Canadian retailer Alimentation Couche-Tard missed third-quarter revenue estimates on Tuesday, hurt by sluggish demand in its convenience stores and fuel businesses amid rising inflationary pressures.
Consumers facing financial strain have increasingly scaled back on expensive as well as non-essential purchases, prompting growing concern among retailers including Circle-K owner Couche-Tard.
U.S. retail giants such as Walmart and Target warned of a demand slowdown owing to muted spending as they braced for the impact from import tariffs proposed and implemented by President Donald Trump.
Increasing consumer prices and higher interest rates have resulted in low-to-middle income consumers being hesitant about making travel plans, leading to a reduction in fuel consumption, further pressuring demand at companies such as Couche-Tard.
Its same-store road transportation fuel volumes fell 3 per cent in the United States, impacted by unusual winter conditions and lower traffic. It had dipped 0.8 per cent a year ago.
The Canadian company, which has shown an unwavering commitment to buy Japan’s Seven & i Holdings, saw its quarterly revenue rise 6.5 per cent to $20.90 billion from a year ago. Analysts had estimated a quarterly revenue rise of 8 per cent to $21.19 billion, according to data compiled by LSEG.
However, its adjusted net income of $641 million for the quarter ended February 2 beat estimates of $622.3 million, driven by higher road transportation fuel gross margins as well as contributions from acquisitions.
On an adjusted basis, its quarterly profit of 68 cents per share was in line with estimates.
The Quebec-based company, which has been trying to acquire 7-Eleven’s owner since making its initial offer in August, said earlier this month that it could sweeten its $47 billion bid if the Japanese firm cooperates. Couche-Tard also said it remained confident about overcoming antitrust concerns.
A successful deal between these two leading players in the U.S. convenience store market would create a global giant with about 20,000 locations, potentially making it the biggest foreign buyout in Japanese history.
