Good morning, ladies and gentlemen, and welcome to the Metro Inc. 2025 Fourth Quarter Results Conference call. At this time, all participant lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session, and if at any time during this call you require immediate assistance, please press star zero for the operator. Also note that the call is being recorded on Wednesday, November 19th, 2025. I would now like to turn the conference over to Sharon Kadoche, Director, Investor Relations and Corporate Finance. Please go ahead.
Merci, Sylvie. Good morning, everyone, and thank you for joining us today. Our comments will focus on the financial results of our fourth quarter, which ended on September 27th. With me today is Mr. Eric La Flèche , President and CEO; Nicolas Amyot, Executive VP and CFO; Marc Giroux , Chief Operating Officer; and Jean-Michel Coutu, President of the Pharmacy Division. During the call, we will present our fourth quarter results and comment on its highlights. We will then be happy to take your questions. Before we begin, I would like to remind you that we will use in today's discussion different statements that could be construed as forward-looking information. In general, any statement which does not constitute a historical fact may be deemed a forward-looking statement. Words or expressions such as expect, intend, or confident that, will, and other similar words or expressions are generally indicative of forward-looking statements.
The forward-looking statements are based upon certain assumptions regarding the Canadian food and pharmaceutical industries, the general economy, our annual budget, and our 2025 action plan. These forward-looking statements do not provide any guarantees as to the future performance of the company and are subject to potential risks, known and unknown, as well as uncertainties that could cause the outcome to differ materially. Risk factors that could cause actual results or events to differ materially from our expectations, as expressed in or implied by our forward-looking statements, are described under the risk management section in our 2024 annual report. We believe these forward-looking statements to be reasonable and pertinent at this time and represent our expectations. The company does not intend to update any forward-looking statements except as required by applicable law. I will now turn the call over to Nicolas.
Okay, thank you, Sharon, and good morning, everyone. I will now go over our Q4 results, starting with a comment on our Toronto freezer situation. As you are all aware, operations at our frozen distribution center in Toronto have stopped on Friday, September 12, as a result of a mechanical issue with the refrigeration system. Since then, our teams have been working hard on securing supply for our Ontario food retail network. Our contingency plan is ongoing and working well, and Eric will be sharing more color on the state of the DC in a minute. On my end, I will be focusing on the financial impact of this situation in Q4, as well as the expected spillover in our first quarter of FY 2026.
The after-tax financial impact of this situation on our fourth quarter was CAD 22.5 million, or CAD 30.6 million before taxes, which includes CAD 24.5 million for inventory losses, as well as CAD 6.1 million for other direct costs related to temporary equipment rental to keep the temperature down in our freezer, as well as incremental transportation and third-party logistics costs for the execution of our contingency plan. Looking forward to Q1 of FY 2026, we estimate that the direct costs associated with the rental of temporary chilling equipment and with the execution of our contingency plan will impact our net earnings by approximately CAD 15 million-CAD 20 million. The impact on sales and margin is expected to be modest given the contingency plan in place, and we expect being essentially back to normal by the end of December.
Now turning to our Q4 results, total sales reached CAD 5.1 billion, an increase of 3.4% versus the fourth quarter last year, driven by higher sales in our discount and pharmacy retail networks. Food same-store sales grew by 1.6% in the quarter, while pharmacy same-store sales grew by 4.8%, supported by a 5.5% growth in prescription sales and a 2.9% growth in front-end sales. Our gross margin reached CAD 1.022 billion, 20% of sales, versus 19.7% in the same quarter last year. The year-over-year increase is partly attributable to shrink improvement in food retail activities, as well as productivity gains at our food distribution centers. Note that the direct costs related to the freezer were recorded under operating expenses. Turning to operating expenses, they were CAD 535 million in the quarter, up 4% year-over-year.
