Alimentation Couche-Tard Inc. reported its earnings for the first quarter of fiscal 2025 and gave an update on its agreement to acquire GetGo Café + Market convenience stores from supermarket retailer Giant Eagle Inc. for $1.6 billion.
Brian Hannasch, president and CEO of Alimentation Couche-Tard, said the fragmented market in the United States offers significant consolidation opportunities, and the challenging economic landscape is accelerating this trend, creating growth prospects for Alimentation Couche-Tard, which owns the Circle K convenience-store chain.
Couch-Tard on Aug. 19 submitted a proposal to acquire Seven & i Holdings Co. Ltd., the owner of 7-Eleven. Seven & i said on Friday it rejected Couche-Tard’s offer as it “grossly undervalues” the global c-store company.
The same day it put in a bid for Seven & i Holdings, Couche-Tard said it had agreed to acquire GetGo Café + Market convenience stores from Giant Eagle for $1.6 billion.
GetGo operates approximately 270 convenience retail and fueling locations across Pennsylvania, Ohio, West Virginia, Maryland and Indiana. The deal is expected to close in 2025.
- 7-Eleven is No. 1 on CSP’s 2024 Top 202 ranking of U.S. c-store chains by store count. Alimentation Couche-Tard is No. 2. GetGo is No. 29.
“We just announced a definitive agreement to acquire GetGo Café + Market from supermarket retailer Giant Eagle Inc.,” Hannasch said in a Wednesday earnings report. “GetGo is an innovative, food-first convenience-store experience that operates approximately 270 convenience retail and fueling locations across Indiana, Maryland, Ohio, Pennsylvania and West Virginia. We are looking forward to bringing GetGo team members into the family and learning more about its popular made-to-order food and loyalty programs. With our strong balance sheet and customary financial discipline, we are optimistic about future deals at the right price and fit.”
Earnings Recap
Net earnings were $790.8 million for the first quarter of fiscal 2025, compared with $834.1 million for the same quarter a year ago, Couche-Tard reported.
The decrease is primarily driven by softness in traffic and fuel demand as low-income consumers remain impacted by challenging economic conditions, as well as by lower road transportation fuel gross margin in the United States.
"As weakness in consumer behavior persists, we are keeping our focus on our long-term strategy and bringing everyday value to our customers,” Hannasch said. “The No. 1 reason customers visit our locations is to quench their thirsts, and our summer beverage campaigns have been providing exceptional value and exciting exclusive flavors. We are also bringing personalized offers and savings to our most valuable customers through our growing loyalty membership programs. On the fuel side, while volumes have been impacted by customers watching their spend, we continued to have healthy margins. Overall, we remain confident in the advantages of our globally diversified business to successfully navigate these near-term headwinds.”
Other highlights from Couche-Tard’s earnings for the first quarter ending July 21 included:
- Total merchandise and service revenues were $4.5 billion, an increase of 5.1% from the same quarter a year ago.
- Same-store merchandise revenues decreased by 1.1% in the United States.
- Same-store road transportation fuel volumes decreased by 0.8% in the United States.
- Road transportation fuel gross margin was 48.13 cents per gallon in the United Sates, a decrease of 1.92 cents per gallon.
- In first-quarter of fiscal 2025, Couche-Tard also completed the construction of 14 stores and the relocation or reconstruction of two stores. As of July 21, another 61 stores were under construction and should open in the upcoming quarters, the company said.
Laval, Quebec-based Couche-Tard operates in 29 countries and territories, with more than 16,700 convenience stores. Its network includes more than 7,100 c-stores in the United States, primarily under the Circle K banner.
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