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Operator: Good day, and thank you for standing by. Please be advised that this conference call is being recorded. Welcome to The North West Company Inc. Third Quarter Results Conference Call. I would now like to turn the meeting over to Mr. Dan McConnell, President and Chief Executive Officer. Mr. McConnell, please go ahead. .
Daniel McConnell: Hello. Good morning, and welcome to The North West Company Third Quarter Conference Call. So joining me here today is John King, our Chief Financial Officer; and Alexis Cloutier, our VP, Legal and Corporate Secretary. Alexis will begin with our disclosure statement. .
Alexis Cloutier: Thank you, Dan. Before we begin today, I remind you that certain information presented may constitute forward-looking statements. Such statements reflect North West's current expectations, estimates, projections and assumptions. . These forward-looking statements are not guarantees of future performance and are subject to certain risks, which could cause actual performance and financial results in the future to vary materially from those contemplated in the forward-looking statements. Any forward-looking statements are current only as of the date they're made, and the company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future results or otherwise other than what's required by law. For additional information on these risks, please see North West's annual information form and its MD&A under the heading Risk Factors. .
Daniel McConnell: Okay. Thanks, Alexis. I'm going to start with an overview of our results for the quarter and then move on to comment on our outlook and the Next 100 program, and then I'll be opening up for questions. All right. Let me begin by summarizing the story of this quarter. Overall, we delivered solid net earnings gains with a very challenging quarter from a top line perspective. Sales in the quarter decreased 0.5% compared to last year. That's primarily due to less money in market resulting from reduced Child and Family services funding in Canada and a lower permanent fund dividend in Alaska. Despite these headwinds, we delivered a 12.9% increase in net earnings compared to last year, driven by improved gross profit rates from our Next 100 work and lower expenses. All right. Let's unpack that starting with sales. Consolidated same-store sales decreased by 1.7% this quarter compared to a 4% increase last year, and that's primarily due to the headwinds in our Canadian operations and the challenge of matching strong sales comps from Q3 last year. Canadian operations sales decreased 2%, with same-store sales down 2.8% compared to a strong 4.9% increase in Q3 of last year. The lower sales in Canada was primarily due to a decrease in money and market from the elimination of funding for the Inuit Child First food voucher program and a reduction in funding for Jordan's Principle programs compared to last year. Decrease in drinking water settlement payments and climate action incentive payments compared to the third quarter last year were also factors, but to a lesser degree. The decrease in money and market combined with consumers shifting their spending from general merchandise to food were the primary reasons for the 3.1% decrease in general merchandise and other sales in Canadian operations. As higher airline revenue from third-party cargo and passenger business and an increase in pharmacy sales were more than offset by an 11.1% decrease in same-store general merchandise sales. On a positive note, all of our stores in the communities impacted by wildfire evacuations have resumed operations and had a modest decrease in sales for the quarter. I'm going to switch gears now and just briefly comment on the international sales. Sales in our international operations were flat for the quarter as an increase in same-store food sales of 1% offset a decrease of 9.9% in same-store general merchandise sales. In Alaska, a lower permanent fund dividend of $1,000 compared to $1,700 last year, combined with consumers shifting more of their spending to food were the key factors contributing to the decrease in general merchandise sales. Softer economic conditions in the South Pacific markets were also a factor. Okay. With a deeper dive on sales, I'll briefly comment on consolidated gross profit and expenses. Gross profit increased 1.4% for the quarter with the gross profit rate up 64 basis points compared to the third quarter last year. This improvement reflects the positive impact from our Next 100 work particularly the ongoing refinement of our merchandise assortment and expanded private label offering in both our Canadian and international operations. A change in sales blend, including lower wholesale sales and a decrease in general merchandise seasonal markdowns in our international operations compared to last year were also factors. Expenses decreased by 1% for the quarter and were down 13 basis points as a rate to sales largely due to reduced share-based compensation costs primarily related to the changes in the company's share price and a decrease in vessel repairs in Transport Nanuk. We also incurred $1.3 million in onetime costs related to the execution of our Next 100 program, which were more than offset by the benefits from our Next 100 initiatives. We continue to see store labor productivity gains, which are resulting in lower store staff costs as a percentage of sales in addition to other cost savings initiatives such as reduced print media. The net impact of all these factors, combined with a decrease in interest expense and a lower effective tax rate resulted in a 12.9% increase in net earnings for the quarter. All right. Now let me talk briefly about our outlook and provide a few comments on the Next 100 program. Since we provided commentary on the key factors, we expect to impact our outlook in the report to shareholders, I will just comment on the