Couche-Tard Q4 profit surges 96% to $863M on higher fuel margins

Alimentation Couche-Tard Inc. reported fourth-quarter net earnings of $863.4 million, more than doubling from $439.4 million a year earlier, as higher fuel margins and same-store sales growth offset weaker fuel demand in the U.S. and Europe.

"Our focus on delivering on our customer promise through our Core + More strategy is driving strong momentum across our U.S. business, with improved traffic and ongoing growth in key categories such as food and packaged beverages," Chief Executive Officer Alex Miller said.

Revenue rose 19.8% to $19.5 billion in the quarter ended April 26, beating the $18.51 billion consensus estimate. Adjusted diluted earnings per share of 73 cents topped the 54-cent analyst forecast compiled by FactSet, a 58.7% increase from 46 cents a year earlier. The results included a $260.9 million pretax net recovery from the resolution of long-standing legal matters.

The Laval, Quebec-based company's road transportation fuel gross margin jumped 9.17 cents to 52.44 cents per gallon in the U.S., while same-store merchandise revenue increased 3.4% in the U.S. and 1.1% in Europe and other regions. Same-store fuel volumes fell 2.1% in the U.S. and 4.4% in Europe, though Canada posted a 2% gain. Total merchandise and service revenue rose 7.7% to $4.5 billion.

For the full fiscal year, revenue increased 5% to $76.5 billion, and diluted EPS rose 24.4% to $3.37. The company repurchased 30 million shares for $1.6 billion during the year and raised its annual dividend 10.5% to CA 84 cents. Couche-Tard opened 103 new-to-industry stores and completed 27 relocations or reconstructions, bringing its total network to close to 17,300 sites across 27 countries and territories.

CFO Filipe Da Silva said disciplined expense management kept normalized cost growth below inflation, protecting profitability while the company continued investing in the business. The company's return on capital employed improved to 13.7% from 12.2% a year earlier.

The strong quarter reinforces the momentum behind Couche-Tard's Core + More strategy, which the company detailed in February. Investors will watch for continued margin expansion and progress on the company's European synergies target of €120 million ($140.5 million) by fiscal 2027.

This article is for informational purposes only and does not constitute investment advice.