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Metro Inc
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Good afternoon. My name is Jessa, and I will be your conference operator today. At this time, I would like to welcome everyone to the Metro Inc. 2019 First Quarter Results Conference Call. [Operator Instructions] Mr. Roberto Sbrugnera, Vice President, Treasury, Risk and Investor Relations, you may begin your conference.
Thank you, Jessa. Good afternoon, everyone, and thank you for joining us today. Our comments today will focus on the financial results of our first quarter, which ended December 22, 2018. With me today are Mr. Eric La Flèche, President and Chief Executive Officer; and François Thibault, Executive VP and Chief Financial Officer. During the call, we'll present our first quarter results and comment on its highlights. We'll then be happy to take your questions. Before we begin, I would like to remind you that we will use in today's discussions different statements that could be construed as forward-looking statements. In general, any statements which does not constitute historical fact may be deemed as a forward-looking statement. Expression such as expect, intend or confident that, will and other similar expressions are generally indicative of forward-looking statements.The forward-looking statements are based upon certain assumptions regarding the Canadian food and pharmaceutical industry, the general economy and our annual budget as well as our 2018/2019 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. A description of these risks, which could have an impact on these statements, could be found under the Risk Management section of our 2018 annual report. We believe these statements to be reasonable and pertinent at this time and represent our expectations. The company does not intend to update any forward-looking information, except as required by applicable law. I would now like to turn the conference over to François.
Thank you, Roberto, and good afternoon, everyone. To start, I would like to, again, remind everyone that the closing of the Jean Coutu acquisition was completed on May 11, 2018, and therefore, last year's Q1 does not include the result of the Jean Coutu Group. In addition, the first quarter last year included significant gains as a result of the disposal of our investment in Alimentation Couche-Tard. But before getting into the numbers, I wish to highlight 2 transactions that were completed in the quarter: first, we divested 5 pharmacies out of a total of 10 as per the agreement reached with a Competition Bureau following the Jean Coutu acquisition. The sale resulted in a gain of $7.4 million, which is included in our operating income.Secondly, we sold our investments in Colo-D, an operator of data centers in Canada for a total cash consideration of $58 million and a pretax gain of $35.4 million. That gain is included in a separate line in our P&L below financial costs. The investment in Colo-D was held by Jean Coutu. We exclude both these gains in calculating adjusted earnings. As for Jean Coutu, we realized in the quarter synergies of $10.7 million, representing an annual run rate of $28 million. I will now turn to our quarterly results. Total sales for the quarter reached a little under $4 billion versus $3.1 billion last year, an increase of 27.8%. Excluding $757.1 million of sales from Jean Coutu in this quarter, sales were up 3.5%. Food same-store sales were up 3.2% and inflation of our food basket was about 1.8%, and pharmacy same-store sales were up 1.5%. Gross margins stood at 19.4% of sales in the first quarter compared to 19.5% for the same period last year. Excluding Jean Coutu, gross margin stands at 19.8%. Operating expenses as a percentage of sales came in at 11.3% versus 12.5% last year. On an adjusted basis, the ratio for this quarter was 11.5% versus 12.1% last year. The lower ratio is due in part to the inclusion of Jean Coutu, which is partly offset by increasing costs, namely the minimum wage in Ontario as well as transportation cost. Also note that the expense ratio last year was reduced by about 20 basis points due to real estate gains net of IFRS impairments.Adjusted EBITDA stood at $313.2 million, up $82 million or 35.5% and represented 7.9% of sales. Excluding Jean Coutu's EBITDA of $86.9 million, adjusted EBITDA amounted to $226.2 million, a 2.1% decrease versus last year's quarter. However, if we factor in the impact of the minimum wage increase in Ontario as well as the net gains of real estate last year, the EBITDA, excluding Jean Coutu, is higher by about $10 million on a year-over-year basis. We are pleased with the performance of our legacy food business. The income tax expense for the quarter was $66.7 million, representing an effective tax rate of 24.7%. Last year's effective tax rate of 14.7% is a result of the gains on the disposal and revaluation of our investment in Couche-Tard. Net earnings and net earnings per share for the quarter totaled $203.1 million and $0.79, respectively, versus $1.3 billion and $5.67 per share in Q1 last year, where we recorded large gains on the disposal of our investment in Couche-Tard. On an adjusted basis, net earnings were $172.2 million compared with $126.7 million last year, that's up 35.9%. Adjusted EPS was $0.67 versus $0.55 last year, an increase of 21.8%. You will notice on the cash flow statement that the cash generated by operating activities was negative. This is due to a onetime payment of about $200 million in income taxes due on the gain on sale of our shares in Couche-Tard. Finally, yesterday, the Board of Directors approved a quarterly dividend of $0.20 per share, representing an increase of 11.1% versus last year's quarterly dividend of $0.18. This represents the 25th consecutive year where we raised our dividend. That's it for me. I will now turn it over to Eric.