expected near-term impact of money and market in Canada. The elimination of ICFI food voucher funding and a reduction in Jordan's Principle program funding are expected to continue to impact sales in Q4. With some offsets anticipated from an increase in consumer demand from First Nation Child and Care settlement payments. As we noted in our outlook, the distribution of first class of Child and Care settlement payments to individuals in the communities we serve began with a very small number of payments at the end of Q3 and there's been a modest increase in the volume of payments so far in the fourth quarter. We expect the distribution of Child and Care settlement payments to ramp up in 2026 and extend for a number of years beyond 2026 based on the requirements for individuals in the removed child class to reach the age of maturity before payments are issued, combined with the anticipated opening of the application process and distribution of settlement payments for the other 8 classes. Regarding the Next 100 program, we remain focused on driving operational excellence and cost efficiencies. From a category manage perspective -- category management, sorry perspective, we continue to refine our merchandise assortments and procurement strategy with a focus on the expansion of our private label offering. Throughout 2025 we have ramped up the rollout of new merchandise assortments and expanded the private label offering in both our Canadian and international operations. Although it is still early in the process, feedback from customers has been positive, and the trends of private label penetration are encouraging. The implementation of store-based inventory forecasting replenishment technology and a new warehouse management system are also underway. With these new processes and tools, we expect to improve on shelf availability for our customers and streamline the merchandise ordering processes for our store and warehouse teams. We are pleased with the progress and results to date, but also recognize that there's still a lot of work to do as we continue to learn and refine this new operating model. Let me wrap up by saying that the Next 100 operational excellence focus has helped mitigate some of the external headwinds that impacted our results this quarter and the foundation we're building is expected to continue to deliver value for our customers, shareholders and employees going forward. With that, operator, I will now open up the call for any questions.
Operator: [Operator Instructions] Our first question will be coming from Ty Collin of CIBC.
Ty Collin: To start, I guess, can you maybe just help us understand the relative impact of the various factors you called out driving the same-store sales decline in Canada. And with respect to the declines in government funding specifically, is that stable? Or is that kind of worsen compared to last quarter?
Daniel McConnell: You turn if off? It is hard to hear. Can you -- sorry, can you repeat that question? You cut...
Ty Collin: Yes, sure thing. I'll go again. So I'm just wondering if you could help us understand the relative impact of the -- you got me. I just want to understand the relative impact of the various factors driving the same-store sales decline in Canada. And then with respect to the declines in government funding for some of those programs, is that stable? Or did that worsen compared to Q2?
John King: Okay. Lots to unpack there. So look, I'll give you the full down. The biggest impact on sales was definitely the money in market. And that's, I think, something that -- I think we've been pretty consistent with that and clear on some of the messaging that we've identified, especially with the ICFI, the Jordan's principle, the pullback in funding and the slower pace, I guess, than some of the market has anticipated, although we've always said that I think Q1 is when we thought we were expecting some of the payments from the child benefit. But I would say so money in market is the #1 headwind. Big ticket motorized sales reduction. That's also a big one. Obviously, they're higher price point, lower margin, but that's been a pretty big impact as well. Definitely some taste -- some thumb pointing, like we've just gone and we've rolled out. We've engaged with a lot of -- with new vendor our supply chain that we just rolled out this year, where we've moved over to a new system on a push system, and there was some disruption there. So I would say it's not nearly the degree as some of the others, but there was probably higher out of stock on our shelves than typical, just as a result of some of the turbulence that we experienced, which would be expected, but definitely reacted very quickly and are looking very positive as far as how we're rebounding from that and being a lot stronger as a result of it, I might add. Some of the -- with reducing prices, I know we're just getting into it, but with the private label program, obviously, lowering prices, increasing gross profit, but lowering prices for our customers had some impact, not a lot, but certainly something to be considered as the private label program is starting to gain a lot of traction in our markets. And don't forget, we're comping some big quarters. I mean, double digit, I think, of this year, certainly Q3, Q4 and then Q1 into next with some of the -- with a lot of the money that was in the market previously. However, as we indicated, we are expecting to be able to offset that in Q1 with more of the child care benefit money coming in. I'll also say that with respect to payments, I mean, look, there has been some press out there. If you recall, I've been pretty consistent with forecasting in Q1 is when we thought the majority of the money is going to come. The childcare benefit did ramp up from the previous quarter. But again, it's not anywhere near at the level that we're anticipating. So yes, I think that's -- I think I answered your question, sir.
