For its first quarter ended July 23, 2023, Alimentation Couche-Tard announced net earnings of US$834.1 million, representing US$0.85 per share on a diluted basis, compared with $872.4 million for the corresponding quarter of fiscal 2023, representing US$0.85 per share on a diluted basis.
Adjusted net earnings were some US$838.0 million, or US$0.86 per share on a diluted basis for the first quarter of fiscal 2024, compared with US$875.0 million, or US $0.85 per share on a diluted basis for the corresponding quarter of fiscal 2023, an increase of 1.2% in the adjusted diluted net earnings per share.
According to Couche-Tard, this increase was driven by organic growth in the convenience activities fuel sales. Fuel margins remained healthy throughout the North American network, due to favorable market conditions and the continued work on the optimization of the supply chain.
“We are pleased to announce a good first quarter of our new fiscal year, with our Canadian operations leading the way with strong performances in both convenience and fuel,” Brian Hannasch, president and chief executive officer of Alimentation Couche-Tard, said in a release.
“Same store sales continued to grow in all Canadian business units with our packaged beverages category performing exceptionally well. Fuel volumes also grew significantly in this region. Across North America, we are seeing benefit from our promotional initiatives including reoccurring fuel days, which are contributing to volume growth. At the end of August, we had our first ever global Couche-Tard/Circle K Day with limited-time food and fuel discounts across our network from Hong Kong, to Europe, and coast to coast in North America. With inflationary conditions continuing across the globe, our focus has remained on providing value and ease to our customers both inside our stores and on our forecourts.”
Speaking with industry analysts this morning, Hannasch adds that the Canadian operations also were leading the way with strong performances in convenience and fuel, while consumers in the U.S. were cutting back.
“When we look at our sales in the U.S., we're seeing certainly some trading down to more budget and price-conscious decisions,” Hannasch adds. “We continue to see double-digit growth year over year on private label. So that tells me a certain segment of our customer base is stretched ... a little bit.”
“In-store sales continue to grow in all business units, with our packaged beverage category doing exceptionally well,” Hannasch adds.
He also points to the success seen in the U.S. with the launch of the company’s Innercircle loyalty program during the quarter that rolled out 430 stores across the Florida business unit. Innercircle is a free membership program with fuel and food rewards, and designed to provide users of the program with personalized experiences to drive loyalty and repeat business.
“With inflationary conditions continuing around the globe, our focus remains on providing value for our customers in our stores and on our forecourts,” he says.
Hannasch adds that compared with the same quarter last year, same-store merchandise revenues increased by 2.1% in the U.S., 2.7% in Europe and other regions and by 6.4% in Canada. “That was all driven by our diversified offerings in the beverage category and continued growth in our fresh food and private label programs. Across the networks, our fresh food program shows strong sales and profit, and continues to grow in double digits as our store teams continue to focus on optimizing pricing and continuing to maximize profitability,” he says.
“We are introducing more operational innovations that are bringing savings to the program, such as an equipment energy savings program we are introducing this year that we anticipate will save us more than US$4 million in electricity consumption. In North America, packaged beverage sales continue to be strong with new product lines in sport drinks, water and energy, and coffees resulting in the majority of the growth. In North America, we are seeing success in cold and frozen dispensed beverages, and the continued popularity of Mountain Dew Purple Thunder which launched in Canada during the quarter.”
Meanwhile, same-store fuel sales volumes rose 7.2% in Canada, 0.7% in the U.S. and declined 1.5% in Europe and other regions.
With files from The Canadian Press