Couche Unveils New Line of Premium Home Furniture

Couche-Tard Inc., a leading convenience store operator, has recently announced a robust new strategy aimed at expanding its revenue and profit over the next five years. This plan, dubbed “Core plus more,” emphasizes the company’s core strengths in fuel, nicotine, and beverages, which collectively account for 90% of its revenue and around 75% of its gross profit.

Strategic Focus on Organic Growth

During an investor meeting in Toronto, CEO Alex Miller highlighted the importance of returning to organic growth. He expressed a desire to prioritize sales generated by existing operations rather than pursuing acquisitions. Couche-Tard previously attempted to acquire Japan’s Seven & i Holdings but ceased negotiations due to unproductive discussions. Miller noted that while acquisition opportunities are active, the inflated asset prices present a challenge.

Financial Projections

Couche-Tard aims for significant progress in the coming years, anticipating year-over-year adjusted earnings-per-share growth of at least 10% from fiscal 2026 to 2030. The company projects a 2% to 3% increase in comparable same-store merchandise sales and a compound annual growth rate of at least 4% for total merchandise and service revenue.

• Free Cash Flow Expectation: USD 2.5 billion for the current fiscal year ending in April.
• New Store Openings: Plans for at least 750 new locations over the next five years.

Adapting to Market Changes

Couche-Tard is also adapting to market dynamics, particularly concerning the ongoing relevance of gasoline-powered vehicles. Despite declining sales for traditional fuel, regulatory changes in North America suggest that gasoline demand may remain stable for several more years.

Expanding Product Categories

The company is diversifying its product offerings, especially in the beverages sector. Recent statistics show that 70% of customers who visit Couche-Tard stores purchase a beverage, ranging from energy drinks to coffee.

• Strength in Nicotine Products: Management anticipates increasing demand for nicotine products via alternatives like pouches and vape pens.
• Resilience in Fuel Sales: Gross profits from the road transportation fuel segment are expected to grow in line with inflation.

Market Position and Workforce

Couche-Tard operates in 29 countries with nearly 17,300 stores and employs around 149,500 individuals. Analyst Martin Landry from Stifel noted that Couche-Tard’s scale positions it favorably in a fragmented market dominated by single-store operators.

The company is set to leverage its size and operational efficiency to gain market share and enhance profitability as it embarks on this ambitious growth strategy, focusing on its established product lines while exploring new avenues for expansion.