Alimentation Couche-Tard Inc. had a positive third quarter ending Feb. 2. The news from the earnings call comes amid speculation about potential non-disclosure agreements (NDA) as a result of recent dealings with 7-Eleven parent company 7&i.
Alex Miller, CEO of Couche-Tard, said no NDA has been signed over potential stores that need to be sold by both Couche-Tard and 7&i to meet U.S. antitrust conditions for a deal, reported Reuters.
Earlier in the month, 7&i laid out a few potential paths forward for the companies, one of which was for them to work together to map out a divestiture process by defining operational, management and financial characteristics of the stores, as well as potential buyers.
And it seems as though both companies are working together to sound out buyers, noted Reuters.
Meanwhile, Couche-Tard is tracking its earnings and state of the business for Q3 of fiscal 2025.
“We are pleased to report positive improvements in the business this quarter. While consumers continue to be cautious in their spending, we are seeing encouraging signs of resilience. Same-store sales were positive in both Canada and Europe compared to the same quarter last year, and we had sequential improvement in the United States, impacted by historic winter storms in our southern business units. Food continued to grow in the United States as our meal deal promotions performed well and have been extended to Canada. In our fuel business, we are maintaining market share in the United States and margins aligned with recent quarters. As inflationary pressure persists, our No. 1 priority is winning our customers by being ready with the products and services they want at compelling value,” said Miller.
For its third quarter ended Feb. 2, Couche-Tard reported net earnings attributable to shareholders of the corporation of $641.4 million, representing 68 cents per share on a diluted basis, compared with $623.4 million for the corresponding quarter of fiscal 2024, representing 65 cents per share on a diluted basis. This increase is primarily driven by higher road transportation fuel gross margin, the contribution from acquisitions, the organic growth in the company’s convenience operations and the favorable impact of the share repurchase program, partly offset by the impact of strategic investments on operating expenses and depreciation.
“We delivered notable progress this quarter, delivering our most improved performance in over a year as we continue to navigate challenging consumer trends, particularly in the United States. Our results reflect a balanced mix of organic growth and acquisitions, demonstrating the strength of our globally diversified network, the success of our integration activities and our commitment to drive long-term sustainable growth. This quarter also marks the one-year anniversary of the acquisition of certain assets from TotalEnergies, which is on track for synergy realization and continues to deliver solid results thanks to the dedicated efforts of all of our team members,” said Filipe Da Silva, chief financial officer for Couche-Tard.
During Q3 of fiscal 2025, Couche-Tard acquired 38 company-operated stores, including 20 stores operating under the Hutch’s brand located in Oklahoma and Kansas, as well as 15 stores located in the Netherlands, reaching a total of 40 company-operated stores acquired through various transactions since the beginning of fiscal 2025.
The company also completed the construction of 31 stores and the relocation or reconstruction of eight stores, reaching a total of 69 stores since the beginning of fiscal 2025. As of Feb. 2, another 56 stores were under construction and should open in the upcoming quarters.
Overall, Couche-Tard’s gross profit was $3.8 billion for the third quarter of fiscal 2025, up by $322.7 million, or 9.4%, compared with the corresponding quarter of fiscal 2024, mainly attributable to the contribution from acquisitions, higher road transportation fuel gross margin, improved merchandise and service gross margins, partly offset by softness in fuel demand in the U.S.
For the first three quarters of fiscal 2025, its gross profit increased by $771.9 million, or 8.3%, compared with the first three quarters of fiscal 2024, mainly attributable to similar factors as those of the third quarter.