Thank you, François, and good afternoon, everyone. We are very pleased with our first quarter results, building on the good momentum we saw at the end of fiscal '18 with strong same-store sales and adjusted earnings growth. Food same-store sales grew by 3.2%, fueled by higher customer counts and basket size growth. Our food basket inflation rose to 1.8% from 0.8% in the previous quarter, driven mostly by produce. Effective merchandising and good store execution allowed us to perform well across all banners. The competitive environment was very similar to previous quarters with no significant change in consumer behavior.We are also pleased with our pharmacy same-store sales showing prescription count growth of 2.2% and front of store sales growth of 2%, driven by increases in all core categories. So I would say overall, a strong sales performance especially considering that the quarter ended on December 22 this year versus December 23 last year, shifting a busy shopping day to the second quarter. For the quarter, CapEx totaled $58 million as we expanded, renovated or remodeled 10 stores and closed 2 small stores for a net decrease of 30,000 square feet. We are also investing in technology and automation to improve both productivity and customer experience. Turning to the Jean Coutu Group, the integration is progressing well. As François said, we achieved $10.7 million of synergies during the quarter, bringing the annual run rate to $28 million. Private label cross-selling between food and pharmacy has started. Procurement synergies will be finalized in the first year, and we are actively planning the conversion of the retail systems at Brunet and the eventual transfer of operations from the McMahon warehouse to the Coutu warehouse next year. So we have lot of work ahead of us, and we are confident that we will reach our target of $75 million of synergies after 3 years.The Ontario DC modernization project is also advancing on schedule. We are in the final stages of the site plan approval process in Toronto, and we will start building this spring.On the e-commerce front after 2 years, we're pleased with our progress in Québec. Although still modest, sales are growing and our operating model is getting better every month. We will be launching our model in GTA in late spring as planned.So fiscal 2019 is off to a strong start and our outlook for the rest of the year is positive. We have now cycled the significant labor cost headwinds of the last year. We're experiencing more -- a more normal level of food inflation and our pharmacy integration plan is on track.We are confident in our strategy and our execution to continue to grow our business and create value for our shareholders. So those are my remarks, and we'll now be happy to take your questions.
[Operator Instructions] Your first question comes from the line of Mark Petrie from CIBC.
I just want to ask you about the gross margin percentage, and I want to specifically focus on the food business. And could you comment just sort of directionally about how that performed? And where the pressure is there more of a inability or not wanting to pass cost increases to customers or a reflection of sort of increase in promotional activity?
So I'll just take the first part. The gross margin in the legacy food business is up versus last year as François said in his opening statement. I think from 19.5% last year to 19.8% this year. That's the gross margin, excluding Coutu. So we feel good about that. And it includes EBITDA synergies, but overall, we're pleased with our gross margin.
Okay. And for the food same-store sales growth, even in the context of higher inflation, obviously, a very great number. Can you just give some color there in terms of the drivers, be it channels or regions or were you generally satisfied with how you sort of balanced the tonnage and the gross margin?
We're quite satisfied with the performance of all of our banners across all regions. It was -- we don't give you specifics, but it was broad-based and a very good performance all across.
Okay. And then I guess, just one last one. No NCIB activity in the quarter, but a $0.02 dividend increase. Can you just give us some background on the criteria for that decision and sort of expectations for how the NCIB plays out going forward?
Well, the dividend increases is nothing new. We've increased our dividend for 25 straight years now. So the -- we're at the upper range of our -- upper limit of our range, but within that limit pro forma basis, with the Jean Coutu earnings. So feeling good about the dividend increase, and I think it reflects our financial picture pretty well. The NCIB was authorized in November. We had a large Couche-Tard tax-related payment to make at that time, and the stock was performing pretty nicely in -- late in the year. So we didn't start using it, but we will start eventually to use the NCIB. So we're going to continue our mix of retaining -- returning capital to our shareholders via the NCIB and the dividend. And that's been a model that has worked well for us for a long time, and we see no change.
