Alimentation Couche-Tard passed on consumers the bill for rising fuel prices, and its margins remained “relatively stable” despite an inflationary shock at the pump. “It’s not good news for consumers when you’re talking about a price shock,” Chairman and CEO Brian Hannasch said Wednesday during a conference call to discuss the latest quarterly results. . The increase was so significant that the industry was forced to follow it. »
Soaring pump prices are a global phenomenon and all markets (Canada, United States, Europe) of convenience store and service station operators have been affected. Without mentioning critics who accuse the industry of anti-competitive practices, Brian Hannasch said the gas station industry remains “very” competitive. “We are the only ones to display our prices for all to see. »
Last week, the leader of the Parti Québécois, Paul St-Pierre Plamondon, accused the oil companies of agreeing on prices, which he compared to “robbery”. A few days earlier, the federal government had announced that it had seized the Competition Bureau to monitor the fuel market, asking it to ensure that there was no collusion in the determination of the price of gasoline while the war in Ukraine drives up the price of oil. The PQ leader, however, accused the Competition Bureau of not doing enough.
It’s still too early to tell whether consumers will reduce their trips to adjust to higher prices, Hannasch said. He notes that oil and gas prices have stabilized since last week’s peak. “If it remains a short-lived shock, I do not believe that it will lead to a change in behavior,” continued the leader, who believes that the answer to the question will be clearer in the next quarterly results.
Couche-Tard had unveiled the day before, after the markets closed, results that exceeded analysts’ expectations thanks to higher-than-expected margins for service stations in the United States.
In the third quarter (ended January 31), the company posted a 22.9% increase in net income and its revenues jumped 41.2%. “Overall, the results demonstrate the strength of Couche-Tard’s model, despite the effect of rising COVID-19 cases on demand for fuel and for products in convenience stores,” said Irene Nattel, RBC Capital Markets.
Chris Li, of Desjardins Capital Markets, points out that several projects aimed at supporting the company’s growth are “on the right track”. He gives as an example the deployment of fresh food in 3,200 convenience stores around the world, a segment that is showing strong growth, the installation of nearly 1,000 electric charging stations in Europe and the use of local data in merchandising strategies. .
The chain of convenience stores and gas stations saw its profit reach US$746.4 million, or US70¢ per share, for the quarter ended January 31, when it had been US$607.5 million , or US55¢ per share, in the same period a year earlier. The Laval company’s revenues totaled $18.58 billion in the most recent quarter, while its sales had been $13.16 billion a year earlier. Adjusted earnings, which exclude one-time items, were US70¢ per share, compared to US56¢ per share for the same period last year.