Net earnings attributable to shareholders of the Corporation were $790.8 million, or $0.83 per diluted share for the first quarter of fiscal 2025 compared with $834.1 million, or $0.85 per diluted share for the first quarter of fiscal 2024. Adjusted net earnings attributable to shareholders of the Corporation1 were approximately $790.0 million compared with $838.0 million for the first quarter of fiscal 2024. Adjusted diluted net earnings per share1 were $0.83, representing a decrease of 3.5% from $0.86 for the corresponding quarter of last year.
Total merchandise and service revenues of $4.5 billion, an increase of 5.1%. Same-store merchandise revenues2 decreased by 1.1% in the United States, by 2.1% in Europe and other regions1, and by 3.9% in Canada, all impacted by constraints on discretionary spending due to challenging economic conditions for low income consumers.
Merchandise and service gross margin1 decreased by 0.6% in the United States to 33.7%, to support our summer campaigns, by 0.1% in Europe and other regions to 39.8%, and increased by 0.9% in Canada to 34.8%.
Same-store road transportation fuel volumes decreased by 0.8% in the United States, by 1.4% in Europe and other regions, and by 2.1% in Canada. Global fuel demand remained unfavorably impacted by challenging economic conditions.
Road transportation fuel gross margin1 of 48.13¢ per gallon in the United States, a decrease of 1.92¢ per gallon, US 8.68¢ per liter in Europe and other regions, an increase of US 0.47¢ per liter, and CA 13.11¢ per liter in Canada, a decrease of CA 0.14¢ per liter. Notwithstanding the modest decline from the comparable quarter in some regions, fuel gross margins1 remained healthy throughout the network.
Subsequent to the end of the quarter, the Corporation entered into a binding agreement to acquire approximately 270 company-owned and operated convenience retail and fuel sites in the United States.
___________
1
Please refer to the "Non-IFRS Accounting Standards Measures" section for additional information on performance measures not defined by IFRS® Accounting Standards.
2
This measure represents the growth of (decrease in) cumulative merchandise revenues between the current period and comparative period for those stores that were open for at least 23 days out of every 28-day period included in the reported periods. Merchandise revenues are defined as Merchandise and service revenues excluding service revenues.
LAVAL, QC, Sept. 4, 2024 /PRNewswire/ - For its first quarter ended July 21, 2024, Alimentation Couche-Tard Inc. ("Couche-Tard" or the "Corporation") (TSX: ATD) announces net earnings attributable to shareholders of the Corporation of $790.8 million, representing $0.83 per share on a diluted basis, compared with $834.1 million for the corresponding quarter of fiscal 2024, representing $0.85 per share on a diluted basis. The results for the first quarter of fiscal 2025 were affected by a pre-tax net foreign exchange gain of $2.2 million and by pre-tax acquisition costs of $1.1 million. The results for the comparable quarter of fiscal 2024 were affected by pre-tax acquisition costs of $3.5 million, as well as by a pre-tax net foreign exchange loss of $0.3 million. Excluding these items, the adjusted net earnings attributable to shareholders of the Corporation1 were approximately $790.0 million, or $0.83 per share on a diluted basis for the first quarter of fiscal 2025, compared with $838.0 million, or $0.86 per share on a diluted basis for the corresponding quarter of fiscal 2024, a decrease of 3.5% in the adjusted diluted net earnings per share1. This decrease is primarily driven by softness in traffic and fuel demand as low income consumers remain impacted by challenging economic conditions, as well as by lower road transportation fuel gross margin1 in the United States, partly offset by the favorable impact of the share repurchase program. All financial information presented is in US dollars unless stated otherwise.
"As weakness in consumer behavior persists, we are keeping our focus on our long-term strategy and bringing everyday value to our customers. The number one reason customers visit our locations is to quench their thirsts, and our summer beverage campaigns have been providing exceptional value and exciting exclusive flavors. We are also bringing personalized offers and savings to our most valuable customers through our growing loyalty membership programs. On the fuel side, while volumes have been impacted by customers watching their spend, we continued to have healthy margins. Overall, we remain confident in the advantages of our globally diversified business to successfully navigate these near-term headwinds," said Brian Hannasch, President and Chief Executive Officer of Alimentation Couche-Tard.
