Couche-Tard Boosts Store Construction, Remodeling Goals for 2015
Record earnings reported as retailer sells its aviation-fuel business to BP
LAVAL, Quebec -- Alimentation Couche-Tard will sell the aviation-fuel business it inherited in its acquisition of Norwegian oil giant Statoil ASA’s retail operations in 2012, giving the convenience-store chain a healthy bank roll to pay off debt and to grow. And growth is top of mind as the company plans to accelerate its pace of new-store construction and remodeling of older locations this fiscal year to improve its retail network.
The Quebec-based convenience-store company said Wednesday it will continue to pursue acquisitions, but expects to construct or rebuild 80 to 100 stores, a significant increase over last year.
“For the remainder of fiscal 2015, we expect to pursue our investments with caution in order to, amongst other things, improve our network and build additional stores,” the company said in its earnings report.
The increased store growth and the sale of the aviation-fuel unit for an undisclosed sum to Air BP were highlights of Couche-Tard’s 2015-fiscal-year first-quarter report, during which it reported record net earnings of $269.5 million, up 5.7% over the first quarter of fiscal year 2014.
"We are extremely pleased with the results of the first quarter," said Alain Bouchard, president and CEO. "Although higher fuel margins have certainly contributed to our excellent results, driven by both improved supply contract terms and favorable market conditions during the quarter, what stands out above all is the continued strong performance of our teams which enabled us to post strong organic growth on all fronts."
Same-store merchandise revenues increased by 2.8% in the United States and by 3.3% in Canada.
“The performance in North America is attributable to our dynamic merchandising strategies, our competitive offer, as well as our expanded fresh-food offer, which attracted an increased number of customers in our stores,” the company stated. “Our performance in the United States is even more impressive considering we were once again able to grow store traffic while increasing our gross margin.”
Couche-Tard is the leader in the Canadian convenience-store industry. In the United States, it is the largest independent convenience-store operator in terms of number of company-operated stores, most under the Circle K c-store brand.
As of July 20, 2014, Couche-Tard's network comprised 6,243 convenience stores throughout North America, including 4,478 stores with road transportation fuel dispensing. Its North-American network consists of 13 business units, including nine in the United States covering 40 states and four in Canada covering all 10 provinces.