Couche-Tard’s total merchandise and services revenues in the fourth quarter increased by 9.3% to $1,766m, with net earnings increasing by 24.3% to $146.4m.
For the full year, merchandise and service revenues increased by 15.1% to $7,596m, with net earnings up 25.2% to $572.8m.
Investing in its European operations to drive efficiencies and growth
These results are the first set to incorporate a full year of its European acquisition, Statoil Fuel & Retail. During the year, the retailer has focused on analysing the acquired business and putting plans in place for the year ahead. Significant investment has already been made in Statoil to drive growth and improve efficiency, including establishing a new IT infrastructure, and marketing initiatives focused on its new signature fuel brand, “miles”, and its “Coin Offer" program which promotes its value fresh food offer.
Cost savings and synergies already being realised
The retailer has also been focused on identifying and implementing synergy and cost reduction opportunities. For the fourth quarter, Couche-Tard recorded synergies and cost savings estimated at approximately $11.0m, with a total of $28.0m for the full year. These came from a variety of sources including the renegotiation of agreements with suppliers, reductions in store costs and the restructuring of certain departments. Based on the progress that has been made in this area, the retailer maintains is goal of annual synergies ranging from $150m to $200m before the end of December 2015.
Challenging conditions in North America
However, in North America, fourth quarter performance was impacted by unfavourable weather conditions and the on-going challenging economic conditions. Same-store merchandise revenues increased by 0.1% in the US and by 0.9% in the US. In the US in particular, changes made to the supply terms in the cigarette category, and the competitive environment for tobacco products had impacted sales, reducing same-store sales by around 1.1%. In the year ahead, the focus will be on improving its store network and developing its fresh food offer in the US to drive growth, while continuing with the integration activities.