Couche-Tard in a Growth Spurt

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Couche-Tard in a Growth Spurt

LAVAL, Quebec -- Alimentation Couche-Tard Inc., operator of more than 5,600 Circle K and Mac's convenience stores, experienced continued strong performance in its first fiscal quarter of 2008, with revenues of $3.6 billion, a 25.1-percent increase to $716.4 million, the company stated. Of the first-quarter 2008 revenue, $572.6 million was attributed to acquisitions carried out over the past 12 months by the company.

"We are very pleased with this momentum," Alain Bouchard, chairman, president and CEO of Couche-Tard, said in a written statement. "It shows that initiatives such as our IMPACT program as well as our branding and pricing strategies are producing solid internal growth despite tough markets right now, especially in the South of the United States."

For the first quarter, ending July 22, 2007, net earnings grew 54.9 percent to $69.1 million. However, first quarter of 2007 net earnings were impacted by an unusual tax expense of $9.9 million, the company stated. Without this factor, net earnings grew 26.8 percent.
"Also, the company-operated stores acquired during the last 12 months are already profitable and they have yet to reach their full potential," Bouchard added.

During the quarter, the company finalized a 28-store acquisition from Sterling Stores, which closed June 5, according to the company. Couche-Tard also acquired four other stores through separate transactions during the first quarter.

In addition, the company implemented its IMPACT program in 67 company-operated stores during the quarter. As a result, 52.4 percent of its company-operated stores have been converted to the IMPACT program. In addition, with the implementation of beer caves in IMPACT renovations, sustained growth in this product category continues, according to the company.

Internal growth, measured by same-store merchandise revenues, increased 3.5 percent in the U.S., primarily from its pricing strategies, which were customized for competitive environments in each of its six regions. Meanwhile, same-store merchandise revenues increased 5.4 percent in Canada, the company stated.

Motor fuel revenues climbed $547 million, or 31 percent, which was partly attributed to higher average retail price at the pump in the company-operated U.S. and Canadian stores.

During fiscal 2008, Couche-Tard plans to deploy its IMPACT program in approximately 400 stores, and build or acquire approximately 60 stores on an individual basis, the company stated. In addition, the company is confident it can carry out approximately 250 store acquisitions.