Expansion of stores, lower taxes help fuel Q2 earnings

LAVAL, QUE. Alimentation Couche-Tard Inc. beat expectations as its net earnings rose nine per cent in its most recent quarter thanks in part to acquisitions and lower taxes.

The Quebec-based retailer, the world’s secondbiggest convenience store operator, says its net earnings attributable to shareholders were US$473.1 or 84 cents per diluted share for its second quarter of its 2019 financial year.

That’s up from US$432.5 million or 76 cents per share from the same period the previous year.

Adjusted profits that exclude one-time items in both periods increased to 84 cents a share for the quarter, up five per cent from 80 cents in the second quarter of 2018.

Revenues rose 21 per cent to US$14.7 billion, up from US$12.1 billion as same-store merchandise revenues — a key retail metric — rose by 5.1 per cent in Canada, 4.4 per cent in the U.S. and 4.6 per cent in Europe.

The company was expected to earn 82 cents per share in adjusted profits on US$13.9 billion of revenues, according to analysts polled by Refinitiv.

Revenue from the company’s fuel retail business, its biggest, increased 24.5 per cent to about US$10.90 billion. Couche-Tard has more than 8,000 outlets in the United States.

The same-store fuel volumes rose 1.2 per cent in the United States, its biggest market, while same-store merchandise revenue was up 4.4 per cent.

The company has been expanding its gasoline and convenience stores business with new acquisitions including CST Brands and Holiday Stationstores, a 522-store chain of gas stations and convenience outlets in the United States.

Revenue from merchandise and services business rose 11 per cent to US$3.46 billion in the quarter ended Oct. 14.