As a percentage of sales, operating expenses were 10.5% versus 10.4% in the fourth quarter last year, as they were unfavorably impacted by CAD 6.1 million of direct costs related to the temporary shutdown of our freezer. Excluding these costs, operating expenses grew by 2.8% year-over-year and represented 10.4% of sales, the same percentage as Q4 last year. EBITDA for the quarter amounted to CAD 485 million. That's up 5.5% year-over-year and stands at 9.5% of sales. Adjusting for the CAD 6.1 million direct costs incurred for the Toronto DC, adjusted EBITDA stood at CAD 491 million, up 6.8% year-over-year, reaching 9.6% of sales, an increase of 30 basis points over Q4 2024. Total depreciation and amortization expense for the quarter was CAD 140 million, up CAD 4.1 million. Net financial costs for the fourth quarter were CAD 34.4 million compared to CAD 32.6 million last year due to higher interest on net debt.
Our effective tax rate of 24.1% is lower than the effective tax rate of 24.5% in the fourth quarter last year, largely driven by the tax holiday. Adjusted net earnings were CAD 246 million compared to CAD 227 million last year, an increase of 8.6%, while adjusted fully diluted net earnings per share amounted to $1.13 versus $1.02 last year. This is up 10.8% year-over-year. These results are adjusted for the CAD 22.5 million after-tax impact of the freezer situation. Our capital expenditures in fiscal 2025 totaled CAD 511 million, down CAD 69 million versus last year. The lower year-over-year CapEx level is mainly the result of the completion of our automated distribution centers in the summer of 2024. Looking forward, we expect CapEx in FY 2026 to reach approximately CAD 550 million as we continue to invest in our retail network.
On the food retail side, in fiscal 2025, we opened 14 stores, including five conversions, and carried out major expansions and renovations at 17 stores for a net increase of 294,000 sq ft, or 1.4% of our food retail network square footage. Under our normal course issuer bid program as of November 7, we have repurchased 8.7 million shares for a total consideration of CAD 848 million, representing an average share price of $97.51. Closing in on fiscal 2025, we are very pleased with our financial performance and the fact that we delivered against our financial framework. I will now turn it over to Eric for more color on our DC situation as well as on our overall performance. Thank you.
Thank you, Nicolas, and good morning, everyone. We delivered another solid quarter to finish a very good year, meeting or exceeding our financial framework metrics. In fiscal 2025, we grew sales by 3.7%, adjusted EBITDA by 5.5%, and adjusted earnings per share by 10.9%. Before turning to the quarterly results, let me share some color on the state of our frozen DC in Toronto. I'm pleased to report that operations resumed on November 10 and that we started shipping to our stores yesterday. We expect to essentially be back to normal by the end of December. The mechanical issue responsible for the shutdown affected several components of the refrigeration system, and the repairs were complex. The setback was not related to the automation system.
Our automated freezer DC in Quebec assumed a substantial portion of the Ontario volume, together with three Ontario-based third-party logistics providers, and also increased direct-to-store deliveries from several suppliers. I want to thank all our teams and partners who have worked nonstop on our contingency plan to minimize the impact on our customers. We have insurance coverage and are currently working with our insurers to confirm the amounts that we will be entitled to recover. Turning to the fourth quarter, we recorded sales growth of 3.4%. Food same-store sales were up 1.6% and 3.8% over two years. Discount continues to drive same-store sales faster than Metro, with the gap between them remaining consistent with the prior quarter.
Food same-store sales were negatively impacted by about 30 basis points due to the shutdown of the freezer over the last couple of weeks of the quarter, and also by the lift we had during the LCBO strike that occurred in the fourth quarter last year. Total food sales growth of 3.2% reflects the performance of our new stores and conversions, which we are very pleased with. Our internal food basket inflation was below the reported food CPI of 3.4%. We continue to see inflationary pressures on certain commodity prices, namely in the meat category. We are presently in our price freeze period; however, we continue to receive price increase requests from our vendor partners at levels higher than a typical 2%-3%. We continue to negotiate hard to minimize the impact on consumers going forward.