Ty Collin: Yes, that's great. Appreciate those comments. And then on Next 100 I appreciate all the commentary there. I guess, can you -- maybe just update us with respect to which initiatives you still see the most low-hanging fruit for at this point? And then maybe just at a higher level, I mean, how far along would you say you are in the overall journey of executing Next 100 as we're exiting 2025 here?
Daniel McConnell: Okay. So as we're exiting 2025, there's a number of different initiatives. So the low-hanging fruit not sure there's any more low-hanging fruit, but it's all -- we're in execution phase. As you know, like we're -- as indicated on the private label, we're starting to get ramped up. I would say we had it executed October, November, but it's with some fixes in place. So we're on a nice trajectory there. Things are getting better and better as we go on. On the other hand, the supply chain optimization, it was a little rocky. We anticipate the headwinds are behind us. And -- but yet, it's going to be -- it's still a pretty good journey. We're -- we've got the pilots stores are done. We've rolled it out now to the -- to most of the chain in Canada on our forecast and replenishment. And we anticipate that it would probably be up and operational fully in '27, but we think that -- we know there's going to be some benefits certainly throughout 2026. The CPI work, the category performance improvement plan, I would say we're probably 50% through that approximately. And -- but we expect to see some more benefits into 2026 and probably -- I would say it will probably level off by the end of 2026, and then we'd be comping that into '27. John, looking at GNFR, I think, is pretty -- we're pretty much into the -- pretty well into it, I'd say 75% through GNFR. Yes, goods not for resale, sorry. So I think that the biggest benefit probably to come is going to be from the supply chain optimization, and that's in our forecast and replenishment, moving away from the poll system that we had in the stores previously and going into a push working through algorithms to just get more controls and be more accurate with our inventory management.
Ty Collin: Okay. Great. And if I could just sneak one more in. So you guys renewed your NCIB last month. Do you plan to be active on the NCIB going forward? Or how are you thinking about potential buybacks relative to some of your other priorities?
Daniel McConnell: Well, I mean, our other priorities are in and operating, and we have some healthy investments to make in the business now and into 2026, obviously, with some of the things that we talked about and some of the new store renovations in some of our major markets. So I think it's somewhat TBD, obviously, much like you would look at it depending on what the stock price does, but we're really optimistic about the future of the company. So we have no problem investing more into the NCIB. Yes.
Operator: And our next question will be coming from Michael Van Aelst of TD Cowen.
Michael Van Aelst: Just to finish up on the NCIB question. So you do have a higher level of spending short-term. Can you comment on what the CapEx rollout looks like the -- this year, next year and maybe '27? And then given that you have a strong balance sheet, would you be willing to supplement any free cash flow with some maybe balance sheet leveraging to also fund the NCIB while the share price is depressed.
Daniel McConnell: Yes, I think we would look at that, absolutely. And it's something that we are looking at just how we would want to position ourselves going forward, pending our next phase strategy, which is work that we're undergoing as we speak. So in other words, much like the same commentary I've made before. We think the best place for the money, obviously, is investing it in our business and infrastructure in order to generate some strong returns for our shareholders. If there's no opportunities at that point in time, then we certainly -- and we had a buildup of cash, we would certainly look to execute on the NCIB. And if it was sustainable, if we had sustainable higher cash flows, then obviously, we would look at working with our dividend.
Michael Van Aelst: Okay. So what is the CapEx look like, the next little while $145 this year still?
Daniel McConnell: $145, yes.
Michael Van Aelst: And how about next year?
Daniel McConnell: $160, is I think what we're forecasting currently?
Michael Van Aelst: Okay. And so I mean that's above your normal run rates. Is that -- when do we get back to a normal like more normal level.
Daniel McConnell: I would say at the following year '27, we've had some pretty sizable projects that were kind of in the midst of Michael. So as soon as we get over that hump, then it will start to normalize. Both with IT, with some of our IT investments as well as some of our major markets that have had a long drought of capital, I would say. And so we've just undergone a project. It's been a 3-year project, particularly into [ Calgary ] is what I'm talking about. So that's -- that will be coming to an end at the end of '26.
