This week brought with it one of those good news/bad news stories concerning one of Canada’s increasingly heavyweight businesses. Quebec-based Alimentation Couche-Tard (T.ATD.B) came in with quarterly figures that were better than the same period last year, but not sufficient to please the analysts, and hence, those holdings stock in the convenience store chain operator. All figures are in U.S. dollars unless specified otherwise.
Net income for the third quarter, which ended in early February, rose to $142.5 million, or 75 cents a share, from $86.8 million, or 48 cents, a year earlier. Excluding foreign exchange losses and acquisition costs, net earnings were 81 cents a share. Revenue at Couche-Tard rose 75% to $11.57 billion.
However, analysts, on average, had expected EPS of 87 cents on revenue of $11.1 billion, according to Thomson Reuters.
Regular visitors to this site know that Couche-Tard has been on something of a buying frenzy in recent months, having added 60 company-operated or franchised and other affiliated stores to its holdings during the quarter.
Last month alone, it added another 29 company-operated stores last month in Illinois, Missouri and Oklahoma, from Dickerson Petroleum Inc.
A lot is obviously expected of this growing business: Couche-Tard operates more than 6,100 convenience stores in its network in North America, most of which sell fuel, under banners that include Mac's and Circle K. Worldwide, the number is around 13,000, with stores under the Couche-Tard banner in Europe, Mexico, Japan, China and Indonesia.
Moreover, with Norway's Statoil Fuel & Retail being added to the ranks, 2,300 of those stores are fuel stations in Scandinavia, Poland, the Baltics and Russia, most of which also sell convenience goods.
The last full-year bottom line was announced in July, when the chain – gathering its breath for the buying binge, reported net earnings of $457.6 million, compared to $369.2 million the previous fiscal year, an increase of $88.4 million or 23.9%.
Meantime, diluted net earnings per share, adjusted for non-recurring items, were $2.42, compared to $2.00 for fiscal 2011, an increase of 21.0%. Revenues were $23.0 billion, up $4.4 billion, or 24.0%.
Many Couche-Tard locations are gas stations co-branded with Irving Oil. The first stage of this partnership began in 2001 in Quebec. Both companies contributed locations to the partnership: some had convenience stores that previously operated under Irving's banner, while others previously sold fuel under the Couche-Tard brand.
The third-quarter news, which rolled in Tuesday, took a bit of a toll on the company’s stock price, which collapsed as much as 6% from a perch above $56.00. The price did recover, however, to about $53.72 on the Toronto Stock Exchange, toward the close of business on Friday. The stock peaked for the last 52 weeks on March 11, at $57.95, towering above a gulch of $32.48 on March 22 of last year.
It’s a question now of how much this multitude of acquisitions make its presence felt in the bottom line of a growing company, whose outreach is truly worldwide!
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