Release Date: March 19, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Alimentation Couche-Tard Inc (ANCTF, Financial) reported positive same-store sales in Canada and Europe, with sequential improvement in the United States despite historic winter storms.
- The company is maintaining market share in the U.S. fuel business with margins aligned with recent trends.
- The acquisition of assets from TotalEnergies in Europe is on track for synergy realization, contributing to solid results.
- The company has expanded its meal deal promotions to Canada, selling nearly 465,000 meal deals weekly across North America.
- Alimentation Couche-Tard Inc (ANCTF) has seen a 13% increase in Inner Circle loyalty program enrollments in the U.S., nearing 10 million members.
Negative Points
- Same-store merchandise revenues in the U.S. decreased by 0.1%, impacted by severe winter storms.
- The U.S. fuel business saw a 3% decrease in same-store road transportation fuel volumes.
- Inflationary pressures persist, affecting consumer spending and posing challenges to maintaining margins.
- The company faces uncertainty in its pursuit of a combination with Seven & i Holdings, with no definitive agreement reached yet.
- The U.S. tobacco category experienced a decline, with overall nicotine performance slightly negative.
Q & A Highlights
Q: How should we be thinking about the evolution of the macro backdrop as we move through Q4 and into F26?
A: Alex Miller, President and CEO, emphasized the uncertainty in the macro environment, particularly in the United States. The company is focusing on core initiatives like food, reducing SKU count, and controlling costs and capital expenditures. They aim to maintain market share and be disciplined with costs amidst the uncertainty.
Q: Can you provide an update on the progress with Seven & i Holdings?
A: Alex Miller clarified that no non-disclosure agreement has been signed with Seven & i. The focus remains on a friendly approach to engage with Seven & i, highlighting mutual benefits for shareholders and stakeholders. They are working on a marketing package for potential divestments in the U.S.
Q: What is the current M&A environment like, and how active are you on files other than Seven & i?
A: Alex Miller stated that M&A activity remains robust across their geographies, with ongoing engagements in Europe and the U.S. They continue to explore opportunities of all sizes, leveraging their decentralized model to evaluate various prospects.
Q: Can you elaborate on the US same-store sales performance across categories?
A: Alex Miller noted that tobacco sales were down, with cigarette declines offset by growth in other nicotine products. Food sales grew by about 3%, and packaged beverages also showed growth. The Netherlands saw a significant boost in sales due to regulatory changes affecting cigarette sales.
Q: How are you addressing the potential impact of tariffs on your margin structure?
A: Alex Miller explained that tariffs are not expected to significantly impact their business as most products are sourced locally. The larger concern is the potential inflationary impact on consumers, and the company is focused on providing value through meal deals and bundles.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