Michael Van Aelst: And so what's 2020 -- like what's the normal level of CapEx that we can expect over time.
Daniel McConnell: It's a great question, especially given the inflation and the cost and what it costs to do things in the north. But I would say my expectation would be to be sub $140.
Michael Van Aelst: All right. So just getting back then so to the NCIB, would you -- I mean it seems like you're going to be using a lot of your free cash flow on your dividend and CapEx and growth of our excess incremental CapEx. So -- but your balance sheet at just over 1x leverage is very clean relative to other retailers out there. So I'm wondering, like would you -- are you thinking of looking at that now and leverage -- using some leverage to buy back the stock opportunistically given the low price? Or would you -- or are you just waiting until free cash flow comes.
Daniel McConnell: Sure. Currently, we were waiting for free cash flow, Michael, but I can tell you that we're, it is fluid. So we are undergoing some strategy work right now to understand what our future -- our next adventure is. we wanted to make sure that we focus on execution, obviously, with a number of ideas as to where we would like to go from here. But I would say, currently, to be frank, it was more thinking about future incremental cash flows drying down NCIB. We would -- we haven't -- we have not planned to currently flex the balance sheet to buy NCIB current right now. But I'd say it's somewhat fluid, but that's not in the cards right now.
Michael Van Aelst: Okay. Just -- and then on the Next 100, that was also mostly covered, but just to summarize on that one. If you're kind of -- if you're looking at $100 in total benefit, let's call it, over the course of it. Where would you have been in '25? And where do you think you'll be in '26 before getting all of it in '27.
Daniel McConnell: I would say, that's a great question. I'd say 50%, I'd say 50%.
Michael Van Aelst: 50% in '25.
Daniel McConnell: Yes.
Michael Van Aelst: Okay. And then I guess, we extrapolate and say 75% or 80% in '26 and then all of it in 100% in '27.
Daniel McConnell: Yes.
Michael Van Aelst: Okay. Right. Good enough. Just to get an idea. Okay. So -- and then I just wanted to touch on some of those Jordan Principle claims settlement payments. And so -- it sounds like the [ AFN ] is talking about something like 6,600 payments having been made at this point, which just over $40,000, it's about $40,000 each by the sounds of it, which is a pretty big ramp-up compared to 0 almost a few months ago, but also only 1% of the total payments that are expected over time. So why do you think you're not seeing a bigger ramp up in Q4 in your communities.
Daniel McConnell: Currently, I mean, look, it could be the postal strike. It could be the administrative efficiency of the administrators. This isn't new, though, right? I mean, like we've seen this many times before as far as the disbursement of these different payments. So which is why I would always put a hedge on it on time frame. So I would -- I can't answer why, but I can tell you that it's not unexpected. And so it's something that we're kind of ready for and optimistic, obviously, hopefully, for this season that people have a few more dollars in their pockets to enjoy the season. But like I said, more so looking to Q1 of '26 is when we think that it's going to start coming in. I mean, look, it's not -- I don't think there's any question on whether it's coming. We know it's coming. It's just about how quickly it can be processed. And I think we can appreciate that, that -- the history has shown that it doesn't happen as quickly as everybody would like, including some of the leaders that are obviously advocating on behalf of some of their constituents.
Michael Van Aelst: Right. Yes, that's clear. Okay. So if I remember correctly, like some of these other other payments that you're -- that are falling off now the water settlement payments and things like that. I mean those were smaller than what this one is going to be. And the only -- the water settlement itself only affected 30 of your communities, I think, if I remember correctly.
Daniel McConnell: So -- just under that. I think yes.
Michael Van Aelst: Just under -- so does this Jordan's Principle settlement, is this affecting all 140 of your communities? Is this benefiting all of them?
Daniel McConnell: No, it wouldn't be all of them. A large majority of them, I would say, in Northern Canada, but not all of them. I think the number is about 60%, so just under half.
Michael Van Aelst: Okay. So about 60.
Daniel McConnell: Yes.
Michael Van Aelst: Okay. And so do you have any sense as to what percentage of that $23 billion of payments that are going to be made are going to end up in your communities?
Daniel McConnell: I think you probably have to do your own math on that, Michael, just because it's -- there's a lot of assumptions that we make. And knowing you, I think you'll probably get pretty close to an assumption that we would. But no, we wouldn't -- it would be -- it's a really highly educated -- it's a very high assumption. That's what we had. So it's not something that we would release. I just, yes. It wouldn't be productive. I don't think for you -- for us to give you a number.
