For its 1st-quarter finished July 21, 2k19, Alimentation Couche-Tard Inc. (“Couche-Tard” or the “Corporation”) (TSX: ATD.A) (TSX: ATD.B) declares net earnings attributable to shareholders of the Corporation of $538.80M, representing $0.950 for each share on a diluted basis. The results for the 1st-quarter of fiscal 2k20 were affected by a pre-tax net foreign exchange loss of $6.50M, an income tax cost of $4.50M (of which $3.50M is attributable to shareholders of the Corporation) following the asset exchange transaction with CAPL, in addition to pre-tax acquisition costs of $0.20M. The results for the comparable quarter of fiscal 2k19 were affected by a $55.00M pre-tax impairment charge on CAPL’s goodwill, pre-tax restructuring costs of $1.50M, a pre-tax net foreign exchange loss of $1.00M, in addition to pre-tax acquisition costs of $0.50M. Apart From these items, the adjusted diluted net earnings for each share would have been $0.9701 for the 1st-quarter of fiscal 2k20, contrast with $0.8701 for the 1st-quarter of fiscal 2k19, a boost of 11.50%, driven by higher road transportation fuel margins in the U.S., and lower financing costs following deleveraging, partly offset by higher income tax rate. All financial information is in US dollars unless stated otherwise.
- Net earnings attributable to shareholders of the Corporation (“net earnings”) of $538.80M ($0.950 for each share on a diluted basis) for the 1st-quarter of fiscal 2k20 contrast with $455.60M ($0.810 for each share on a diluted basis) for the 1st-quarter of fiscal 2k19. Apart From certain items for both comparable durations, net earnings for the quarter would have been about $548.00M1 or $0.9701 for each share on a diluted basis, contrast with $0.8701 for each share on a diluted basis for the 1st-quarter of fiscal 2k19, a boost of 11.50%.
- Total merchandise and service revenues of $3.60B, a boost of 1.60%. Similar-store merchandise revenues raised by 2.50% in the U.S., by 0.70% in Europe and by 0.30% in Canada.
- Merchandise and service gross margin raised by 0.50% in the U.S. to 34.00%, while it reduced by 0.90% in Europe to 41.50%, and by 1.60% in Canada to 32.90%.
- Similar-store road transportation fuel volume raised by 0.60% in the U.S. and by 0.40% in Canada, while it reduced by 1.60% in Europe.
- Road transportation fuel gross margin raised by 4.160¢ for each gallon in the U.S. to 26.860¢ for each gallon, while it reduced by US 0.770¢ for each liter in Europe to US 8.440¢ for each liter, and by CA 1.510¢ for each liter in Canada to CA 7.40¢ for each liter.
- Circle K rebranding project continues in North America with more than 5,800 stores now displaying the new Circle K global brand.
- Return on capital employed2 at 13.20%, up 60 basis points, driven by higher earnings before interests and taxes.
- Adjusted leverage ratio2 continued to improve and reached 2.03: 1 partly driven by debt repayment of $150.00M.
- Approval, on September 4, 2k19, of a two-for-one split of all the Corporation’s issued and outstanding Class “A” and Class “B” shares on record as at September 20, 2k19.
NoteworthyItems of the 1st-Quarter of Fiscal 2k20
- The rollout of our Circle K brand in Europe was accomplished during the quarter, while in North America it is progressing steadily. As of July 21, 2k19, more than 5,800 stores in North America, counting 789 stores attained from CST, now proudly display our new global brand.
- On August 7, 2k19, subsequent to the end of the quarter, we declared the closing of an investment in Fire & Flower Holdings Corp. (“Fire & Flower”), a leading independent cannabis retailer based in Alberta, Canada. We invested about $26.00M in the form of unsecured convertible debentures to obtain a 9.90% ownership interest in Fire & Flower upon conversion. We have also been issued Common Share purchase warrants, that, if exercised in full in accordance with the terms thereof, would subsequently incline our ownership interest to 50.10%. Through this investment, we aim to combine our expertise in scaling retail stores with Fire & Flower’s retail experience and proprietary HiFyreTM digital platform to capitalize on new cannabis markets as they emerge.
- On May 28, 2k19, we repaid, without penalty, $150.00M if our $300.00M US-dollar-denominated senior unsecured notes issued on December 14, 2017 and maturing on December 13, 2k19. On August 13, 2k19, subsequent to the end of the quarter, we repaid, without penalty, the remaining $150.00M of these notes.
- During the 1st-quarter of fiscal 2k20, we repurchased 764,174 Class B subordinate voting shares under our share repurchase program, for a net amount of $46.20M. In addition, subsequent to the end of the quarter, we repurchased an additional 740,892 Class B subordinate voting shares, for a net amount of $45.10M, totaling 1,505,066 Class B subordinate voting shares and $91.30M since the launch of the program. All shares repurchased were canceled.