For its first quarter ended July 18, 2021, Alimentation Couche-Tard Inc. announced net earnings of $764.4 million, representing $0.71 per share on a diluted basis. The results for the first quarter of fiscal 2022 were affected by a pre-tax net foreign exchange gain of $8.6 million, as well as pre-tax acquisition costs of $0.8 million.
The results for the comparable quarter of fiscal 2021 were affected by a pre-tax net foreign exchange loss of $18.4 million, as well as pre-tax acquisition costs of $3.9 million. Excluding these items, the adjusted net earnings were approximately $758.0 million for the first quarter of fiscal 2022, compared with $795.0 million for the first quarter of fiscal 2021, a decrease of $37.0 million, or 4.7%, driven by lower road transportation fuel margins in the U.S. and higher operating expenses, partly offset by higher fuel demand and the net positive impact from the translation of its Canadian and European operations into U.S. dollars.
The adjusted diluted net earnings per share stood at $0.71, stable compared with the corresponding quarter of fiscal 2021. All financial information presented is in US dollars unless stated otherwise.
“I am pleased to report that across our global network, we had solid first quarter results, both in convenience and fuel, even when compared to a very strong quarter last year,” said Alimentation Couche-Tard President and CEO Brian Hannasch. “Same-store sales were especially good in Europe, and across all our regions, we have seen positive growth in food as the ease and the quality of our offer are clearly resonating with our customers.”
While remaining impacted by COVID-19 traffic patterns, fuel volumes improved and Couche-Tard continued to achieve healthy margins as well as expanded global fuel business in terms of procurement capabilities, pricing analytics and the Circle K fuel rebranding efforts
As the pandemic continues to present operational and supply chain challenges to the business, Hannasch said he remains incredibly proud and grateful for the care and commitment to the business shown by the company’s team members, customers and partners
“This quarter, we made notable developments in our ambition to grow the network,” said Hannasch. “On the acquisition front, we entered into a definitive agreement to purchase Wilsons Gas Stops and Go! Stores that has a network of 226 company-operated and dealer locations and a fuel terminal in Atlantic Canada.
“We also are moving forward with a binding agreement to acquire 35 sites in the U.S., predominately in Oregon and Washington, currently operated under the Porter’s brand. In both cases, we look forward to welcoming strong sites with experienced team members into the Couche-Tard family. On the organic front, we added 30 new store builds or razed and rebuilds to our portfolio, which support our growth platforms and brand promise.”
Additionally, Couche-Tard expanded its “Fresh Food, Fast” program globally, adding nearly 500 stores, bringing the total count to over 2,000 stores. Growing the size and scale of the network is essential, he said, to the company’s strategic goals and it remains disciplined in creating value for shareholders.
First Quarter Highlights
- Net earnings were $764.4 million, or $0.71 per diluted share for the first quarter of fiscal 2022 compared with $777.1 million, or $0.70 per diluted share for the first quarter of fiscal 2021. Adjusted net earnings were approximately $758.0 million compared with $795.0 million for the first quarter of fiscal 2021. Adjusted diluted net earnings per share were $0.71, unchanged compared with the corresponding quarter of last year.
- As compared against a quarter fully impacted by the COVID-19 pandemic, results varied by region as the pandemic and social restrictive measures were at different levels year-over-year. Merchandise categories most impacted by COVID-19, such as food, continue to show a positive trend and, on a two-year basis, convenience activities performed well in the company’s global network. Fuel margins continue to be higher than pre-pandemic levels, while fuel volumes continue to be challenged by work from home trends and changes in local restrictions.
- Total merchandise and service revenues of $4.1 billion, an increase of 5.4%. Same-store merchandise revenues decreased 0.2% in the U.S. and 9.6% in Canada, and increased 5.9% in Europe and other regions. On a two-year basis, same-store merchandise revenues increased at a compound annual growth rate of 3.7% in the United States, 4.9% in Europe, and 4.2% in Canada.
- Merchandise and service gross margin decreased 0.1% in the United States to 34.2%, and 2.2% in Europe and other regions to 38.4%, which was impacted by the integration of Circle K Hong Kong. Gross margin in Canada increased 1.2% to 32.3%, due to favorable changes in product mix.
- Same-store road transportation fuel volume increased 11.8% in the U.S., 6.3% in Europe and other regions, and 10.4% in Canada, due to higher fuel demand compared to the corresponding quarter. On a two-year basis, same-store road transportation fuel volume decreased at a compound annual growth rate of 6.1% in the U.S., 3.3% in Europe, and 9.4% in Canada, still impacted by work from home trends.
- Successful issuance of $1.0 billion of U.S.-dollar-denominated senior unsecured notes, including an inaugural tranche of Green Bonds totaling $350.0 million.
- The corporation implemented a share repurchase program which allows it to repurchase up to 4.0% of the public float of its Class B subordinate voting shares. Under this program, shares for an amount of $299.2 million were repurchased.
More details of Alimentation Couche-Tard’s financials is availablie online at https://corpo.couche-tard.com.