Earnings call transcript: North West Company Q1 2025 sees mixed results

North West Company Inc. reported its first-quarter 2025 earnings, revealing a mixed performance with earnings per share (EPS) slightly surpassing expectations but falling short on revenue forecasts. The EPS came in at $0.6417, exceeding the forecasted $0.60, whereas revenue was $641.4 million, below the anticipated $648.2 million. Following the announcement, the company’s stock declined by 5.4%, closing at $54.29, reflecting investor concerns over revenue shortfall amid positive earnings. According to InvestingPro data, the company maintains strong financial health with a "GOOD" overall score and has demonstrated consistent dividend payments for 35 consecutive years, including raises for the past 6 years.

Key Takeaways

• North West Company reported a 3.9% increase in consolidated sales for Q1 2025.
• EPS exceeded expectations, but revenue fell short of forecasts.
• The stock price dropped 5.4% following the earnings release.
• The company is focusing on operational excellence and cost efficiencies.
• Continued uncertainty around economic conditions and tariffs.

Company Performance

North West Company demonstrated resilience in Q1 2025 with a 3.9% increase in consolidated sales and a 2.2% rise in net earnings. The company also reported a 7.2% increase in gross profit dollars, with the gross profit rate rising by 103 basis points. However, expenses grew by 8.7%, impacting overall profitability. InvestingPro analysis shows the company maintains a moderate debt level with strong cash flow generation, achieving an EBITDA of $205.86 million in the last twelve months. The company remains committed to expanding its private label offerings and optimizing inventory and labor processes.

Financial Highlights

• Revenue: $641.4 million, below the forecast of $648.2 million.
• Earnings per share: $0.6417, above the forecast of $0.60.
• Gross profit increased by 7.2%.
• Adjusted net earnings rose by 14.2%.

Earnings vs. Forecast

North West Company’s EPS of $0.6417 surpassed the forecast of $0.60, representing a positive surprise of approximately 6.95%. However, the revenue of $641.4 million fell short of the expected $648.2 million, marking a miss of around 1.05%. This mixed performance reflects challenges in meeting revenue targets despite strong earnings.

Market Reaction

Following the earnings release, North West Company’s stock fell by 5.4%, closing at $54.29. This decline suggests investor dissatisfaction, primarily due to the revenue miss. The stock is currently trading closer to its 52-week low of $40.42, indicating potential investor caution. Based on InvestingPro’s Fair Value analysis, the stock appears to be undervalued at current levels. The company maintains a P/E ratio of 9.85 and has delivered strong returns over both three-month and five-year periods. Subscribers can access 8 additional ProTips and comprehensive valuation metrics through the Pro Research Report.

Outlook & Guidance

North West Company is anticipating ongoing costs related to its Next 100 program through 2025-2026, with a clearer outlook expected by late 2026. The company remains vigilant regarding economic conditions and tariffs, as well as the impact of wildfires and changes in Inuit Child initiative funding.

Executive Commentary

CEO Dan McConnell emphasized the company’s focus on controllable factors, stating, "We continue to remain optimistic in the things that we can control." He highlighted adjustments in promotional strategies, noting, "We’ve adjusted the guardrails as far as how we value the promotions, taking a different form of a financial lens."

Risks and Challenges

• Economic conditions and tariffs remain uncertain.
• The impact of wildfires affects approximately 10% of stores.
• Changes in Inuit Child initiative funding could influence operations.
• Ongoing costs from the Next 100 program may pressure margins.
• Market volatility could affect stock performance.

Q&A

During the earnings call, analysts inquired about the impact of wildfires on operations, changes in Inuit Child initiative funding, and improvements in promotional strategies. The company also provided insights into North Star Air’s performance and addressed concerns regarding general merchandise sales. For detailed financial analysis and expert insights on North West Company’s performance metrics, growth potential, and peer comparison, access the comprehensive Pro Research Report available exclusively on InvestingPro.

Full transcript - North West Company Inc (NWC) Q1 2025:

Conference Operator: This conference is being recorded.

Participants, please stand by. Your conference is ready to begin. Please be advised that this conference call is being recorded. Welcome to the Northwest Company Inc. First 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.

Dan McConnell, President and Chief Executive Officer, Northwest Company Inc.: Thank you very much, and good morning. Welcome to The Northwest Company’s first quarter conference call. I’m joined here today by with John King, our Chief Financial Officer and Alexis Clucher, our VP Legal and Corporate Secretary. I’m going to start the meeting by asking Alexis to read our disclosure statement.

