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Couche-Tard results fall short of expectations

A dog named Roxy waits outside a Couche-Tard convenience store in Montreal, April 18, 2012.


Convenience store operator Alimentation Couche-Tard Inc. booked a 56 per cent profit increase in the third quarter, helped by acquisitions, improved margins on fuel and the growing contribution of merchandise and service sales.

The Laval, Que.,-based convenience store giant said net profit for the third quarter reached $142.5-million (U.S.), or 75 cents per share -- 81 cents on an adjusted basis -- up from $86.8-million or 48 cents in the year earlier period.

The earnings failed to beat the consensus analysts' estimates of 87 cents per share in adjusted earnings and 93 cents in net income, as U.S. fuel margins came in lower than expected and depreciation costs were higher.

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Profit was offset partly by the increased debt taken on to finance last year's $2.1-billion acquisition of Norway-based Statoil Fuel & Retail ASA and $13.6-million in foreign exchange losses.

Revenue rose 75 per cent to $11.57-billion, about $470-million higher than the analysts' forecast.

Besides Statoil, Couche-Tard also made some tuck-in acquisitions in the U.S. recently that also contributed to the huge boost in revenue.

"Our recent acquisitions continue to contribute significantly to our results," president and chief executive officer Alain Bouchard said in a news release Tuesday.

"Despite the difficult and uncertain conditions in some markets, we grew the organic contribution, both in terms of merchandise, service and motor fuel," said Mr. Bouchard.

The company continues to identify and implement ways to boost efficiency and increase revenues in Europe and is confident it will make its target of $150-million to $200-million in annual synergies and cost savings from the Statoil acquisition, he said.

Couche-Tard's executive team has stated previously that it's not ruling out other potential acquisitions in Europe.

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Statoil has about 2,300 outlets in six Scandinavian countries as well as in Poland, the Baltics and Russia.

Statoil represents a major part of Couche-Tard's corporate strategy to expand beyond its North American base.

Couche-Tard has more than 5,800 stores in Canada and the U.S. under the Mac's, Couche-Tard and Circle K banners.

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