Source: Company reports

3Q16 RESULTS

Alimentation Couche-Tard’s fiscal 3Q16 revenues were $9.3 billion, up 2.5% from $9.1 billion in the year-ago period. The company noted positive contributions from acquisitions of The Pantry and the opening of new stores. In the quarter, the company acquired 26 stores and completed the construction and relocation of 32 stores. The company also highlighted its fuel-rebranding project covering more than 1,000 stores in the Southeastern US. This project is expected to realize synergies from higher fuel volumes and better pricing, which will require an expense of $9.2 million for the early termination of existing fuel supply contracts. Positives in the quarter were partially offset by a lower road transportation fuel margin, higher expense to support organic growth and a negative currency impact. Comps increased by 0.5% in the US, by 3.4% in Europe and by 0.2% in Canada. The company attributed this growth to its dynamic merchandising strategies and competitive offers. In the quarter, the company implemented new bakery promotions in 306 stores and expanded its fresh food assortment to an additional 180 sites in the US. Adjusted EPS was $0.53, missing the consensus of $0.59 but representing a 3.9% increase from $0.51 in the year-ago quarter.

BUSINESS UPDATE

In the quarter, Alimentation Couche-Tard implemented a new global retail brand, Circle K. The company has rebranded approximately 135 locations in the US so far and has introduced the first two test sites in Europe. In February 2016, the company closed the acquisition of the Topaz chain in Ireland, which added 444 stores and gas stations to its operations. The company also expects a ruling from the European competition authorities to enable it to acquire Shell’s Danish retail business. Recently, the company signed an agreement with Imperial Oil to acquire its Esso-branded convenience and fuel sites in Ontario and Québec, comprising 279 stations, 13 land banks and two dealer sites.