Operator: Good morning, everyone. Welcome to Reitmans Canada Limited Fiscal 27 Second Quarter Earnings Call. After management's remarks, this call will include a question-and-answer session. Should you need assistance during the conference call, you may signal an operator by pressing *0. Before turning the call over to management, listeners are reminded that today's call may contain forward-looking statements within the meaning of applicable securities laws. Forward looking statements involve risks and uncertainties and undue reliance should not be placed on such statements. Certain material factors or assumptions are applied in making forward-looking statements. And actual results may differ materially from those expressed or implied in such statements. For additional information, please refer to the disclaimers in the forward-looking statements of the company's press release and MD and A for the quarter. Reitmans Canada Limited does not undertake to update any forward-looking statements. But statements, which speak only as of the date made. I would now like to turn the meeting over to Andrea Limbardi, President and CEO of Reitmans Canada Limited. Please go ahead, Ms. Limbardi.
Andrea Limbardi: Thank you. Good morning, everyone. Joining me on the call today is Caroline Goulian, RCL's Chief Financial Officer. Yesterday afternoon, we reported our financial results for the second quarter ended August 1, 2026. Our news release, financial statements and MD&A are available on our website and have been filed on SEDAR+. A slide presentation for today's call is available on the Events and Presentations page of our website under the Financial and News heading. We will get started on slide 4. RCL operates 3 distinct brands, each with a clear and differentiated value proposition. At the end of the second quarter, our footprint included 216 Reitmans stores, 84 RW&Co locations and 85 Penningtons stores. Our national network of stores together with our ecommerce platform allows us to serve Canadians from coast to coast. Our sales performance in the second quarter varied by channel. Our net revenues and comparable sales, which include e-commerce, were down year over year. However, our retail store network remained resilient. Sales from comparable stores were up slightly. We saw continued strong momentum from our recently renovated flagship locations. Meanwhile, e-commerce revenues were lower year over year, reflecting intentional reduction in clearance and promotional activity. The big story for us this quarter was our purposeful focus on gross margin expansion. Through stronger regular price selling, a more disciplined approach to promotions, and tighter inventory management, we delivered a meaningful 160-basis point improvement in gross margin. On the expense side, we saw increases in occupancy costs freight due to fuel surcharges related to the geopolitical circumstances, and made investments in advertising and the development of a loyalty program. While higher operating expenses tempered our margin gains, we are encouraged by the resilience of our store network the strength of our brands, and the advancement of our long term strategic priorities. Looking at the key highlights for each of our brands in the quarter, at Reitmans, we celebrated a significant milestone. Our 100th anniversary. The brand's we have evolved campaign generated more than 365 million impressions and delivered its highest ad recall on record. The campaign also resonated strongly with consumers with 80% of respondents associating it with a more modern Reitmans and 77% with a younger brand image. Collaborations and partnerships with supermodel, CocoRochia, Québécois actress Catherine Saint Laurent, the Toronto Tempo, and the McCord Stewart Museum reinforced our fashion credibility and cultural relevance. Collectively, these initiatives created a significant PR moment for the brand, broadening its appeal and supporting future growth. Meanwhile, our new concept flagship store at Carrefour Laval just outside of Montreal performed very well, posting double digit sales gains compared to Q2 of last year. The renovated space offers an immersive and elevated retail experience where thoughtful design and the customer journey converge to transform how customers interact with the brand. RW&CO. performed well in the quarter with a more disciplined approach to pricing, assortment, and product strategy. Improved pricing integrity and lower markdown penetration drove stronger margins. The brand's performance in the quarter gives us confidence that the brand and product strategies are resonating with customers and building a stronger foundation for long term growth. Early in the quarter, RW&Co completed the transformation of its Toronto Eaton Centre store to their new concept introduced last fall in Saint Bruno. The 7 thousand square foot flagship store immediately saw a strong increase in sales, achieving double digit sales growth for the quarter. At Penningtons, we continue to build momentum. With stronger performance as the quarter progressed. We saw improved customer responses to key product and experience initiatives and continued traction across stores, digital, PR, and social media. In particular, our new Activelle by Addition Elle dress collection has been met with great customer enthusiasm and full price sell through. The elevated occasion focused capsule is designed for customers seeking more refined, fashion forward pieces for special events, work occasions, celebrations, and standout moments, while maintaining the fit expertise and size inclusivity that we are known for at Penningtons. During our last quarter, I briefly touched on the challenging economic and geopolitical environment including higher fuel costs, as I mentioned earlier. We expect those challenges to continue for the near term. While we are proudly Canadian, we source from around the world, and we have seen the impacts of higher oil prices and fuel costs on the freight side. Due to the volatility we have seen in recent months, it remains difficult to predict the impact higher fuel costs will have on our business going forward or how long these costs will be elevated. Regardless, we remain focused on advancing our strategy, building a stronger, more resilient business, and importantly, being a destination Canadians rely on for finding the best quality fashion at the best value. I will now turn things over to Caroline to discuss our financial results in more detail. Caroline?