Your next question comes from the line of Patricia Baker from Scotiabank.
Eric, just on the Ontario DC and you said that the -- you expect that the site plan approval process is still undergoing, expected to be complete reasonably soon. Can you give us a sense of when you expect that? And then can you just refresh for me just how big this warehouse is going to be or the DC, rather?
Yes, so the STA process is live as we speak. So we're in the final stages with the municipal officials. So I hope to have a positive outcome through that pretty soon. It's literally day by day, and we're still planning to start, as I said in my opening remarks, this spring. So that's still the plan, and I'm confident we'll be able to respect that plan. I don't have the specific size of the increases in front of me, Patricia, I'm sorry, but it's 2 -- we're doing 2 major projects on site. So on the -- I would say on the east side of the 427 in Dundas, we have our fresh produce center so that's being expanded to have a larger fresh center for both produce, meat, dairy and deli. So that's going to take place. And on the west side, at the Westmount, we're going to build a new freezer. So both of these facilities will be fully or partially automated. So it's a large project that will take us to 2023, but we anticipate good benefits, more product assortment and certainly more efficiencies, more productivity to better service our stores. So it's a large commitment, a large project, a lot of work for our teams. And it's going well so far.
Okay. Excellent. And just want to come back to the drug store or the Jean Coutu piece. And I recall -- if I recall correctly on the last conference call for the last quarter you had indicated that some of the Brunet franchisees were starting to buy from a Pro Doc. Has that picked up? And has that increased -- has there been an increased pace of purchase there or more people joining onto the Pro Doc program?
The answer is, yes. So it's progressing gradually store by store, pharmacy by pharmacy as -- pretty much as planned. So the Pro Doc team is trying to convince Brunet franchisees to buy from Pro Doc. So there's been growth in that number as per the plan.
Your next question comes from the line of Irene Nattel from RBC Capital Markets.
You noted in the opening remarks that the 1.8% inflation was mostly in produce. Can you talk a little bit about what you're seeing in the center of store? And whether you're starting to see any pressure there?
We're seeing a bit of inflation in center store. So it varies by category. But overall, the center store, there's a bit of inflation, it's below the 1.8% that we're reporting for the whole basket. But there's a bit of movement there, center store also. There's a bit of deflation in meat certainly, the promotion and activity in meat still very aggressive. Produce, as I said, is the main driver. We're not seeing increases like we saw 2 years ago. It's manageable. A lot of its FX related. Some of it is lettuce was an issue in the fall. So shortages that kind of stuff. But manageable inflation. So I alluded in my remarks to more normal levels. So in the 2% range for us is the more historical normal number and that's where we are. So I think, that's positive for the business.
That's great. And you noted also that you're it seeing across all regions across all banners. I think last quarter you noted -- last couple of quarters that with the strength in the economy in Québec you were seeing a bit of a return of traffic to the, I guess, to conventional. Would you still say that's the case?
Well, as I said, all banners are -- had good performance. So pleased with that. The economy remains strong. Our Metro banner in both markets is doing well; pleased with that. And the discount per customer is there. So we're -- our multi-format, multi-banner approach we think serves us well in this market. So we can appeal to a broad base of customers and I'm very happy to report that we're pleased with the performance across banners, across divisions.
And then just one final, if I may. You also noted that you're starting to see some cross-migrations of private label. And kind of wondering what the consumer reaction has been, what the uptake has been. And also what the reaction has been on the part of the PJC pharmacists or the pharmacist associates, the franchisee.
It's still very early days. Not all categories are done. So we're introducing it gradually, category by category within the Jean Coutu stores. We're talking about huge selection and the Irresistibles products. Examples, cookies are done. Some layouts like that are done. So I wouldn't say it's had a material effect on their sales, but it's I think a positive sign of the cross-selling opportunities that we will have over the next little while. So that's one outcome. And then Personnelle is Coutu's private label brand for HABA and OTC. That's gradually coming into the Metro and Brunet networks as we take out the Selection items in those categories. So it's a gradual process. And it's being done in an orderly way with no really significant noticeable change in our sales so far.
Your next question comes from the line of Michael Van Aelst from TD Securities.
