Have a great day.