Caroline Goulian: Thank you, Andrea, and good morning, everyone. Please note that all comparisons I will be discussing are for the second quarter ended August 1, 2026 against results for the second quarter a year ago, which ended August 2, 2025. As usual, all dollar amounts discussed are in Canadian currency. On slide 13, you can see that our net revenues for the quarter were down 1.9% to $211.8 million. Comparable sales, include ecommerce net revenues, decreased 1.5%. The decreases were attributable to lower transaction volume as well as reduced clearance activity compared to the same time last year. As Andrea said, the highlights of the quarter was how our deliberate actions on pricing and more selective and targeted promotions translated to increases in gross profit and gross margin. Gross profit increased $1.1 million to $123.9 million while gross margin improved 160-basis points to 58.5% of net revenues. Adjusted EBITDA was $18.8 million down from $21.4 million in Q2 of last year. The $2.6 million decrease was driven by a $4.5 million increase in SG&A expenses which more than offset our gross profit gains. Contributing to the higher SG&A expenses for the quarter, we had a $1.6 million increase in store related rent occupancy, and other costs. A $2.1 million increase in advertising expenses and freight with advertising being largely tied to our campaign and activities related to Reitmans' 100th anniversary. And a $1.2 million increase in project spending primarily related to preliminary work on the development of a loyalty program and continuing to improve our digital platform. Partly offsetting these increases, we have a $400 thousand decrease in wages primarily due to the workforce reduction stemming from our strategic transformation. We had net earnings of $10.1 million or $0.20 per share compared with net earnings of $13.1 million or $0.26 per share in the prior year period. We had strategic transformation expenses of $1.1 million in the quarter, related to employee termination benefits and consulting fees associated with restructuring efforts to evolve our operating structure. We did not have strategic transformation expenses in the same quarter a year ago,. I would add that our profitability for the year to date is ahead of last year. With adjusted EBITDA being up $2.7 million or 25% while our net earnings increased $700 thousand or 22.6% compared to the same time a year ago. Turning to the balance sheet. We closed the quarter with $149.2 million in working capital, supported by a strong cash position of $152.7 million Inventory at quarter end totaled $119.7 million which was down 5.2% year over year, reflecting our disciplined approach to inventory management. We continue to carry no long term debt other than lease liabilities and with no amounts drawn on our bank credit facilities. Finally, under our normal course issuer bid for the year to date ended August 1, 2026, We purchased 295 thousand Class a nonvoting shares returning $600 thousand to shareholders. On July 30, we announced the renewal of our NCIB. Under the renewal, the company may acquire up to 3 million Class a nonvoting shares over the 12-month period spanning August 5, 2026 to August 4, 2027 representing less than 10% of the public float of the class a shares. That concludes my financial review. We would now like to open the call to questions. Operator?
Operator: Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. You will hear prompt that your hand has been raised. Should you wish to decline from the polling process, please press *2. If you are using a speakerphone, please lift the handset before pressing any keys. 1 moment, please. There are no questions at this time. I will now turn the call over to Andrea Limbardi for closing remarks.
Andrea Limbardi: Thank you for joining us this morning. We look forward to speaking with you in our next quarter in December.
Operator: This concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.