"The fragmented market in the United States offers significant consolidation opportunities, and the challenging economic landscape is accelerating this trend, creating exciting growth prospects for us. We just announced a definitive agreement to acquire GetGo Café + Market ("GetGo") from supermarket retailer Giant Eagle Inc. GetGo is an innovative, food-first convenience store experience that operates approximately 270 convenience retail and fueling locations across Indiana, Maryland, Ohio, Pennsylvania, and West Virginia. We are looking forward to bringing GetGo team members into the family and learning more about its popular made-to-order food and loyalty programs. With our strong balance sheet and customary financial discipline, we are optimistic about future deals at the right price and fit," concluded Brian Hannasch.
Filipe Da Silva, Chief Financial Officer, added: "We're pleased with the progress of our integration of the European retail assets from TotalEnergies SE, supported by successful technical pilots across four countries. We see significant potential to grow merchandise sales, particularly in food and beverages, where our established programs can be effectively introduced. This integration builds on our Statoil Fuel & Retail experience, and with stronger capabilities and resources, we expect to accelerate execution. We've identified $187.0 million in synergies over the next five years, driven by improved merchandise sales, operational efficiencies, and optimized labor management. Additionally, we're making great progress in our Fit To Serve initiative by using data-driven insights to enhance our procurement strategies in the United States. In the coming months, we'll extend this approach to our operations in Canada and Europe."
Significant Items of the First Quarter of Fiscal 2025
On July 2, 2024, we entered into a binding agreement to acquire nine company-owned and operated convenience retail and fuel sites operating under the Texaco brand and located in Ireland. The transaction, which would be financed using our available cash, is expected to close before the end of calendar year 2024 and is subject to customary closing conditions and regulatory approvals.
Subsequent to the end of the first quarter of fiscal 2025, we entered into a binding agreement to acquire approximately 270 company-owned and operated convenience retail and fuel sites operating under the GetGo Café + Market brand from supermarket retailer Giant Eagle Inc., for a purchase price of approximately $1.6 billion, subject to post-closing adjustments. GetGo sites are located in the states of Indiana, Maryland, Ohio, Pennsylvania and West Virginia, in the United States. The transaction, which would be financed using our available cash and/or existing credit facilities, including our United States Commercial Paper Program, is expected to close in calendar year 2025 and is subject to customary closing conditions and regulatory approvals.
On April 26, 2024, the Toronto Stock Exchange approved the renewal of our share repurchase program, which took effect on May 1, 2024. The renewed share repurchase program allows us to repurchase up to 78.1 million shares, representing 10.0% of the shares outstanding as at April 18, 2024, and the share repurchase period will end no later than April 30, 2025. During the first quarter of fiscal 2025, no shares were repurchased under the renewed share repurchase program. Subsequent to the end of the first quarter of fiscal 2025 and under the share repurchase program, we repurchased 8.7 million shares through a private agreement, for an amount of $508.7 million.
Subsequent to the end of the first quarter of fiscal 2025, we fully repaid our CA $700.0 million Canadian-dollar-denominated senior unsecured notes issued on July 26, 2017. In addition, on the same date, we settled the cross-currency interest rate swaps associated with the notes, which had an unfavorable fair value of $51.7 million at settlement.
Other Changes in our Network during the First Quarter of Fiscal 2025
We acquired one company-operated store and settled this transaction using our available cash.
We completed the construction of 14 stores and the relocation or reconstruction of 2 stores, reaching a total of 16 stores since the beginning of fiscal 2025. As of July 21, 2024, another 61 stores were under construction and should open in the upcoming quarters.
Summary of changes in our store network
The following table presents certain information regarding changes in our store network over the 12-week period ended July 21, 2024(1):
12-week period ended July 21, 2024
Type of site
Company-operated
CODO
DODO
Franchised and
other affiliated
Total
Number of sites, beginning of period
10,445
1,409
1,464
1,227
14,545
Acquisitions
1
—
—
—
1
Openings / constructions / additions
17
—
3
13
33
Closures / disposals / withdrawals
(35)
—
(3)
(31)
(69)
Store conversions
—
1
(1)
—
—
Number of sites, end of period
10,428
1,410
1,463
1,209
14,510
Circle K branded sites under licensing agreements
2,293
Total network
16,803
Number of automated fuel stations included in the period-end
figures
1,170
—
92
—
1,262
(1)
Stores which are part of Circle K Belgium SA's network are included at 100%, while stores operated through our RDK joint venture are included at 50%.
