Esso acquisition gives Couche-Tard operations a boost
Alimentation Couche-Tard capped its fiscal year with a strong fourth quarter as its Canadian operations got a boost from the full impact of its acquisition of Esso convenience stores.
The Quebec-based owner of Circle K, Couche-Tard and Mac's convenience stores and gas bars said its Canadian sales increased by 81% from a year ago while gross profit was up 54%.
Couche-Tard purchased 278 Imperial Oil Canada retail stores in Ontario and Quebec for $1.7 billion. The deal closed in October, but the full impact from the acquisition was realized in the company's fourth quarter, ended April 30.
Canada accounted for 14% of Couche-Tard's global sales in the quarter, up from 10% a year earlier.
Couche-Tard followed the Esso deal by adding nearly 1,300 CST Brands stores in Canada and the U.S. in a deal that closed June 28 after the company agreed to sell about 420 locations to satisfy Competition Bureau requirements.
It also acquired 53 Cracker Barrel sites in Louisiana in May and agreed this week to buy a 522-store network in the U.S. Midwest run by Holiday Station stores in a deal valued at US$1.5 billion to US$2 billion, according to analysts.
Overall, the company earned US$277.6-million for its fourth quarter as total revenue soared 30.1% over the same time last year.
"We continued to experience strong results in Europe while observing softer conditions in the broader North American retail industry as well as a weak fuel margin environment in the United States," CEO Brian Hannasch said in a news release.
Total revenue for the 13-week quarter was US$9.6 billion -- up from US$7.4 billion a year earlier.
Its net profit, reported in U.S. currency, was up 36.1% from last year's fourth quarter, which had only 12 weeks.
After excluding the impact of foreign exchange and various expense items, the company earned 52 cents per share -- up 36.8% from last year.
Analysts had estimated $9.4 billion of revenue, according to data from Thomson Reuters.
Couche-Tard is in the process of rebranding its stores to Circle K outside of Quebec. More than 1,300 stores in North America and 1,200 locations in Europe have changed banners so far.
Same-site fuel volumes grew in the U.S. and Europe, but declined 0.2%t in Canada due to ongoing economic challenges in Western Canada.
For the full year, the company earned US$1.21 billion on US$37.9 billion of revenues, compared to US$1.19 billion on US$34.1 billion a year earlier.