LAVAL, Quebec -- Driven by merchandising strategies, fuel volumes and foodservice growth, Alimentation Couche‑Tard Inc. has reported net earnings of $324.4 million for its first fiscal quarter ended July 17, 2016, an 8.9% increase compared to net earnings of $297.8 million for the same quarter in the previous fiscal year.
“Our performance in the quarter was both steady and gratifying,” said Brian Hannasch, president and CEO. “Same-store merchandise revenues were solid in the U.S. and Canada and strong in Europe, all fueled by the growing popularity of our expanded foodservice offering, our effective merchandising strategies as well as growing contributions from our acquisitions.”
Revenues were $8.4 billion for first-quarter fiscal 2017, down by $559 million, a decrease of 6.2% compared with the $8.9 billion from the same period in fiscal 2016. Couche-Tard attributed the decline mainly to the lower average selling price of motor fuel, among other factors.
These items, which contributed to the decrease in revenues, were partly offset by the contribution from acquisitions and recently opened stores as well as by the continued growth in same-store merchandise revenues and motor fuel volumes in North America and Europe.
The growth in merchandise and service revenues for the quarter was $95.4 million, a 3.9% increase from $2.44 billion in first-quarter fiscal 2016 to $2.53 billion in first-quarter fiscal 2017. This increase is attributable to the contribution from acquisitions, which amounted to approximately $65 million, as well as “solid” organic growth, Hannasch said.
Same-store merchandise revenues increased by 2.4% in the United States, by 4.9% in Europe and by 0.9% in Canada.
Hannasch attributed the performance to the company’s “dynamic merchandising strategies, to the encouraging reaction from customers to the launch of our new global brand, to our competitive offer and to our expanded fresh-food assortment, which are attracting more customers into our stores.”
Motor fuel revenues decreased by $713.1 million in the quarter, an 11.2% decrease from $6.37 billion in first-quarter fiscal 2016 to $5.66 billion in first-quarter fiscal 2017.
Same-store motor fuel volumes increased by 2.5% in the United States, by 0.6% in Canada and by 0.9% in Europe due to positive customer response to the company’s Circle K rebranding activities, to its branding and micromarket strategies and the growing contribution from premium fuel, the company said.
A total of 247 stores in Europe and 477 stores in North America are now displaying the new global convenience brand Circle K.
“This quarter was also really the first time we introduced our global Circle K brand to our customers in Europe,” said Hannasch. “With already close to 250 stores rebranded from the well-established Statoil brand to our new global Circle K brand, we’re starting to see very positive feedback from our customers.”
This quarter, the company brought the A/S Dansk Shell’s sites in Denmark into its portfolio, Hannasch said, and it will soon integrate the Imperial Oil sites in Canada.
And after the close of the quarter, Couche-Tard announced that it would acquire San Antonio-based CST Brands Inc. for approximately $4.4 billion, pending regulatory and shareholder approval.
Laval, Quebec-based Couche-Tard’s network includes 7,888 convenience stores in North America under the Circle K and other brands. The network consists of 15 business units, including 11 in the United States covering 41 states and four in Canada covering all 10 provinces. In Europe, Couche-Tard operates a retail network across Scandinavia (Norway, Sweden, Denmark), Ireland, Poland, the Baltics States (Estonia, Latvia, Lithuania) and Russia through 10 business units.
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