Alimentation Couche-Tard Reports Q2 Profits
LAVAL – The company behind the convenience stores at Irving service stations across Atlantic Canada is reporting a healthy bump in profits and revenues.
In recently released second-quarter financial results for fiscal 2023, Alimentation Couche-Tard reported an almost CAD $3.9-billion gross profit – up 10.5 percent from Q2 2022.
That increase was driven by higher prices at the pumps, bigger gross margins from merchandise and services, and convenience store activity growth – as well as the windfall of a new share repurchase program.
The company repurchased 4,796,500 shares and 15,736,900 shares for $273 million and $910 million, respectively, in the second quarter.
In a November 24 news release, Alimentation Couche-Tard also reported just over $1 billion in net earnings for the second quarter of fiscal 2023 – up from $927 million in net earnings from the same quarter of last year.
Total revenues of $22.5 billion and total merchandise and service revenues of $5.5 billion – increases of $3.6 billion and $124 million, respectively – were reported.
The release said the overall revenue bump was on account of higher than average fuel and fuel product prices, and gains from acquisitions and growth of convenience store-related activities, and in spite of lowered demand for fuel.
Same-store merchandise revenues increased in the United States and Europe, while total merchandise and service revenues decreased by 1.5 percent from the same quarter, last year, in Canada.
This was partly due to the company’s translation of foreign currency operations into US dollars and its second-quarter store acquisitions.
Information released by Alimentation Couche-Tard blamed Canada’s same-store merchandise revenue drop and increase in competition from the illegal cigarette market, since Q2 2022.
The company saw a 27.3 percent increase of its quarterly dividend in the second quarter, bringing it to 14-cents-per-share.
Alimentation Couche-Tard reported a gross road transportation fuel profit of $1.9 billion, up $319 million from Q2 2022.
Total road transportation fuel revenue, at just $16.7 billion, decreased by 6.5 percent in Canada, also decreasing 1.9 percent in the United States and 6.3 percent in Europe.
This loss was driven by higher prices gas prices depressing demand, and the impact of translating foreign currency operations in US dollars.
“Fuel margins remained healthy throughout the network due to favourable conditions and the continued work on the optimization of the supply chain,” stated information in the release.
The company suffered an impairment loss of US $23.9 million in the second quarter, on account of a decreasing in market capitalization of Fire & Flower Holdings Corp, in which it owns a stake.
Couche-Tard also acquired 218 Atlantic Canadian gas stations part of the Wilsons network that includes a Halifax-based fuel terminal for $277.9 million.
In 2018, the chain signed a deal with Irving Oil Ltd. to lease space and operate convenience stores at 252 Irving-owned gas stations in Atlantic Canada and New England.
Alimentation Couche-Tard, owner of the Circle K brand of convenience stores, is North America’s second-largest convenience store chain.
Headquartered in Laval, Quebec, the chain operates more than 14,300 stores in 24 countries and territories.