During the quarter, our Metro stores saw an increase in average basket, partly offset by a slight decrease in transactions. On the discount side, both basket and foot traffic were up as customers continued to search for value. Promotional penetration remains at elevated levels and consistent with prior quarters. Private label sales continue to outperform national brands by a healthy margin. The competitive environment remains intense but rational, and our market share was flat for the quarter. Online sales grew by 19.8% in the quarter, driven by the ramp-up of Click & Collect and the launch of home delivery at both Super C and Food Basics, as well as third-party marketplaces. Last month, we celebrated the first anniversary of the Moi Loyalty Program in Ontario. Although still early in the program, we continue to see encouraging metrics with a growing member base and improved penetration rates.
Turning to pharmacy, the business sustained its momentum with another quarter of strong RX sales growth and positive front-end performance. Prescription sales were up 5.5%, driven by continued organic growth, specialty medications, GLP-1s, and clinical services. In fiscal 2025, we recorded 5.4 million clinical services in our network of pharmacies, a number that is well aligned with our leading market position in the province of Quebec. Commercial sales were up 2.9%. The strong performance was driven mainly by growth in beauty and cosmetics and partly offset by a slow start to the cough and cold season. As Nicolas mentioned, we are on track with our plan to accelerate the development of our growing discount banners as we successfully opened nine new stores and converted five stores in fiscal 2025.
We continue to see more opportunities in the coming years, and our plan calls for a dozen new discount stores in fiscal 2026, including a few conversions. Looking forward, halfway through our first quarter, we are seeing similar trends to Q4 in food same-store sales. On the pharmacy side, prescription sales continue to be strong, but sales of OTC products are softer due to the slow start of the cough and cold season. To conclude, in addition to the ramp-up of the freezer, our focus remains on realizing efficiency gains throughout our supply chain and store network while we continue to execute on our plan to accelerate the development of our growing discount banners. W`e remain steadfast in our efforts to deliver the best value possible to our customers through our effective merchandising programs, strong private labels, the Moi program, and consistent execution at store level.
Thank you, and we'll be happy to take your questions.
Thank you. Ladies and gentlemen, if you do have any questions, please press star followed by one on your touch-tone phone. You will then hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by two. If you are using your speakerphone, you will need to lift the handset first before pressing any keys. Please go ahead and press star one now if you have any questions. First, we will hear from Chris Li at Desjardins. Please go ahead.
Oh, good morning, everyone. Thanks first for quantifying the impact on the same-store sales with the DC shutdown. Eric, I was wondering, are you still seeing some impact in Q1 when you said the trends are in Q1 and similar to Q4, or is that 30 basis point pretty much now behind you in Q1?
The answer is we continue to see an impact from the freezer situation. It is impacting our same-store sales a bit, so that's continuing. I said the 30 basis points was two events, the freezer for two and a half weeks and the LCBO last year. The freezer situation is having an impact. We're losing a bit of sales and margins. It does not show too much to the consumer, but we do not have a full assortment in certain categories. Frozen bakery is an example. When I say similar trends in Q1 to Q4, we are in the same, very much the same ballpark, and we continue to be affected by the freezer situation. It is a bit of a drag included in that number.
Okay. Presumably, once it's fully back online by the end of this calendar year, I mean, that shouldn't really be a headwind anymore.
That's correct.
Okay. Okay. That's helpful. Just maybe a quick one on gross margin. It continued to benefit nicely from the productivity gains at the food DCs. Is it fair to assume we'll continue to see the benefits manifested in fiscal 2026?
Hi, Chris. Good morning. I would say yes. However, I guess, as you know, we are in a very competitive industry, so we're always looking at preserving, gaining market shares. Not to say that some of these benefits would not be "reinvested" in promotional activities, but I would say that yes, the benefits that we've been able to capture are there to stay.
Okay. That's helpful. Maybe a last question on the pharmacy business. We had another very strong year, both in terms of prescription and commercial sales growth. I guess my question is, do you expect kind of similar drivers for this year that have supported the strong growth in the previous fiscal year? What are some of the things that you guys are watching closely?
