CEO Alain Bouchard starts the call speaking generally of the company's stand on acquisitions, and reminds listeners of the company's "disciplined approach." And then, inevitably at the end of the call, an analyst question will come in asking for more detail on where the company is on acquisitions.
The company's most recent earnings call this past Thursday, reporting third quarter fiscal 2011 [image-nocss] results, proved no different, and neither did Bouchard's answer.
"As always, we are looking at several acquisition opportunities that may prove to be interesting," he said. "We definitely don't want to favor store-count growth to the detriment of profitability."
The company had acquired nine stores through seven transactions in the third quarter. Additionally, the company had built 10 new stores. All told, the company has added 66 sites since the beginning of its 2011 fiscal year.
Meanwhile, the company had divested 71 corporate stores of which, Bouchard said, "their bottom line didn't meet the company's objectives, so we decided to let them go." He added that many of those stores had been recently acquired.
Moving forward, Bouchard had said during a February presentation at the CIBC Retail and Consumer Conference that the company will maintain a pace of acquiring 200 stores a year. And while North America continues to be a focus for Couche-Tard, Bouchard said the company has been looking internationally, as well.
"Lately, the markets have opened up in Europe, where the major-oil companies have started to do what they do here," he said, during the CIBC presentation. "So I think that there are opportunities that we'll bid on eventually."
For a European expansion to occur, Bouchard said the acquisition would have to provide "critical mass" of 200-plus stores and a market with room to grow--similar to the criteria the company applied early on for growth in the United States.
During last week's earnings call, Bouchard said, however, that store-count growth is "only one of the tools" the company has in its toolbox to achieve its "No. 1 goal" of creating value. "However," he added, "our excellent financial health, combined with our ability and reputation to close successful acquisitions make us ready for when the right deal at the right price will knock on our door."
Another of those tools that the company has been working with is improvements in its foodservice offering. Bouchard said the company's goal is to have 25% of total merchandise gross margins come from foodservice, and the company is currently at 16.2%. Five years ago, the company was at less than 10%.
In January, the company brought on Joseph Chiovera, formerly of Dallas-based 7-Eleven, as vice president of foodservice for the United States and Canada. Chiovera had been 7-Eleven's senior fresh foods director since 2008, and had previously worked at Sheetz and ExxonMobil On the Run.
"We have already covered his annual cost with the gain we have been making on some supply-chain improvements," Bouchard said of the hiring, "so that's a good start there."
Couche-Tard, based in Laval, Quebec, operates a network of 5,874 c-stores. The stores are operated by 12 business units, including nine in the United States covering 42 states and the District of Columbia, and three in Canada covering all 10 provinces.
For more on Couche-Tard after the Casey's effort, look for the coming April issue of CSP Magazine.
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