Alexis Clucher, VP Legal and Corporate Secretary, Northwest Company Inc.: Thank you, Dan. Before we begin today, I remind you that certain information presented may constitute forward looking statements. Such statements reflect NorthWest’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 NorthWest’s annual information form and its MD and A under the heading Risk Factors.

Dan McConnell, President and Chief Executive Officer, Northwest Company Inc.: Brief overview of our consolidated results for the quarter, followed by some additional in place on our Canadian and international operations. Finally, I’ll wrap up with a few comments on our outlook, the NEXT 100 program and the wildfire situation in North Canada. Okay. So let’s dive right in. We’ve had a positive start to the fiscal year, especially when considering that we’re comparing to a very strong first quarter last year.

Consolidated sales in the quarter were up 3.9% and net earnings increased to 2.2%, which is on top of a 22.3% increase last year. These results were driven by same store sales gains and an increase in gross profit rate, largely due to changes in sales blend and lower markdowns. These factors were partially offset by an increase in M and A expenses, largely related to an increase in share based compensation, resulting from a higher share price and an X100 per gram cost. Let me briefly explain on the consolidated results. So both Canadian and international operations contributed to strong top line performance, which was driven by same store food sales gains of 4%.

Gross profit dollars were up 7.2% for the quarter due to sales gains and a 103 basis point increase in the gross profit rate largely due to changes in sales blend, including a lower blend of wholesale sales and a decrease in markdowns, including the positive impact of more effective data driven promotions as a part of our Next 100 work. Expenses were up 8.7% for the quarter or 120 basis points as a rate of sales, primarily due to higher staff and technology costs to support the next 100 work. Combined with an increase in depreciation and the impact of foreign exchange on the translation of international expenses, This increase in expenses includes a 2,100,000 in onetime cost for professional fees related to the execution of our Next 100 program. These onetime costs were offset by the financial benefits from our Next 100 initiatives, including more effective promotions, a reduction in print media and other cost savings initiatives. We are also seeing store labor productivity gains, which is lowering store staff costs as a percentage of sales.

The net impact of all these factors resulted in solid bottom line results with net earnings increasing 2.2% in the quarter, which is on top of a 22.3 increase in net earnings in the first quarter of last year. Adjusted net earnings, which excludes the impact of share based compensation and NEXT 100 related onetime costs, increased 14.2% compared to last year. That overview, I will unpack these results beginning with our Canadian operations. Overall, we’re pleased with the results in our Canadian operations, particularly when you consider the impact of NEXT 100 onetime costs and higher share based compensation expenses and the fact that we are comparing to very strong results in the first quarter of last year. Top line perspective, total sales in Canada were up 2%, led by same store sales gains and the impact of new stores.

Breaking this down further, food sales increased 1.9% as a 5.1% increase in the same store sales was partially offset by lower wholesale food sales. One of the key factors contributing to the increase in same store food sales in the quarter was increased consumer demand from the Inuit Child initiative to provide greater access to nutritious foods that began to ramp up in the second quarter last year. I’ll come back to that in the context of our outlook. General merchandise and other sales increased 2.2% compared to last year as higher pharmacy and retail fuel sales more than offset softer general merchandise same store sales. Payments to individuals from the First Nations drinking water settlement continued in the quarter, which was largely comparable to last year.

In terms of gross profit dollars, Canadian operations increased 5.1%, and this was in the quarter due to higher sales and changes in the sales blend, including the impact of lower wholesale food sales. Similar to Q4 last year, the change in sales blend also included higher sales from foodservice and our fresh departments. Improvements in markdowns, including more effective data driven promotional activity as part of our next 100 initiatives were also factors. The impact of these sales gains and increase in gross profit rates were more than offset by higher expenses due to the Next 100 and share based compensation costs and other factors that I mentioned. The net impact of these factors was a 6.2% decrease in Canadian operations EBIT for the quarter compared to a 20.9% increase for the first quarter last year.

That said, adjusted EBITDA, which excludes the impact of one next one sorry, of the onetime next 100 costs and share based compensation expenses increased 5.8%, which is on top of an 11.3% increase in the first quarter of last year. Moving on to our international operations. Our international operations delivered very strong results this quarter with both sales and earnings gains. Same store sales increased 2.8% in total driven by same store sales gains of 2.6% in food and 5.2% in general merchandise. Favorable economic conditions in certain premium markets driven by an improved tourism season, more than offset headwinds on wholesale sales in Alaska as well as soft economic conditions in certain South Pacific markets.