Yeah. We expect the same fundamental trends. The RX growth has been very strong the last couple of years. We're seeing still good growth. The expanded scope of practice going forward is going to be a tailwind on RX eventually when Bill 67 kicks in. On the front end, it's a competitive market. We're well positioned. We have a great network, good merchandising, good programs, and we're confident in our ability to continue to see decent growth in our front-end sales. The fundamental drivers are still there: aging population, health trends, clinical services, expanded scope of practice. These are all good tailwinds, structural tailwinds for pharmacy for us in Quebec.
Got it. Okay. Thanks, Eric. All the best.
Thank you.
Next question will be from Mark Carden at UBS. Please go ahead.
Good morning. Thanks so much for taking the questions. Just to start, just wanted to see your latest thinking on the health of the consumer. Has purchasing behavior changed much from last quarter? Just related, are you still seeing much of a buy Canadian push?
Consumer behavior is very similar to what we've been reporting for several quarters, as I outlined in my opening remarks. Not much to add there. Buy Canada, it has softened up. There's still more growth in Canadian product sales than non-Canadian product sales, but that growth has somewhat narrowed versus what we saw in spring and summer. It's declining a bit. Since counterterrorist were lifted on September 1, some of these products, U.S. products, prices have gone down, so that's maybe contributed to the narrowing of that gap.
Okay. Great. Just on prescription drugs, you guys continue to do well there. Slight acceleration from the last few quarters, though. Just curious what the primary drivers you're seeing in the growth of prescription drugs are from a category standpoint, what you're seeing from the GLP-1 angle, and then any update on your outlook for healthcare services.
I'll let Jean-Michel have a crack at that.
Yeah. I think Eric highlighted the drivers very well. GLP-1s continue to be a tailwind. There have been some changes in that category as new products have come into market in Canada, and that is also continuing to boost growth in that category overall. In terms of professional services, we are continuing to see growth on professional services. Although since there are no new services, we are starting to see that it is moderating a little bit. With PL 67, we do expect that to pick up. We do not have any news on the PL 67 front. Right now, we are probably looking at a January timeline, depending on the negotiations between the government and the AQPP. Other than that, it is the same underlying drivers that are going to continue to maintain that momentum in FY 2026 for us.
Great. Thanks so much. Good luck, guys.
Thank you.
Next question will be from Irene Nattel at RBC Capital Markets. Please go ahead.
Thanks, and good morning, everyone. I think we're all kind of hyper-focused on any marginal changes in the environment, the competitive intensity, consumer behavior. Based on your comments, Eric, are there really any, or is it fairly stable to, let's say, earlier in the year?
I think it's fairly stable, very consistent environment, I would say, and consumer behavior. The accelerating square footage growth is not new for this quarter, but it's been something that we've opened stores, others have opened stores. There is industry square footage growth out there that's having an effect. It's making the market certainly more competitive. The level of same-store sales we're reporting, I think, reflects some of that new competition, new square footage in the market. That's the only comment I would add.
That's really helpful. Thank you. Just coming back to a comment that you made about requests for price increases being in excess of the historical 2%-3%. I think you've called out meat, but what about other categories? What would be your expectation for where things actually settle out versus the requests?
Price requests of over 2%-3% is not unusual. We've seen that before: mid-single digits, high single digits, sometimes more. It depends on the category, the ingredients, the particular situations. This is, I would say, a normal situation. The quantity remains elevated of price increase requests, but we deal with it as best we can. We negotiate in good faith with our vendors. We push back when we can. When it's justified, it will be a market increase, and we will have to take it. As I said in the opening remarks, we're in the freeze right now. There were some price increases before November 15th, and the next wave will not come before February. We're trying to protect consumers as much as we can and give value as much as we can.
What the outcome of those negotiations is, we expect to be normal, and we expect it to be manageable. We expect to stay in a range of inflation in the 2%-3%. The jury's out, and I do not have the famous crystal ball. We'll see where it lands.
That's great. Thank you. Just one final one for me, please. You mentioned the accelerating square footage growth, yours and the others, notably in discount. What kind of returns are you seeing as you open these real estate projects, and are they any different from historically? Thank you.