Michael Van Aelst: Last question for you. Are you -- could you try to hazard or give us some kind of insight into your capture rates in the past when these types of programs or payments come out in your communities?
Daniel McConnell: No, we don't release that. But we do -- I will tell you that the capture rates that we've seen and the few that we've had have been on our forecast pretty consistent with what we anticipated, with slight improvement. But I would say it's -- so we're pretty -- we've been pretty accurate so far -- we just need more of it.
Operator: [Operator Instructions] Our next question will come from Stephen MacLeod of BMO Capital Markets. .
Stephen MacLeod: Lots of great color so far. So a lot of my questions have been answered, but I just wanted to get see if I could get a better sense of, Dan, you're talking about the fact that you've always said that Q1 is probably when you expect to see some of the more meaningful settlement payments coming through. And obviously, it's been a bit -- hasn't been very transparent in terms of the timing from the administrator. So I was just curious if -- what kind of visibility you have into the payments beginning in Q1 and kind of how we should think about that actually coming to fruition?
Daniel McConnell: Maybe I wouldn't say I'm an expert, but I would say that it's just based on some of the -- being around the history that we've -- how we've seen payments administered in the past. It's hypothesis, it's a guess. But it's -- I know I get exposed to the same information that everybody else does. So -- and you heard some of the people that are closed, they thought it would have been sooner. And so I was probably putting a contingency on what some of the other people were identifying. So it's not all that scientific, unfortunately. But it's -- yes, I wish I could give you more assurance, but I can't. It's simply a gas based on putting a hedge or a contingency on what is anticipated or expected with some of the community leaders who are in the -- I'd say, on the front line of negotiations and in constant conversations. But it gets -- comes down to bureaucracy and bureaucracy is controlled by -- I don't know if you find out, let me know, but it's just -- so the decisions are reached, the decisions are made, so I don't think there's anything in a halted. It's just on the timing of the payments. Yes. So I guess that's it's calming -- it's calming, the fact that you know it's coming, but everybody is anticipating and including obviously the customers that are going to be receiving it. I would think nobody wants it more than them, but it's just that's where we're sitting right now.
Stephen MacLeod: Yes. No, understood. And then maybe just looking at the Inuit Child First food voucher program and the reduction in funding from Jordan's Principle programs, which kind of -- which weighed on the Q3 numbers and you kind of -- you highlight as uncertainty in the outlook. Do you have any insight? Are those -- maybe thinking of each of those ones separately, is there a scenario where the funding for those programs ramps back up? Or are those being phased out, and we just have to deal with it going forward and kind of ramp, we comp the impact next year?
Daniel McConnell: Timing is -- so the Inuit Child First, I don't anticipate that's going to ramp up again. But I know that there's a lot of works in place to try and get that to be the case. Jordan's Principle, that comes down to -- that will ramp up again, I think. When I don't know because it's between a negotiation now with some of the indigenous leaders on how it's going to be administrated. But it's already -- you could say it's already committed to by Canada. But as you recall, the vote came through with the chiefs in the regions, and they had voted that they weren't going to accept it, and it wasn't based on the quantum or the settlement. It was more based on the -- how is it going to be administered within their communities. So as you know, Ontario actually elected to accept it and the rest of the regions declined it. And so that was one of the major causes of some of the retraction of the Jordan Principle money. And so I do anticipate that will come back around, but it's stuck in some political dispute right now. So I couldn't venture a guess as far as when that's going to be resolved. But once it is resolved, it will be a positive for sure for the community members in the North.
Stephen MacLeod: Okay. That's helpful. And then maybe just turning to the international business because we don't want to leave any stone unturned here. You get a lot in Canada. Just obviously, kind of flattish same-store sales growth. And were you seeing obviously, the permanent fund dividend was a negative impact as well as weaker economic conditions in the South Pacific. So can you talk about what some of the positive offsets were to those 2 headwinds?