Gross profit increased 5.4% due to higher sales and an increase in gross profit rate, mainly related to the change in sales plan, including the impact of lower wholesale sales in Alaska and higher market driven gross profit rates in certain Caribbean locations aligned with improved economic conditions. The impact of higher sales and an increase in gross profit rates were partially offset by higher expenses. But overall, these factors resulted in 11% increase in EBIT. That overview of our first quarter results. I’ll now briefly talk about the outlook, provide a few comments on the Next 100 program, and then we’ll finish off with some commentary around the wildfire situation in Northern Canada.

We provided commentary on key factors that we expect to impact our outlook in the first quarter report to shareholders. So I’ll briefly highlight only a few of the items. With respect to tariffs, we have started to see some increases, but overall, the impact has not been significant. However, this is a very fluid situation, and there continues to be uncertainty related to the economy and the impact of tariffs on the cost of merchandise and inflation in the countries in which we operate. As we previously commented, we expect consumer demand to continue to look positively impacted by the distribution of First Nations drinking water settlement payments through the remainder of 2025, but to a lesser degree as we are comparing to the payments issued in 2024.

Another factor I wanted to touch on briefly is the Inuit Child initiative, which began to ramp up in the second quarter of last year. The Inuit Child initiative or ICFI food voucher program provided broad access to nutritious food for Inuit children. As we noted in our outlook, on 03/21/2025, the government of Canada announced that it would extend the funding for the Inuit Child initiative until 03/31/2026 to support continuation of the program while Canada and Inuit partners work together on the development of a long term approach for supporting Inuit children to get access to nutrition foods. However, beginning in late April twenty five, funding under the ICFI has been limited to individual child specific claims. This change is expected to result in a reduction in the distribution of funding to individuals compared to the ICFI food voucher program in 2024, which provided much broader access and interest of food for inner children.

There’s uncertainty currently regarding how long this change in distribution of funding to individuals will last or if the ICFI food voucher program that was available in 2024 will resume. As noted in our report to shareholders, we continue to focus on driving operational excellence and cost efficiencies across our business and deliver further value for our customers, our employees and our shareholders through our Next 100 program. As part of the Next 100, we continue to refine our product assortment and have begun rolling out an expanded private label offering in our Canadian operations. We also continue to implement our store based inventory forecasting replenishment technology to improve on shelf availability as well as enhanced labor optimization processes that are resulting in cost savings and improved efficiencies. We are pleased with the progress to date on the operational improvements for our business and the financial results for our Next 100 program.

However, there’s still a lot of work to do as we embedded operational excellence in every aspect of our business. As these Next 100 initiatives mature, we expect to continue to incur onetime costs for professional fees through the of 2025 and into 2026, which we will highlight in our quarterly reports as we have done in the past. These onetime costs are expected to be fully offset by the annualized incremental EBIT from the initiatives. Before I open the call for questions, I would like to comment on the wildfires that are having a devastating impact on Northern Canada. Our thoughts are with all those who are impacted, and I wanna take a moment to thank the firefighters, community leaders, and all those working tirelessly to protect residents and ensure their safety.

I also wanna recognize and thank the Norwesters who remain in the communities to keep stores open and ensure food and supplies are available. Their passion and commitment to the communities we serve demonstrates the core values of our company. With that, operator, I would now like to open up the call for any questions.

Conference Operator: Thank you. We will now take questions from the telephone lines. If you have a question, please press 1. You may cancel your question at any time by pressing 2. Please press 1 at this time if you have a question.

Session. Our question is from Michael Van Aelst from TD Cowen. Please go ahead.

Dan McConnell, President and Chief Executive Officer, Northwest Company Inc.: Yes. Hi. Good morning. Good morning. Two questions for you.

of all, regarding the wildfires, you noted, you know, four communities have been evacuated, 10 semi evacuated. How many communities does Northwest operate in Northern Canada or in Canada in general? About a 140, Michael. 140. Okay.

So this is roughly affecting 10% of your sites? Yep. Okay. And do should we just assume that sales at these locations are next to zero for the short term? Minimize for sure.

