Alimentation Couche-Tard, the Canadian company behind the Circle K convenience store chain, has reported unexpectedly poor sales and profits for its most recent quarter. The company experienced a 2.2% drop in sales and a significant decline in adjusted profit, which fell to 65 cents per share — well below the 84 cents analysts had predicted.
According to CEO Brian Hannasch, the company’s struggles can be attributed to “near-term headwinds, especially in the United States,” as well as weak customer traffic. Couche-Tard’s profits took a substantial hit, plummeting from 737.4 million in the previous period to 623.4 million, marking a 15.5% decrease.
Couche-Tard, which generates the majority of its revenue from fuel sales, acknowledged that “a portion of our customers remains impacted by challenging economic conditions.”
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This sentiment was reflected in the company’s merchandise revenue per store, which includes items like food and cigarettes.
Owner of Circle K stores reports steep profit drop, blames ‘headwinds, especially in US’ https://t.co/PMEL673ecQ pic.twitter.com/x2xfCgldJn
— New York Post (@nypost) March 21, 2024
All three of Couche-Tard’s geographic segments experienced a decline in this metric — a phenomenon not seen in over a decade, according to Stifel Financial analyst Martin Landry.
While Couche-Tard’s performance was undoubtedly disappointing, Landry noted that rival company 7-Eleven experienced an even more significant decline, suggesting that the issues faced by Couche-Tard are indicative of broader industry-wide weakness.
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Prices in the United States have skyrocketed by an astonishing 19% since December 2020. As American consumers continue to grapple with the impact of inflation on their daily lives, companies like Couche-Tard are feeling the pinch.
