Fuel operator Alimentation Couche-Tard remains confident in its global network and long-term strategic growth plan despite parts of its convenience and fuel business facing challenges in the second quarter.
Total merchandise and service revenues grew 6.6% year on year to $4.4 billion (€4.2 billion) in this period, while same-store merchandise revenues fell by 1.6% in the United States, 1.5% in Europe and other regions, and 2.3% in Canada.
Alimentation Couche-Tard attributed this decline to constraints on discretionary spending as low-income consumers faced challenging economic conditions and the continuous decline in the cigarette industry.
Net earnings attributable to shareholders declined 13.5% year-on-year in the second quarter to $708.8 million (€674.6 million), from $819.2 million (€779.6 million) in the same period last year.
Quarterly Highlights
Revenue for the second quarter increased by 6.0% year-on-year, to $17.4 billion (€16.6 billion), mainly due to contribution from acquisitions and higher revenues in its wholesale fuel business.
However, it was partly offset by a lower average road transportation fuel selling price, and softness in fuel demand and traffic as low-income consumers were impacted by challenging economic conditions.
Gross profit for the quarter amounted to $3.2 billion (€3.05 billion), up 7.3% year on year, while adjusted EBITDA increased by $36.1 million (€34.4 million), or 2.4% year on year, to $1.5 billion (€1.4 billion).
Filipe Da Silva, chief financial officer of Alimentation Couche-Tard, stated, "Throughout the second quarter, we saw sequential monthly improvements, particularly in same-store merchandise revenues in the United States, and are encouraged by this positive momentum as we enter the third quarter.
"Our strategic focus on operational excellence and cost management delivered a modest 2.3% of normalised growth of expenses, enabling us to outpace a slowing inflationary environment. As we continue to pursue growth opportunities, our strong balance sheet and disciplined capital deployment will support our proven long-term goal of creating value for our shareholders."