In general, we're pleased with our returns. We analyze investments very carefully. We have our internal thresholds. We're meeting our investment thresholds. Market by market, investment by investment, we're careful to make the decisions that will contribute to long-term shareholder growth and capture the market share that we think is out there to capture for us in a responsible and disciplined way. The short answer is we're meeting our financial targets.
Thank you.
Next question will be from Michael Van Aelst at TD Cowen. Please go ahead.
Hi. Thank you. I just wanted to go back on your answer to one of the earlier questions about the industry square footage growth. I mean, I think it makes sense that it's moderating the levels of same-store sales growth. You also said that it's making the industry more competitive. Now, I guess I'm wondering, is it just making it more competitive in terms of lowering that same-store sales growth, or is it also impacting your gross margins? Because your gross margin up 23 basis points was actually quite solid. I am kind of curious as to whether you're seeing pressure on the gross margin.
Your comment was more the same. When there's a new store opening across the street, it makes it more competitive for your existing network. I said square footage makes it more competitive because it adds competition in certain markets, and it impacts same-store sales for that market. For me, it's one and the same. The gross margin, we're pleased with our result this quarter. We're able to manage through this competitive environment and pleased with our performance. I think we have experienced merchandisers, and we're doing what we can to meet our targets. We're in a competitive environment. Always has been.
Okay. Okay. Nicolas mentioned that the DC efficiencies that you're getting are helping to drive that gross margin higher. I mean, that was the case, obviously, in this quarter in the face of some of this competitive pressures. What might change? What do you think might change over fiscal 2026 that might require you to reinvest some of that margin improvement back into promo activity, like you suggested, might be necessary?
I don't want to speculate. We are competitive. We always will be competitive in the market to protect our share, protect our sales, and deliver decent margins to our shareholders for the business. What might change? It's hard to give you a straight answer or clear answer to that. We're in a competitive market, and we're confident in our position and our ability to compete. We're well positioned with our network of stores, both Metro and discount in both provinces, with a very good market share. I think we're well positioned to continue to do well.
Okay. Maybe just I'll ask it a little bit clearer. Is there anything that you're seeing now that's causing you to reinvest some of that gross margin gain that you got in Q4? Or is that just a possibility in future quarters?
It is always a possibility, but we do not give guidance like that. I think we should—that is all I am going to say.
Okay. Just to be clear on the DC impact, when you talked about the direct impact of CAD 6 million, all of that was in OpEx, I believe you said. When you say you had—I do not know. You said 30 basis point impact from two factors. Let's call it 20 basis points from the freezer. Was that adjusted for in the EPS, or was that not? Or was that left to flow through?
No. What I said, as you've mentioned, is that all the direct costs associated with the freezer were recorded under OpEx. When the freezer situation happened, we completely stopped operating the freezer, shipping products out of the freezer. The gross margin benefit that we've seen was realized, if you will, prior to that situation and is "not adjusted for." It just does not include any impact for the freezer. All the direct costs, incremental costs, are in OpEx.
Just to pick up on that, we did not adjust for the lost sales and the margins on those lost sales. We adjusted for the loss of inventory in the warehouse and the direct costs. That's it.
Was that clear, Mike?
Yeah. That's clear. Thank you very much.
Thank you. Next question will be from Mark Petrie at CIBC. Please go ahead.
Yeah. Thanks. Good morning. Thanks for all the comments on the consumer and the competitive environment. That's very helpful. Hoping you can elaborate on the steps you took with regards to the frozen DC just to get it back on track to full operations. Was it repair, replace? How have you sort of addressed the risks of recurrence?
Thank you for that question. I'm not an engineer, and I don't want to say things that are way out of my league. It was a complex repair and setup. It involved compressors that were repaired, a heat exchanger that is being replaced. We are changing some components of the heat exchanger system to a different system, and we will be adding some redundancy so that we will avoid this situation. We will do eventually, or in the not-too-distant future. We don't face the same risk in Terrebonne or our other automated frozen facility in Quebec. That one is a fresh and frozen building on a different refrigeration system. We made sure that we have enough capacity and redundancy there. We will add even more, but we are in a good position there. I think the risk is well managed.