Daniel McConnell: Sure. So the positive offsets a little different, a lot of book, not necessarily transacted, but there -- we have started to sell more big ticket in Alaska, although I think the seasons ahead are going to be stronger than prior, but we will see a big increase in particularly schedules in Alaska, but also we had a new store come online, which is a -- which is real positive, which was real positive for AC. So that was a nice offset as well, new store in Barrow, Alaska. So that was -- that's a really nice community and it's going to be a good asset for Northwest for sure. Otherwise, the team is working hard right now. It's a tough environment in Alaska -- and the Caribbean again, is starting to -- it's doing fine, and it's had some -- it's been stable, but it's really the South Pacific that has been a bit of a drain on -- and just getting back from some of the -- some of the typhoon work and just the economy is -- the competition has increased and the economy has worsened. So -- it's kind of a tougher situation, but we're optimistic next year that some of the strategies that we're putting in place are going to hold us in a good stead. We're combining some of our operations and building a more impactful, efficient store that's going to take you out and put one in, and we think it's going to make a real positive impact in Guam.
Stephen MacLeod: Right. And then maybe just finally, with the maybe not a reduction in SNAP benefits, but the noise around SNAP benefits through the Big Beautiful Bill, -- did any of that sort of work into your numbers? And was that an impact in the quarter?
Daniel McConnell: I think that's more this quarter, Stephen. So that will be -- have a little bit of an impact on this quarter. And it was -- yes, it was a bit of a there.
Operator: Our next question will be coming from Ryland Conrad of RBC Capital Markets. .
Ryland Conrad: Just starting off on the $23 billion settlement and the payment volumes being low there today, like have you actually observed any in-market spending from those payments? Or is that what you're expecting to be more of a Q1 event? .
Daniel McConnell: You mean the -- sorry, the individuals that did get payments have we seen an increase in spend of those payments in our stores. Is that what you mean?
Ryland Conrad: Yes. Correct. Yes.
Daniel McConnell: Yes. And yes, we have. And as we said, -- we've seen a good -- we've retained a lot of those -- our expected retention on the money that we've been able to track in markets. .
Ryland Conrad: Okay. Great. And then just on the two open classes within that settlement. I guess can you just talk about your expectations around those, I think -- from my perspective, it seems like more of the renewed child family class compensation would be flowing to individuals on reserve in your markets. So just curious to hear your thoughts about those two.
Daniel McConnell: I don't really have too much thought around it other than the fact that we're excited for the rest of the class to open, but this is just getting going. So I don't know, maybe I'm not understanding your question. Could you go a little deeper as far as how I think about the quantum, is that?
Ryland Conrad: Yes. I guess just with how the money is flowing to the individuals that are eligible under those classes. I guess there would be obviously circumstances where children might have been renewed from their homes under the renewed child class that are no longer on reserve. So maybe directionally, there'd be more money flowing to reserves through the renewed child family class, if that makes sense.
Daniel McConnell: No, I don't know. Sorry, John, do you understand the question. I'm sorry, I'm having a tough time. Do you mean money going to the reserve to the council or the administration on the reserve rather than the individual?
Ryland Conrad: No, two individuals. .
Daniel McConnell: But like we can take it offline as well.
Ryland Conrad: Yes, that would be great. Sorry. And then just on international on the PFD. I mean we've seen a few years of lower dividends now. Next year is an election year in Alaska. So do you think it would be reasonable to assume that we should see a larger PFD next year?
Daniel McConnell: No, I don't think it's -- it's not always rational, it's next year is not an election year. So the election year usually when they ramp up. And if you remember, it's been as high as 3,000 plus, last year 1,000 this year. I don't anticipate it will go down, but I don't think it would get in my kind of experience is just watching the cycles. I don't expect it's going to triple and it's tough to even forecast what it's going to be, but I would not anticipate it would go down. I would say, if anything, marginally up, but it's yes.
Ryland Conrad: Okay. Got it. And then just lastly on private label. I know it's still early days, but I guess, could you just provide an update on how many stores are now stocked with those products? And just whether you've seen any trade down from the national brands?
Daniel McConnell: Yes. Most of the stores are now stocked with the private label. With the exception of a few, like, for example, where we're doing a major renovation in Calgary, for example, which is a substantial store and a couple of others, but most of the stores are up now with the private label offering.
Operator: I'm showing no further questions. I would now like to hand the call back to Mr. McConnell for closing remarks.
Daniel McConnell: All right. Well, thank you, operator. Yes, really, I'd just like to -- I wish everybody a very best of the holiday season. And I look forward to speaking to you on our Q4 earnings in April. So thank you.
Operator: And this concludes today's conference call. Thank you for participating. You may now disconnect.