Works to consolidate its position as a leader in the convenience store industry.
For its third quarter ended Jan. 29, 2017, Alimentation Couche-Tard Inc. announced net earnings of $287 million, representing 50 cents per share on a diluted basis.
“Notwithstanding the headwinds seen in the overall retail industry during the quarter, we continue seeing positive results. In Europe and Canada, merchandise and service gross profits were up by 39% and 10.9% respectively. This quarter, we also increased our road transportation fuel volumes by 15.7% through the contribution from our acquisitions and strong organic growth in the U.S. and Europe, while our teams once again delivered a strong performance on the cost control front” stated Brian Hannasch, president and CEO of Alimentation Couche-Tard Inc.
“On a global front, our company-wide Circle K rebranding is a continued success in Europe while we are accelerating the pace in the United States. I am proud of the work being done in order to quickly consolidate our position as leaders in the convenience store industry and therefore bringing us closer to becoming the world’s preferred destination for convenience and fuel,” added Hannasch. “We are seeing positive results from the integration of Esso. The transition went smoothly, we experience very positive response from consumers to our rebranding and merchandising initiatives and we anticipate delivering solid synergies.”
“As the closing of the CST acquisition deal is now anticipated to be in early fiscal year 2018, teams continue to be hard at work, actively planning the transition and identifying potential synergies and best practices. We have confirmed there is a lot of talent at CST and we are getting great collaboration from their teams, which is a key success factor in this process,” concluded Hannasch.
Claude Tessier, chief financial officer, added, “In the third quarter we finalized the acquisition of the Esso sites while keeping our leverage ratios at a comfortable level, thanks to our strong cash flows and usual financial discipline. Additionally, we are proud to announce that we have reached and will surpass our synergies objectives for The Pantry acquisition. The integration of The Pantry stores was a real success story of which our teams can be proud of. We will be able to apply this knowledge to future acquisitions.”
Third Quarter of Fiscal 2017 Highlights
More than 1,000 stores in North America and 910 stores in Europe are now proudly displaying our new Circle K global convenience brand. In connection with this rebranding, a depreciation and amortization expense of $8.4 million was recorded to earnings of the third quarter of fiscal 2017.
In connection with The Pantry integration, Couche-Tard reached its 24-month cost reduction annual run rate objective of $85 million, and quickly surpassed its merchandises and services supply cost reduction objective of $27 million, as well as its target for fuel synergies associated with the fuel rebranding of approximately 1,000 stores in the Southeastern region of the U.S.
“We will continue our efforts towards improving our efficiency and we are confident that additional synergies will be realized,” the company said.
Hurricane Matthew in October affected more than 500 stores, mainly through the loss of sales and incremental expenses, including inventory losses and clean-up costs—a combined negative impact of approximately $3 million before income taxes.
The company is actively working to obtain all the required approvals to finalize the CST acquisition and are confident that the transaction will close early fiscal year 2018.