Fuel demand slump drags down Couche-Tard's revenue - Metro US

Fuel demand slump drags down Couche-Tard’s revenue

FILE PHOTO: A Couche-Tard convenience store is seen in Montreal

(Reuters) – Canadian convenience store operator Alimentation Couche-Tard Inc fell short of third-quarter revenue estimates, as people staying at home led to a steep decline in demand for fuel that overshadowed gains from selling more wine and snacks.

Fuel sales across the globe have been pressured as people, largely working and shopping from home, avoid venturing out due to fears of catching the novel coronavirus, with overall store traffic also being stressed due to renewed restrictions.

“Fuel volume results were highly variable with areas of renewed lockdowns showing very soft demand, while other areas strengthened,” Chief Executive Officer Brian Hannasch said on Wednesday.

For Couche-Tard, which dispenses fuel at about 10,800 outlets across several countries such as Canada and the United States, revenue from its fuel segment declined 29.7% in the third quarter ended Jan. 31.

The slump dulled merchandise and service segment’s 5.6% jump in revenue from a sustained strong demand for grocery, alcohol and tobacco products during the pandemic.

Total revenue fell 20.8% to $13.16 billion from a year earlier, missing market estimates of $13.74 billion, according to IBES data from Refinitiv.

Net earnings attributable to Couche-Tard shareholders fell to $607.5 million, or 55 cents per share, from $659.9 million, or 59 cents per share, a year earlier.

On an adjusted basis, Couche-Tard earned 56 cents per share, in line with estimates.

Shares of Couche-Tard have declined 5% so far this year, paring all the gains from last year.

(Reporting by Praveen Paramasivam in Bengaluru; Editing by Shinjini Ganguli)

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