The Quebec giant Couche-Tard thinks that smokers are turning more to contraband cigarettes because of inflation that is driving up prices.
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“In Canada, we saw a little more pressure in the cigarette category. There seems to be a change because of the black market, ”launched Claude Tessier, Couche-Tard’s chief financial officer, during the investor conference on Wednesday morning.
Later in the call, analysts returned to the charge asking about this new phenomenon.
“There is a resurgence in the black market. I think these are temporary pressures due to inflation and prices in general for consumers. They’re probably grabbing some market share,” said Couche-Tard CEO Brian Hannasch.
According to the Laval multinational, there could also have been a certain increase in tobacco consumption during the pandemic, which is escalating now.
“Since it reopened, people may be smoking a little less,” he observed.
Declining profits
Separately, the convenience store giant reported net income of US$477.7 million for the fourth quarter of 2022, compared to US$563.9 million in 2021, an amount down 15.3%.
More broadly, Couche-Tard posted net income of US$2.68 billion for its fiscal year 2022, down slightly by 0.8% from the cumulative US$2.71 billion in fiscal 2021.
Couche-Tard is worth nearly $54 billion on the stock market.
Its stock has jumped 14.14% since one, unlike several companies that have seen their shares plunge in recent months.
As markets closed on Wednesday, its stock was trading at $52.64, down 74 cents or 1.39% from the open.
– With the collaboration of QMI Agency