Exchange Rate Data
We use the US dollar as our reporting currency, which provides more relevant information given the predominance of our operations in the United States.
The following table sets forth information about exchange rates based upon closing rates expressed as US dollars per comparative currency unit:
12-week periods ended
July 21, 2024
July 23, 2023
Average for the period(1)
Canadian dollar
0.7310
0.7484
Norwegian krone
0.0935
0.0936
Swedish krone
0.0942
0.0943
Danish krone
0.1448
0.1464
Zloty
0.2514
0.2431
Euro
1.0799
1.0903
Hong Kong dollar
0.1280
0.1277
(1)
Calculated by taking the average of the closing exchange rates of each day in the applicable period.
For the analysis of consolidated results, the impact of the translation of our foreign currency operations into US dollars is defined as the impact from the translation of our Canadian, European, Asian, and corporate operations into US dollars. Variances of our foreign currency operations into US dollars are determined as being the difference between the corresponding period results in local currencies translated at the current period average exchange rate and the corresponding period results in local currencies translated at the corresponding period average exchange rate.
Summary Analysis of Consolidated Results for the First Quarter of Fiscal 2025
The following table highlights certain information regarding our operations for the 12-week periods ended July 21, 2024, and July 23, 2023, and the results analysis in this section should be read in conjunction with this table. The results from our operations in Europe and Asia are presented together as Europe and other regions.
12-week periods ended
(in millions of US dollars, unless otherwise stated)
July 21, 2024
July 23, 2023
Variation %
Statement of Operations Data:
Merchandise and service revenues(1):
United States
3,022.2
3,005.3
0.6
Europe and other regions
867.2
622.0
39.4
Canada
603.7
648.5
(6.9)
Total merchandise and service revenues
4,493.1
4,275.8
5.1
Road transportation fuel revenues:
United States
7,459.7
7,522.2
(0.8)
Europe and other regions
4,758.2
2,263.7
110.2
Canada
1,438.7
1,449.3
(0.7)
Total road transportation fuel revenues
13,656.6
11,235.2
21.6
Other revenues(2):
United States
11.4
8.2
39.0
Europe and other regions
108.6
95.1
14.2
Canada
7.8
8.9
(12.4)
Total other revenues
127.8
112.2
13.9
Total revenues
18,277.5
15,623.2
17.0
Merchandise and service gross profit(1)(3):
United States
1,019.1
1,030.0
(1.1)
Europe and other regions
345.0
248.2
39.0
Canada
210.0
219.7
(4.4)
Total merchandise and service gross profit
1,574.1
1,497.9
5.1
Road transportation fuel gross profit(3):
United States
1,048.3
1,074.6
(2.4)
Europe and other regions
372.8
197.6
88.7
Canada
128.7
137.1
(6.1)
Total road transportation fuel gross profit
1,549.8
1,409.3
10.0
Other revenues gross profit(2)(3):
United States
8.7
8.2
6.1
Europe and other regions
33.2
16.3
103.7
Canada
7.3
6.7
9.0
Total other revenues gross profit
49.2
31.2
57.7
Total gross profit(3)
3,173.1
2,938.4
8.0
Operating, selling, general and administrative expenses
1,632.5
1,439.1
13.4
Gain on disposal of property and equipment and other assets
(38.3)
(3.5)
994.3
Depreciation, amortization and impairment
440.9
360.5
22.3
Operating income
1,138.0
1,142.3
(0.4)
Net financial expenses
115.1
70.7
62.8
Net earnings
793.1
834.1
(4.9)
Net earnings attributable to non-controlling interests
(2.3)
—
(100.0)
Net earnings attributable to shareholders of the Corporation
790.8
834.1
(5.2)
Per Share Data:
Basic net earnings per share (dollars per share)
0.83
0.85
(2.4)
Diluted net earnings per share (dollars per share)
0.83
0.85
(2.4)
Adjusted diluted net earnings per share (dollars per share)(3)
0.83
0.86
(3.5)
12-week periods ended
(in millions of US dollars, unless otherwise stated)
July 21, 2024
July 23, 2023
Variation %
Other Operating Data:
Merchandise and service gross margin(1)(3):
Consolidated
35.0 %
35.0 %
—
United States
33.7 %
34.3 %
(0.6)
Europe and other regions
39.8 %
39.9 %
