Sep 05, 2012
Couche-Tard Continues Search For North American Acquisitions
By Brian Berk
LAVAL, Quebec -- Alimentation Couche-Tard Inc.'s 2013 fiscal first quarter was certainly a memorable one regarding acquisitions.
During its most recent quarter ended June 30, the large convenience store chain closed its acquisition of Statoil Fuel & Retail ASA for $2.58 billion and bought 56 stores in the United States.
"We once again changed the face of the company on a continent where we had no presence until now," Alain Bouchard, Couche-Tard's CEO, said during the company's earnings call this afternoon, referring to Statoil's massive convenience store presence in Europe. "The acquisition should immediately contribute to earnings."
The Laval, Quebec-based company will continue to be aggressive regarding acquisitions. Bouchard said Couche-Tard is still looking into more North American acquisitions. "We are looking at 25- to 50-store [acquisitions] in North America," he said. "We have looked at bigger acquisitions, but they [haven't] met our criteria."
Bouchard added that Couche-Tard will look to "divest non-core assets" of its business to reduce the debt that acquisitions have and will cause. Reducing debt would also help maintain Couche-Tard's credit rating, or the rate at which the c-store chain can borrow money. Standard and Poor's currently rates Couche-Tard's debt as BBB-.
As for Couche-Tard's overall earnings, the company earned $173 million for its 2013 fiscal first quarter, compared to a net profit of $142.7 million during the same timeframe last year.
Revenues at Couche-Tard's Circle K U.S. stores were up across the board. Merchandise and service gross profit increased to $362.9 million, vs. $336.6 million in 2012's fiscal first quarter. Road transportation and fuel gross profit improved to $220.2 million vs. $160.4 million last year.
U.S. in-store merchandise sales rose 2.8 percent. "Foodservice sales were more than enough to compensate for tobacco," said Bouchard. "We have not abandoned tobacco. We are attempting to maintain margins [in that category]."
Raymond Paré, Couche-Tard's vice president and chief financial officer, added that Crowne, the company's private label tobacco business, is a "good solution" to counteract the difficult tobacco margin environment in the United States.
Looking ahead, Paré was very bullish about Couche-Tard's foodservice offerings. "Our foodservice progress has been great," he said. "Foodservice is still in the early stages and will improve."
570 Lake Cook Rd, Suite 310
Deerfield IL 60015
Convenience Store News
CSNews Supplier Guide
CSNews for the Single Store Owner
Private Label ⇒ Store Brands
Independent Grocer Network
The Gourmet Retailer
Directory of Convenience Stores
Hispanic Retail 360
|© 2013 Stagnito Media. All rights reserved.|