Thanks for the color on the gross margin on the food side, but yes, when I do the quick math, assuming I haven't done it too quickly, it seems like SG&A was up at least 8% in the food business on a year-over-year basis. So can you explain some of the key drivers of that?
I'll let François take that.
Yes, so, Mike, it's basically, minimum wage is a key driver. And last year, as we said, we had a real estate gain net of IFRS impairment of about 5.5. So when you take minimum wage in that gain, it's about a $15 million swing from 1 quarter to the other. That explains most of the variance in SG&A.
Okay. And, I guess, going forward the minimum wage impact is back to normal?
That's right. So we're comping that now. So that's why I said we were pleased with the core legacy performance of the business because those are onetimers if you will, that we're cycling the minimum wage and that real estate gain was -- we don't adjust for real estate gains in IFRS because we typically have some throughout the year. But it was an amount that was worth pointing it out, so that's -- to your point, that's exactly it.
Even if I take those out, it's still about a 4% growth rate remaining?
That's right. It's about 4.2% increase in EBITDA. Yes.
Well, sorry, in the SG&A though, it still seems to be growing at a decent pace even if you back out that $15 million?
Well, we -- SG&A, yes, but we have the Coutu business that's incorporated as well. Even though the SG&A as a percentage is lower than the dollars increased.
Yes. I excluded that, but maybe I can follow-up offline to see if I'm doing...
Yes. No, I'll give you the -- but the -- that's before the exclusion you're talking about, as I said, a $50 million swing from 1 year to the other just for those 2 items. And of course, there's transportation costs, which we absorb and that's fine, that's part of our numbers, but these are the 2 main ones.
Okay. Are you able to quantify at all the impact of pulling romaine and other lettuce from the shelves? Is that something that has a meaningful impact or did people just buy other products, other vegetables?
Well, we can measure the impact on the shrink and on the losses of the romaine lettuce we had to give -- to throw out. So that was about $1 million all in for the company. What were the lost sales and lost margins, that's a number I can't really give you. I don't have it and it's hard to know. There's -- they switched to other lettuces and those few weeks, lettuce consumption was down generally. They switched to other vegetables and stuff maybe. Hard to measure.
Yes. And just a follow-up on the DC comp questions. 2023, are they both opening in 2023?
They -- one starts at the end of 2020, the first phase of the first one. And then we go back to the other building in 2022 and then back to phase 2 of the other one in 2023, so it's staggered over a period starting in late 2020.
Okay. And how do you describe like the returns you're expecting on this. I know the other DCs are older and they were kind of hitting capacity from what I recall. Is this more -- is this a project to expand capacity or to what degree is that they're expanding capacity versus to drive better margins and better cost performance?
Well, it's both. We -- our business is growing, we want to keep growing. And to do so, we need more capacity in some of our centers. So that's a key driver. And also, as I said earlier, productivity is also a key driver. Therefore, that's why we took on the automation project. It's a pretty sizable investment, but our analysis shows that we're going to get decent returns above -- at or above hurdle rates that we're used to have. So clearly, we look for return on our investment. And at the same time, we are needing to add some capacity. So it's both as we build business cases over a long period, you look at, do you do it conventional, do you do it automated and you look at the benefits versus the investments and that's how you -- that's how we make sure that we earn that return.
Yes. Just a last question. I know they're not as big, but could you kind of compare and contrast the performance of both the Première Moisson to MissFresh as you've added them into your stores. So you're -- forgetting about the stand-alone businesses, how are they performing in your stores?
So for competitive reasons, we don't want to give too much color on that, but the reasons we made those deals or acquisitions was to -- for the most part improve our Metro stores, our food stores on the fresh side, and we're happy with those results so far. And we see more opportunity going forward. So it's work in progress, but clearly, our bakeries have stepped up. In the province of Québec, especially, we have strong bakeries in Ontario already even with Outaouais and Moisson. But it was a good step for us on the bakery side. The meal kit business is quite small. It works on its own subscription base, as you know, and we're introducing it more and more into our Metro stores. And the sales are modest and for sure, it's something that you have to invest in to get the customer to buy in. So we're on that, and we'll have to stay tuned.
Your next question comes from the line of Jim Durran from Barclays.
I just want to go back to the Rx comp store sales number of 0.8%. Would that number have been consistent with what you saw since you acquired the Jean Coutu business? And I assume, it's both Brunet and Jean Coutu merged number.
