Couche-Tard to focus on foodservice, beverage alcohol to drive sales in the coming years
Alimentation Couche-Tard Inc. announced strong first quarter earnings for the year at the close of markets on Tuesday, driven by what the company’s president and CEO says were positive store sales driven by improved foodservice offerings and in Canada, a strong fuel business.
Net earnings were US$782.5 million for the first quarter of fiscal 2026 compared with US$790.8 million for the first quarter of fiscal 2025. Adjusted net earnings were approximately US$737.0 million compared with US$790.0 million for the corresponding quarter of last year, representing a decrease of 6.7%.
Same-store road transportation fuel volumes decreased by 0.9% in the United States, and by 1.3% in Europe and other regions, while it increased by 2.2% in Canada.
"We are pleased by our improved performance in this first quarter of the new fiscal year,” said Alex Miller, president and chief executive officer of Alimentation Couche-Tard. “Across our network, we are reporting positive same store sales, which includes our U.S. market for the first time in several quarters. This progress is propelled by our focus on providing compelling value and ease, especially in our food and beverage offers, to win our customers who continue to watch their spendings. In our fuel business, we had overall good results, especially in Canada and our larger European markets, while in North America, fuel margins remained aligned with previous quarters.”
A highlight of this quarter was the completion of the acquisition of 270 company-owned and operated convenience retail and fuel sites operating under the GetGo Café + Market brand from supermarket retailer Giant Eagle Inc., for US$1.6 billion. GetGo Café + Market sites are in the states of Indiana, Maryland, Ohio, Pennsylvania and West Virginia, in the United States.
As part of the acquisition, the company obtained U.S. Federal Trade Commission regulatory approval for the acquisition involving an agreement to sell 34 Circle K-branded company-owned and operated convenience retail and fuel locations and one GetGo Café + Market property, in Pennsylvania, Indiana and Ohio, in the United States.
“We were also proud to close this quarter on 270 sites operating under the GetGo Café + Market brand, and we are already working closely with those teams to learn more about GetGo's popular food and loyalty programs as we start to grow together,” Miller said.
Store expansion to continue
During an analyst briefing on the quarterly results held Wednesday morning, Miller added that Couche-Tard convenience expansion in North America continues on track with more stores to be added in the coming years. Early this year, Couche-Tard said it is aiming to complete 41 new store openings, on top of the 97 new store openings it had at the end of fiscal year 2025.
“We opened 10 new stores in Q1 [of fiscal year 2026] and are on track to open up over a hundred in North America for this fiscal year,” Miller added. “Our new stores include dozens of high-speed diesel and rural locations, and currently we have nearly 65 stores under construction and [more] sites in our overall real estate development pipeline.”
When it comes to convenience, Miller pointed to the strong results across North America and Europe where total merchandise and service revenues came in at US$4.7 billion, an increase of 4.5%. Same-store merchandise revenues increased by 0.4% in the United States, by 3.8% in Europe and other regions, and by 4.1% in Canada. Merchandise and service gross margin increased by 0.9% in the United States to 34.6%, while it decreased by 0.9% in Europe and other regions to 38.9%, and by 0.9% in Canada to 33.9%.
Foodservice and beverage alcohol sales drivers
He highlighted the strong performance of Canada, where strong store sales were driven by the opening of the province of Ontario’s expanded beverage alcohol market, where Couche-Tard was the first convenience retailer to begin selling beverage alcohol at its stores, offsetting the continuing drop in tobacco and related product sales.
“In the adult beverage category, Canada continued to have a strong performance as our market leading efforts are clearly resonating with our customers following changes,” Miller said. “Last year in Ontario, our beer sales again, [and] experienced notable growth in our Central Canada business unit. We more than doubled the sales in the wine category compared to last year, liquor performance was equally robust, the impressive same store sales growth and alcohol in Canada more than offset the decline in tobacco in the region, which continues to be impacted by illicit trade and removal of popular products in the other nicotine products category.”
Where he sees the greatest growth opportunities in Canada and in the United States for Couche-Tard in the coming years is with its foodservice offerings, where Couche-Tard he said will be focusing on rationalizing its offerings to meet customer tastes and demands while maintaining margin growth and profitability.
We are focused on winning our customers by providing compelling value on products and services,” he told analysts. “Our meal deals in North America continue to deliver consistent quarter over quarter gains at the end of Q1. In North America, we sold 8.6 million food bundles with a weekly average exceeding 750,000 from about 540,000 at the end of fiscal year 2025, nearly a 40% increase. We continue to optimize our meal deal offers based on vendor engagement and customer purchasing behaviour, and we are actively reviewing opportunities to expand the offer to drive incremental growth. The initiative is very popular in Canada where meal deal sales doubled in Q1 versus the prior quarter.”
“In our wine and food strategy, we have been laser focused on execution and SKU rationalization,” he added. “We have significantly reduced the number of freshly prepared foods in our stores to enhance operational excellence and ease while optimizing our assortment and as we focus on execution value and simplicity, and we are also dialing up flavour and innovation [in foodservice].”
As part of that flavour and food offering innovation, Couche-Tard announced a new fresh food partnership with chef and restaurateur Guy Fieri where Couche-Tard and Fieri will debut 11 exclusive Flavortown-inspired breakfast, lunch and dinner items at participating Circle K and Holiday Stationstores locations starting in September.
The new menu options will cover breakfast, lunch, dinner and snacks, and the first locations to be chosen for the debut will be in Circle K and Holiday Stationstores in Alaska, Idaho, Michigan, Minnesota, Montana, North Dakota, South Dakota, Washington, Wisconsin and Wyoming.
“We grew food service four point a half percent in the quarter. We grew food gross margin by 500 basis points. Just I talked in my comments about our food bundles and the continued trajectory of that and our ability to show and highlight value for our customers that they're really responding to,” Miller reiterated on the strong growth currently in the foodservice operations, and going forward in the coming years.
Fuel sales and the summer months
Filipe Da Silva, chief financial officer, added: "We are encouraged by our first quarter results, which were partly driven by an enhanced gross profit margin resulting from better food program execution and reduced spoilage. Combined with our disciplined cost control and a sharp focus on efficiency keeping expense growth below the rate of inflation, we are optimistic about our operational priorities. Our TotalEnergies assets once again produced solid sequential performance, with synergy delivery tracking ahead of plan. With our share repurchase program now in full motion, we view it as another way to create sustainable long-term shareholder value while optimizing our balance sheet."
According to Miller, fuel margins in North America also remained aligned with previous months, with sales helped along by Couche-Tard’s focus in the U.S. on providing “compelling value to our customers with our very popular Fuel Days, including two in August coinciding with the beginning of school and the end of summer travel, which were held at over 4,700 participating U.S. locations.”
“Our road transportation fuel gross margin was 44 cents per gallon in the United States, a decrease of four point 13 cents mainly due to a competitive pressure, especially in our markets of Europe and over Europe and over regions,” Da Silva added. “Margin average 11.41 U.S. cents per litre an increase of 2.73 cents due to improved fuel market conditions in certain regions and in Canada margin average 14.21 Canadian cents per litre an increase of 1.10 cents. Fuel margins remain healthy throughout our network due to the continued work on the optimization of our supply chain and strong execution in our stores and leveraging our global scale.”
