LAVAL, Que. - Alimentation Couche-Tard Inc. says its net earnings rose to $872.4 million in the first quarter of its 2023 fiscal year, a 14% increase from the prior year's quarter.
The convenience store operator, known for its Couche-Tard and Circle K brands, says its profit amounted to 85 cents per diluted share, compared to 71 cents per diluted share in the first quarter of fiscal 2022.
The company reported total revenue for the quarter of $18.7 billion, a year-over-year increase of $5.1 billion or 37.4%.
It attributed the increase in revenue to higher selling costs of fuel, as well as merchandise and service revenue growth and the impact of acquisitions.
The retailer said its revenue growth was partially offset by lower fuel demand, which it said is the result of higher retail fuel prices, the work-from-home trend and the impact of its fuel rebranding project.
In a call with analysts, company leaders said higher fuel and food costs are impacting customer driving and shopping habits and boosting sales of its private label brand.
President and CEO Brian Hannasch says while some big brands like Coca-Cola or Monster Energy drinks have maintained strong sales, customers are "trading down'' on other food items.
He says the Quebec-based company is seeing strong double-digit sales growth of its house brand as people look for value, especially in categories such as confection and salty snack food.
Hannasch says inflation at the pump affected the volume of fuel sold, which declined as consumers looked to save money on gas.
In addition, the company reached an agreement with the Competition Bureau to resolve its concerns over Couche-Tard's $346.8-million deal to buy the Wilsons chain of gas stations in Atlantic Canada.
The company has agreed to sell 46 Wilsons sites and supply agreements and one Couche-Tard gas station to address concerns raised by the federal competition regulator.
On an adjusted basis, Alimentation Couche-Tard reported earnings of $875 million for the quarter, compared with $758 million in adjusted net earnings in the prior year's quarter.
Couche-Tard is a global convenience and fuel retailer, operating in 24 countries and territories, with more than 14,000 stores, of which approximately 10,700 offer road transportation fuel. The company operates in Canada, the U.S, Europe and Asia under numerous retail banners, including Couche-Tard, Circle K, Holiday and Ingo. Approximately 122,000 people are employed throughout its network.
-with files from Michelle Warren