Yes, it is a merge, it's a combination of the drugstore business. I would say the numbers are consistent with the performance Coutu has been seeing for a while. The timing of our quarter ends is different from what they were used to. So on the script count, the first of the month is an important date. This quarter ended on 22nd of December, as I said earlier. So there's a bit of a timing on that. But overall, over a longer period, the script count growth has been pretty steady and consistent with our expectations.
And what's the outlook for patented drug conversion in your fiscal year?
I'm sorry, I didn't get that.
The outlook for patented drug conversion to generic, is there any significant tonnage transitioning from that from branded to generic this year or is it fairly normal year?
I don't have a specific answer, but to my knowledge there is no big drug coming of patent in the short term. I would have remembered from the business plans but I don't think there are. We can get back to you on that, Jim.
Okay. And on e-commerce, you talked about the fact that the business is small at this juncture, obviously. But have you seen any ramp up in consumer interest in transacting that way? Or is it generally evolving as you would have expected?
It's ramping up nicely. As I said, we're getting good growth. I don't want to say much more than that. The service is getting word of mouth and trucks are on the road, and we're active on the web. So yes, there is -- the business is growing nicely. We're happy with the sales growth, that's all I'm here to say.
Can you comment at all about the competitive environment in terms of the pass-through to the consumer of shipping and handling, like Walmart has changed its stance on that recently? And of course, with the Instacart offering, there is different mechanic definition there in terms of annualized versus per occasion. Like does that feel steady state or do you see that evolving over the course of time?
Well, as I said earlier, we think our model is well understood by the consumers. We charged fix fee for assembling the order, at fixed fee for transport and for delivery, which is clearly below cost. So we're comfortable with our model, our pricing model and our fee model. And again, as I said, sales are growing nicely so I think, customers are okay with it, are okay with the model. And we're monitoring that closely. We're the -- we monitor competition all the time everywhere. So we're very aware of what's being done out there, but we're comfortable with our model.
Your next question comes from the line of Peter Sklar from BMO Capital Markets.
Eric, I'm just looking at -- on the pharmacy side of the business, the front of store comp of 2%. I'm just looking -- I'm just looking back right now through Jean Coutu and there have been quarters where they've comped less than that, but certainly, a large number of quarters where they've comped stronger than that. I'm just wondering how you've felt about the front of store sales. Were you satisfied and was that consistent with your plan?
We're okay with the number, and it's pretty much on plan again. The quarter end date of December 22 had a pretty big impact on that on the drugstore side, the December 23 on front end was -- is a big day. So that shifted. We're not making excuses. I'll just tell you that we're comfortable with the number and if you consider that day, front end same-store sales would be clearly higher and we'd be -- we're comfortable with the number.
Okay. And then just the other thing I wanted to ask you about, the sale of the -- your interest in Colo-D. Could you just give some backdrop to that business of how you acquired it and why you're selling your interest?
François will take that.
So it was already a part of the Jean Coutu Group. This was an investment they had made at the -- this is a high-end operator of data centers. So we had a minority position in that business, and the business decided to divest, and we basically followed. So it was noncore. So it was a nice cash inflow and a nice gain, but that's...
The origin of that investment was that the old Coutu warehouse was sold to Colo-D as a data center. And Colo-D was a small business at that time, 2 years ago, not that long ago. So it's been a great investment. And again, we're happy with the outcome.
Your next question comes from the line of Vishal Shreedhar from National Bank.
Just on the gross margin. I just want to validate my math here. If you take the 30 bps increase in the Metro legacy gross margin year-over-year, does that mean that the PJC gross margin was down about 230 bps-ish? I know it's not perfect, but we tried to prorate as best as possible.
Well, the Coutu business was a low 18% gross margin, that's why the blend is -- gives the number it gives now.
No, but if Metro is up, legacy -- he's saying, PJC was down pre -- versus pre-Metro. So my answer to that is, I don't think so. We can do the math offline, but no.
Okay. Okay. When you acquired PJC, when you acquired pre, I guess, your time, management was talking about efficiencies in the Varennes facility. Just wondering if those efficiencies you're starting to see them come through, and you're starting to see some benefits there just relate to how that DC is operating.