But, you know, obviously, the 10 stores that are open are servicing, you know, other some of the emergency workers and the few the few people that are still in community. So I would say, yes, it’ll be significantly reduced, but then also keeping in mind that a lot of people that are in community go over to adjacent communities or other communities within a certain radius, and those stores would be positively impacted. But at the most part, it’s definitely got a negative impact on our sales, and it would be significantly less than what would be the normal case. K. And then with respect to the water settlement payments, I just wanna clarify your your the way you termed it or worded it.

So are the payments to individuals less in 2025 than in 2024, or is the growth rate you’re seeing from those payments less? Correct. The growth rate. So I’d say it’s it’s a it’s about on par, but we anticipate if you were to model it out for the year that it would be probably we anticipate it’ll be slightly less than last year. The growth rate or the revenues?

The the revenues. Okay. So the actual payments to the individuals is down year over year when it comes to this water settlement. We’re anticipating that for the remainder of the year. Like, when you once you analyze it, yes, we expect it to be less than it was last year, the revenue, and total of the payments.

Okay. So when you take into consideration, you know, the water sale payments being lower, the the food voucher program somewhat on pause or or limited for now, And, you know, and some of these wildfires, how yeah. The comps look like they get easier the next few quarters, but do they actually, given given the year over year changes? Well, you’ve you’ve raised a good point because there’s a number of unknowns there. However, you know, we’re we continue to remain optimistic in the things that we can control.

We’re definitely, you know, building momentum on. But, you know, it’s particularly towards the ICFI payments. I know there’s a lot of there’s a lot of talk and a lot of escalations from the inner community that are unsatisfied with the way that things are sitting currently. So as it’s not you know, they believe, and we would agree that it’s not reaching and having the impact that I think they would like it to have. So we’re hopeful that that will work its way out to be more similar to 2024 than where it sits currently.

As far as the wildfires, it’s anybody’s guess as to what’s gonna happen there, and we’ll just continue to stay on on guard and hope for the best. But the things that are within our control are are moving in the right direction. And yeah. So we’ll we’re remaining optimistic. K.

So would it be given the amount of variables that are out there right now, is it could you comment on what you’re seeing quarter to date in q two so far in terms of your sales same store sales and whether they remained positive or in Canada? You know what? We so we don’t typically do that, but I will say that, obviously, you know, that as per your question, the wildfires are having a a negative impact on sales, in Manitoba. It’s impacting, you know, up to 10% of our our stores. Excluding that, you know, it’s it’s still still fairly early in the quarter.

But like I said, we’re we’re continuing to drive forward, and we’ll remain optimistic until the and and we’ll report obviously If anything material happens, then we would obviously report that as well. Okay. I’ll pass on to someone else. Thank you.

Thank you.

Conference Operator: Thank you. Following question is from Steven McLeod from BMO Capital Markets. Please go ahead.

Dan McConnell, President and Chief Executive Officer, Northwest Company Inc.: Thank you. Good morning, guys. Had I had morning. Morning, Dan. I had some questions along the same lines as Michael had, but just wanted to ask about the Inuit Child initiative.

So if I understand it correctly, is it is it, you know, meaningfully pairing back the the programs that provide access to nutritious foods? And and are there any are there any kind of stop gap measures in in the interim? I mean, how should we think about the impact of that to, you know, food same store sales growth, which was quite strong in the quarter? No. No.

No. Nothing currently, but we yes. It has slowed down, and it’s it’s taking significant turn than where it was last year. However, like I said earlier, you know, I know there is a lot of there’s a lot of energy that’s being put towards getting it more back to a state that has the impact that it has per in the past as they see it as a there’s a significant gap in the in the availability of it for people that need it. So, really, that’s that’s all that we that we really know right now, but it’s there’s there’s there’s nothing that we’re aware of that’s that we could report really other than that.

And I wish I had more for you, Steven. You can appreciate that our our ears are close to it, and, obviously, we think it’s the right thing to do. But it’s just not something that that we’ve been able to get any more insights on other than what we shared with you. Yeah. Apparently.

Okay. Okay. No. That’s that’s fair and understandable. Just just with respect to the, you know, the the the larger First Nations solid family services program payments or program that’s coming through.

You you mentioned in the press release that you expect kinda payments to be distributed into q one of twenty six. You know, previously, I the wording was kinda late twenty twenty five. Do you have do you have, you know, very good visibility into that? Is there is there something changed with the program or or the application process just to give you insight into those payments beginning to flow through in early twenty twenty six? No.

