Release Date: November 26, 2024
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 healthy fuel margins across its network, particularly in Europe and Canada.
- The company successfully managed to reopen most of its stores quickly after being impacted by two major hurricanes in the US.
- Alimentation Couche-Tard Inc (ANCTF) is making significant progress in its M&A activities, including the acquisition of GetGo and a small tuck-in purchase in the US.
- The company is expanding its private label offerings, which are growing in popularity and contributing to sales growth.
- Alimentation Couche-Tard Inc (ANCTF) is seeing positive momentum in its loyalty programs, with significant increases in membership in both the US and Europe.
Negative Points
- Same-store merchandise revenues decreased in the US, Europe, and Canada compared to the same quarter last year.
- The company faced challenges from catastrophic hurricanes in the US, impacting store operations and sales.
- Inflationary pressures and high interest rates continue to pose challenges to Alimentation Couche-Tard Inc (ANCTF)'s operations.
- The company's performance in Hong Kong was weak, driven by a decrease in cigarette units and increased sales taxes.
- US merchandise and service gross margins decreased, impacted by promotional activities and a challenging economic environment.
Q & A Highlights
Q: Can you explain the continuation of promotional activity in the US and its impact on same-store sales?
A: Our promotional activities, particularly around dispensed beverages, were planned to extend into the fall. These promotions have now ended, and we are seeing positive results from shutting down several promotional activities. We are now focusing on meal deals, which have been well-received and offer a more attractive margin profile.
Q: What was the impact of the hurricanes on your US operations?
A: The hurricanes impacted our same-store sales in the US by approximately 40 basis points for merchandise and 70 basis points for volume.
Q: Can you discuss the cost control initiatives and their impact on SG&A expenses?
A: Our goal is to beat inflation by 1%. We have reduced store hours by 3% through automation and streamlined processes. We are also centralizing negotiations for non-fuel-related contracts and have achieved savings in marketing and electronic payments.
Q: How is the integration of TotalEnergies' assets progressing in Europe?
A: The integration is progressing well, with improvements in back-office functions and pilot programs for our Horizon concept in stores. We expect to see full synergy impacts in the next two to three years, with promising results already.
Q: What are the unique aspects of GetGo's food and loyalty programs compared to previous acquisitions?
A: GetGo's cafe market concept offers a holistic food experience with ordering screens, similar to Sheetz or Wawa. Their loyalty program is integrated with grocery stores and backed by compelling technology, which resonates well with consumers.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