I think the good news in this catastrophe is what Terrebonne or Quebec DC was able to pick up from Ontario. Very pleased that we were able to increase capacity in Terrebonne in short order, quite substantially. That proves that we have good networks, good facilities with good systems that can operate. Again, the breakdown in Toronto was really mechanical, refrigeration related, not IT or automation related at all. I hope this answers your question.
Yep, it does. Thank you. I'm not an engineer either, so that's more than enough for me. I guess maybe just to follow up, the costs for whatever you did have to do with Terrebonne, that's included in the CAD 15 million-CAD 20 million for Q1, or that's just included in your overall CapEx budget, or where do those costs fall?
The CAD 15 million-CAD 20 million that we flagged out for Q1, a lot of that is transportation costs, and that includes Terrebonne. We're shipping from Terrebonne to Ontario stores all over the province. That has a substantial transportation cost, and that's in that number.
Yeah. Okay. Sorry. I just meant the cost of the equipment, but I think it was probably relatively small. My only other follow-up question just on the same-store sales growth, or I guess specifically to inflation, it seemed like the gap to CPI was wider this quarter than it has been in the last number of quarters. Would that be a fair interpretation? If so, when you look at your internal data, what would account for that?
I wouldn't say the gap to CPI increased. We're in the same ballpark. CPI for our markets was 3.4%. We're in the 3% range. It was about a similar gap in the previous quarter, if I recall. We don't see a huge gap, but there's a gap.
Yeah. Okay. Thanks for the clarification, and all the best.
Next question will be from Vishal Shreedhar at National Bank. Please go ahead.
Hi. Thanks for taking my questions. I just want to circle back to the GLP-1s that will go generic and have an impact on Metro's drugstore business. Is it fair to suggest that there'll be an impact on same-store sales growth and gross margin dollars, or do you anticipate some of that being completely or more than offset by volume?
Yep. I could take this one. It's a good question. Right now, the challenge is we don't have a crystal ball, so we can't really tell you when Ozempic could be genericized. There's been some delays. We know that the first submission did receive a notice of non-compliance. Clearly, it's going to be pushed further into FY 2026 for us. Some people are saying spring. The question becomes, will they have enough supply to meet the demand? That also is going to change the dynamic and the impact of GLP-1s for us. When you look at it right now, the submission is for Ozempic, which is primarily for diabetes. Are they going to be prescribing it also for weight loss? Chances are yes.
There are other alternatives, as I mentioned earlier, on the market right now that have also continued to bring a little bit more dynamics to that category. Yes, a generic, if the demand does not pick up because of the lower costs, will create some deflation in our same-store sales. Right now, when we look at latent demand, we do expect some pickup because of the accessibility of the new price point. In terms of margin, in our model, it can create some margin decrease as we make margin as a percentage from wholesale. I mean, that is the dynamic right now in the market, but there is still a lot of unknowns for FY 2026.
Okay. Thank you for that. That was helpful. With respect to the Jean Coutu network, is that sufficiently outfitted to capture the growing demand for professional services? And how can I think about the size of that business for Metro?
Yep. Right now, it's more of a same-store sale business, and we get royalties on those fees. When we look at our network, we are very well positioned. We've invested for a long time in making sure that our stores have sufficient consulting rooms, on average two per store. Now we're looking at stores with three and four as we're renovating and continuing to expand our stores. We are in a very strong position to continue to offer these professional services across our network. It's something we've always invested in. We see it right now. We're capturing our fair share of professional services and just continuing to grow.
Thank you.
Next question will be from John Zamparo at Scotiabank. Please go ahead.
Thank you very much. Good morning. I wanted to follow up on the gross margin gain topic. The year-over-year gain this quarter was significantly more than what Metro had posted over the last three quarters. I know you called it shrink improvements and productivity gains from the DC, but is there any color you can add on why this made a more meaningful improvement this quarter versus the past three?
Not really. Maybe Michel can add color, but not really.