Other than the fact that we think it’s it seems to be executed a lot a lot better than the the drinking water settlement. There’s a lot more visibility. There’s a lot more commercials, for example. I think there’s a lot more structure and transparency to it. I don’t think it’s quite as complicated as the the drinking water settlement payments.

So I think we’re still on the same track as far as when we think it’s gonna hit the market, but we don’t have any other insights to tell us that it’d be any sooner. But for what we see, we don’t think it it should be delayed any further based on what we see. But it as you know, some with these government programs, they’re not always as transparent as you’d like. But, however, everything we’ve seen so far looks like they’re doing things doing things right. Yeah.

Okay. Okay. That’s helpful. Thanks, Dan. And then maybe just finally, just in terms of North Star Air, I was just wondering if you just give a little bit of commentary on the performance of of the airline in the quarter.

And then, you know, are routes being impacted by the wildfires as well? No. In fact, yes, North Fair Airs had a good quarter. It was on expectation. And, yeah, we don’t there’s been no negative impacts as a result of the the fires so far.

If anything, it’s allowed us a little more flexibility to to help people and communities out given the flexibility to given us you know, obviously, the fact that we control the metal that is under North Star Air. So, no, nothing Yeah. I would say it’s the status quo. It’s delivering what we anticipate and expect. Yeah.

Okay. That’s that’s great. Thanks, Dan. Appreciate it. No problem.

Conference Operator: Thank you. Following question. Once again, please press one at this time if you have a question. Our following question is from Nishant Rathi from CIBC. Please go ahead.

Nishant Rathi, Analyst, CIBC: Hi. Good morning. This is Nishant on behalf of Ty Collins. Thank you for taking my question. Ma, I’m so sorry to I’m very sorry to hear about the communities affected by the wildfire, and we hope that everyone is staying safe.

I just wanted to circle back on the WiFi because I wanted to ask if you’re seeing any other financial impact from the WiFi and such a such as physical damage to the store or inventory as a result of the fire? Thank you.

Dan McConnell, President and Chief Executive Officer, Northwest Company Inc.: Great question. I think if I heard you properly, you said, is there other financial impacts as a result of the stores through asset damage or inventory. I’d say slightly we have so, you know, obviously, we the stores that were evacuated, we donated a lot of the product all the product that was perishable to ensure that people had food and nutrition at that point in time. Thankfully, there’s been no damage to any of our assets at this point in time. So we’re, you know, we’re staying again optimistic on that.

And, really, there’s been no major impacts on any of the assets, yeah, financially or other financial implications other than the the loss of sales, obviously, and some of the inventories that we had to to donate.

Nishant Rathi, Analyst, CIBC: Got it. My next question is regarding you mentioned that you are seeing better promotional tactics under the next 100 strategy as one of the primary drivers of margin improvement this quarter. Could you provide a little more detail on some of the changes that were made? And is there still more room for improvement from a promotion perspective?

Dan McConnell, President and Chief Executive Officer, Northwest Company Inc.: Yeah. Absolutely. We’ve adjusted the the guardrails as far as how we value the promotions, taking a different form of a financial lens to say, are these promotions are the customers finding them beneficial? So other words, are they moving the needle? So we’ve done a lot of analytics to understand what people like, what makes a positive impact, obviously, for our customers, and what fills the baskets as a result of some of these these promotions.

So we’ve done away with promotions that are maybe not sizable or and that and that don’t have a financial upside for Northwest. And just playing around with different algorithms, we’ve been able to kinda come into a a more productive manner where we have more green promotions than red. And, obviously, once we identify the the red ones, we’re discontinuing them. And it’s really just about how we you know, how the the amount of investments and the and the amount of response from the from the customers and just having more insights to analyze that and then replicate the good behaviors and and basically terminate the bad. That’s I know that’s pretty high level, but it gives you bit of insight as just to how we’re viewing the business and what’s how we’re drawing conclusions as to what is a good promotion and bad and how we’re repeating good behavior and stopping bad behavior.

Nishant Rathi, Analyst, CIBC: Got it. Thank you. And another question I wanted to ask was regarding the general merchant merchandise. It looks like general merchandise sales in Canada accelerated compared to this quarter. So what drove that change?

And is there anything to call out there in terms of consumer behavior?

Dan McConnell, President and Chief Executive Officer, Northwest Company Inc.: Yeah. Could you sorry. Could you repeat that question if I

Nishant Rathi, Analyst, CIBC: Sorry. I just wanted to know No. That’s okay.