Yes, there are efficiency gains, productivity improvements steady ongoing at Coutu since we closed the transaction. So I think they had basically corrected the ship before closing. Even before the announcement, they had ramped up productivity pretty nicely, and it's still improving. Albeit at slower pace than it did. They had caught up already. So yes, we're -- same as Metro, we're always looking for improved productivity in our DCs and in our stores. So Coutu makes no exception, and we're looking for more. And we're seeing a bit more, and we anticipate even more going forward.
As part of our due diligence. Yes. As part of our due diligence, there was a plan to increase productivity in all costs per case et cetera, and it's something that we have been tracking. As Eric said, it's been tracking well on plan.
Okay. So most of that benefit has been captured, I mean, a little bit less than the next leg comes when you transfer McMahon over. Is that the way to think about it?
Yes, yes. Most of it has been captured as you say, but it doesn't mean there's not room for improvement. And with the McMahon transfer -- eventual transfer that facility will become even more productive.
Okay, that's helpful. And just changing the topic here. And this is a longer-term question. This might be a bit of a tricky to answer but as Metro increasingly accommodates e-commerce and digital, you noted that it's small yet, but it's growing rapidly so as it accommodates in a bigger way and conceivably pressures margins for the entity, should we expect that to weigh on EBITDA margin over the longer term or does management has plans in place when that business gets bigger to offset the pressure perhaps less store retrofits or pricing adjustments, et cetera?
Well, we're in the investment mode and the test-and-learn mode now. So yes, it's dilutive a bit to our legacy margin. But as the business grows and as the operating model becomes more efficient, our plan is to have a profitable business. But we will just have to see how it evolves. What size it gets and how -- what's the operating model. So again, very much early days and learning and improving every month. Our plan is to grow the business, not shrink the business, and we still think bricks-and-mortar will be the vast majority of our business. And that we can achieve the margins that we are known for on that side. On the e-comm side, we'll try to manage as best we can to respect our profitability model. But we have to look at it all in, the whole company, food, pharmacy, e-comm, bricks-and-mortar. And I think we can continue all in to deliver growth to our shareholders.
Okay. And just on the testing phase, are you content with the way you're testing right now having your own delivery network deliver the food or could you investigate a third party as well?
Well, again, without getting into everything, we own the fleet of trucks that delivers e-commerce, but we deal with a third-party company that does the driving. Now e-commerce is a new business, and it's attracting new customers. So it's not necessarily -- you're not just losing your existing customers from your stores to transfer to e-commerce. Some are, but as we develop the e-commerce business, we're getting new customers. So that's why we think that we can maintain our profitability all in, overall.
[Operator Instructions] Your next question comes from the line of Keith Howlett from Desjardins Securities.
I was wondering if you could speak to the network development within the pharmacy stores in the quarter, and what your plans are for the year.
So the CapEx or the network development on pharmacies has been mostly renovations in the last quarter. So we're really looking at optimizing the Brunet and Coutu networks. So our real estate team is actively looking at that. We're not looking to add that many stores and certainly, not in the short term, but optimizing the network. So the investments at retail and pharmacy have been mostly with renovations. I would say they were about 10 renovations done over the course of the -- more major renovations done in the quarter, a lot of smaller projects to incorporate new layouts and categories and cosmetics, 30 or 40 of those. But significant renovations about 10 in the quarter. And the plan is to do between 30 and 40 renovations a year.
And then -- I'm sorry, I might have missed it. Did you speak to traffic in basket in food and pharmacy or...
I did allude to traffic, higher customer accounts and higher basket growth in our stores and higher prescription count growth in our drugstores. So yes, we got tonnage growth for sure.
Great. And then just in terms of asset sales, I know that Jean Coutu had some minority positions in a number of other sort of affiliated businesses, I guess. Are you looking at any other assets sales over the next year, or is that be pretty much concluded with the next 5 pharmacies that you'll sell?
So the next 5 pharmacies are basically sold. We will report that with our second quarter. 4 of them have transferred to the buyer. The last one will transfer shortly. So those are done. Other asset sales, they're not that many other assets in the Coutu business, there's mid-SKUs that I can think of off-hand, and we have no plans to divest that for...
Pretty much done. Yes.
So we're pretty much done.
There are no further questions at this time. I turn the call back over to presenters for closing remarks.
Thanks, Jenna (sic) [ Jessa ]. Thank you for joining us today, and our next call for the second quarter will be held on April 16, 2019. Thank you.
This concludes today's conference call. You may now disconnect.