Alimentation Couche-Tard released its second quarter results, reporting net earnings of $88.2 million, down $9.4 million or 9.6%.
The drop was a result of a 9.10 cents per gallon decrease in motor fuel gross margins in the U.S., which had an estimated impact of more than $65 million before income taxes.
During the comparable period last fiscal year, motor fuel gross margins across the nation were unusually high, whereas this year’s margins are closer to expectations.
The net earnings reflect Couche-Tard’s prudent management of operating expenses, the increase in same-store merchandise sales and motor fuel volume, the contribution from acquisitions, the decrease in electronic payment mode expenses due to lower motor fuel prices, as well as lower financial expenses. The positive results were offset by a higher income tax rate, a weakened Canadian dollar and a higher depreciation expense.
“Except for the motor fuel gross margin in the U.S., our key performance indicators continued to improve over the second quarter. However, we feel economic conditions remain fragile”, said Alain Bouchard, president CEO of Alimentation Couche-Tard. “Accordingly, we prefer to remain cautious”, he added. “Our second quarter performance is nonetheless remarkable considering that the U.S. motor fuel gross margin was unusually high during the comparable period last fiscal year.”
Raymond Pare, vice-president and chief financial officer added, “our key indicators are rising in both the U.S. and Canada: same-store merchandise sales and motor fuel volume, merchandise and service gross margin, as well as our debt ratios. Last but not least, our operating expenses have decreased for a third quarter in a row. These results are very encouraging, especially considering that our teams are working very hard to improve the networks efficiency, product offering and customer service.”