Dan McConnell, President and Chief Executive Officer, Northwest Company Inc.: It’s just that there’s a bit of an echo in my room. That’s the only reason why. Say that again. Sorry.

Nishant Rathi, Analyst, CIBC: Yes. I want

Dan McConnell, President and Chief Executive Officer, Northwest Company Inc.: to said what is the reason for the general merchandise swing from last year this quarter to this year. Is that right?

Nishant Rathi, Analyst, CIBC: Yes. Anything particular to call about that and in terms of consumer behavior, anything to call on those two points. Thank you.

Dan McConnell, President and Chief Executive Officer, Northwest Company Inc.: Okay. No problem. In fact, yeah, like I said, there was a considerable pickup in in the perishable programs like our food service and our fresh, which is actually, encouraging because it’s where we put a lot of focus, especially with our labor programs, just reallocating labor to more areas of just being smarter. When I talk about our kind of data driven approaches, it’s really understanding where our efforts are within the store and how we can reallocate dollars to the more productive areas. And so that’s been great because it’s been allowed us to drive a lot more fresh and perishable product.

Obviously, it it requires more direct labor, and we’ve been able to kinda capture some of those activities that have that have allowed us to drive that business. On the GM side, you’re right. It it was not as strong, obviously, as last year. Last year, we had a a pretty sizable pickup, and we think it’s probably a a result of a ship a ship of dollars with the food drawing in more, maybe not having some of the other monies in market that that we anticipated or that was there last year potentially that that probably has an impact. We don’t see this concerning, though, and it could just be a shift within the season.

People will stock up. We had some strong general merchandise sales in previous quarter. So it’s we don’t think it’s anything material. It’s just a matter of consumer choices and it’s and and seasonality, the weather.

Nishant Rathi, Analyst, CIBC: Got it. Thank you so much. That’s all for me. I’ll leave it for the moment.

Conference Operator: Thank you. Our following question is from Michael Van Eelst from TD Cohen. Please go ahead.

Dan McConnell, President and Chief Executive Officer, Northwest Company Inc.: Yeah. Hey. Just one follow-up question. On your on your next 100 program, I’m curious how we should expect to see the benefits of of that program ramp up and and where when we start to see a full run rate. 2026 is is where we think it was it’s the the maturity of the program is gonna be John, I’m looking at the financial 75% there.

Is that a Yeah. ’26 would be. Yeah. So ’26 should be where we where we can be a lot more for you know, a lot more clear on what that run rate is. So let’s say 2026, we’ll be able to kinda give you direction on, okay.

This is the trend. This is the trajectory. We’re on track, and this is what we can expect on a on a forward looking basis. Sorry. Is that And, again, are you speaking to the pilot?

Sorry. Go ahead. Sorry. Are you saying that as we enter 2026, you’ll be able to give us an idea of how how significant or how material the incremental savings can be, or you think that by the time we enter 2026, you’ll be at that run rate and you can you can point to it? The prior.

I mean, there’ll be both, but I I think the prior will be will be a lot smarter. We’re running a number of pilots. We have 70 stores, for example, right now under a certain pilot and as well as another other a number of other tests that that are we’re doing and we’re seeing and experiencing some some benefit. But I’d say by, yes, 2026, we’ll be able to give a lot more. Latter end of twenty twenty six.

We’ll be able to give more definitive outlook as far as how this program has matured. So do we do you expect to see like, you saw some benefits in this quarter from next 100. Do you see that ramping up steadily through the year and then also at some point as you go through 2026 till you get to your your peak run rate? Yes. Yes.

Okay. Alright. Thank you.

Conference Operator: Thank you. Once again, please press star one at this time for any questions or comments. And we have no further questions registered at this time. I would now like to turn the meeting back over to Mr. McConnell.

Dan McConnell, President and Chief Executive Officer, Northwest Company Inc.: Okay. Yes. Before I close-up, actually, I just wanted to remind the shareholders of our virtual annual general meeting, and that’s gonna be later this morning. So love to love for you to attend that. You’ll have you’ll get to see a little bit more real time or real exposure to some of the impacts of the next 100 on the employees.

Other than that, appreciate your attending today, and hope you have a great summer, and we’ll speak to you again in September. Thank you very much, operator.

Conference Operator: Thank you. The conference has now ended. Please disconnect your lines at this time, and we thank you for your participation. This conference is no longer

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