Maybe a comment on the two questions regarding margin. Gross margin is a very dynamic and fluid concept for results. Our focus is winning on customer value and driving tonnage and maintaining share and delivering, as Eric said, the bottom line and shareholder value. The rate itself for us is a guiding post, but not an objective on itself. Depending on the quarter, depending on the dynamic, depending on the tonnage available, our merchandising team will invest and deploy strategy to win in the marketplace. As you've seen in the past, our gross margin has been quite stable for multiple quarters. To Nicolas' point earlier, some of the productivity gain and shrink gain sometimes are reinvested to drive tonnage, and sometimes are flowing to the bottom line. I don't know if that helps and provides additional color.
Yes.
Hopefully, it helps.
Thank you. Yes. Thank you. Just to follow up on that, the fact that shrink is listed as the first factor, should we interpret that as that was the larger of the two drivers between that and productivity?
Not necessarily. John, I would say it's a combination of shrink, DC productivity, including within the DC as well as all of our logistics around transportation. I would say that they are similar contributors.
Got it. Okay. In the outlook, you talked about 12 new or converted stores in FY 2026. Apologies if I missed it, but can you say what you expect for net square footage growth for this year?
For fiscal 2026, we're seeing above 1%, 1%-1.4%. See where we land.
Okay. I'll pass it on. Thank you.
Once again, ladies and gentlemen, if you do have any questions, please press star followed by one on your touch-tone phone. Next is a follow-up from Michael Van Aelst. Please go ahead.
Just a quick one on the insurance claim. I know you said you're still negotiating it, but is your expectation that it's going to cover most or all of the direct and indirect and inventory hit, or just one of them? Do you have any idea of the timing?
Michael, I would have liked to report that exactly, that we're going to get it all back. These are complex policies with several insurers. What I read is what I'm told I should say. We're making our claims. We're going to get as much as we can. We think we're well covered with good coverage. We'll keep you posted, and we hope to get most, if not all of it back, but we'll see where it ends up.
Yeah. Can you comment at all on the timing?
Hard to say too. We're going to get some advances, it looks like. They recognize liability, so we're going to get some money pretty early. For the rest, I don't know how long it'll take. We'll keep you posted.
Thank you.
Next question is a follow-up from Chris Li. Please go ahead.
Oh, sorry. I'm sorry if you talked about this already, but just a question on your SG&A expenses for the quarter. If we exclude the CAD 6 million of non-recurring costs, it was fairly normal. I think it was up just under 3%. I know you don't give any sort of guidance for this year, but I'm just wondering, is there anything over the horizon that will cause you perhaps to deviate from that 3% growth for this year if you exclude the one-time costs that are still coming in Q1? Thanks.
Yeah. As you've mentioned, I think adjusted for the direct cost of the freezer, the year-over-year growth of SG&A was 2.8%. Nothing specific to highlight. Multiple categories contributed "normally" to the increase. Nothing that we see on the horizon that should have a material impact. We have always ongoing union labor negotiations that could come and have an impact. As you've mentioned, we don't give specific guidance, and I would say nothing specific to highlight.
Okay. That's helpful. On the share buyback, you bought back, I think, CAD 800 million of shares in fiscal 2025. Do you expect a similar amount in fiscal 2026? Maybe related to that, you do have still a very strong balance sheet. I think your leverage is only 2.2 times, which is below your target. Do you anticipate there's more room maybe to use that to accelerate the buybacks if you think it's appropriate?
Yeah. I think at this point, as I've mentioned, as of November 7, we have repurchased 8.7 million shares. The total approved program was 10 million shares. We're obviously not going to get to that by November 2026. I would say that next year, at this point, I would expect a similar program and similar kind of operating conditions, meaning we're not necessarily going to totally fill it. I think leverage-wise, we've been saying that we are in a good position balance sheet-wise. We might increase leverage in the future depending on conditions. I would say for the moment, message is the same.
Okay. That's helpful. Thank you very much.
Thank you. At this time, we have no other questions registered. Please proceed.
Thank you all for your interest in Metro. Please mark your calendars for our first quarter results on January 27. Thank you.
Thank you. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. At this time, we ask that you please disconnect your lines. Have yourselves a good day.