NWC: Q1/26 Results Slightly Below Forecast; Focus Remains on FNCFS Settlement Ramp

Research evidence excerpt

NWC: Q1/26 Results Slightly Below Forecast; Focus Remains on FNCFS Settlement Ramp

en by lower FNCFS/ICFI program funding and lower drinking water payments, partially offset by

incremental FNCFS settlement-driven demand; and (ii) International SSS of +4.3% (+4.0% growth in food sales and +8.7% growth

in general merchandise sales) versus our estimate of +3.1% and consensus of +2.7% driven by improved tourism across the

Caribbean and market share gains in Alaska.

• 2026 outlook commentary largely unchanged. While acknowledging macro uncertainty including the impact of higher oil

prices and inflation, 2026 outlook commentary was largely unchanged with management indicating that: (i) FNCFS settlement

payments are expected to increase in 2026 as claims are adjudicated; (ii) Next 100 initiatives will help offset inflationary

pressures; and (iii) the CHRT has approved long-term FNCFS reform in Ontario (flagged in our preview), which is expected to

benefit NWC's communities directly through programs and indirectly through investments in infrastructure and employment.

• Issues in focus for the 9:30am ET conference call tomorrow: (i) more granularity on the SSS performance in the quarter and the

extent to which in-market settlement-driven spending continues to ramp sequentially; (ii) an update on the company's ability

and approach to pass through incremental fuel/freight costs; and (iii) progress on Next 100 initiatives and associated cost savings.

All values in CAD unless otherwise noted. Priced as of prior trading day's market close, EST (unless otherwise noted).

Disseminated: Jun 9, 2026 19:33EDT; Produced: Jun 9, 2026 19:33EDT

For Required Non-U.S. Analyst and Conflicts Disclosures, see page 3