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Alimentation Couche-Tard misses quarterly revenue estimates on lower fuel demand

Alimentation Couche-Tard misses quarterly revenue estimates on lower fuel demand

Alimentation Couche-Tard, a Canadian retailer, missed its third-quarter revenue estimate on Tuesday due to a sluggish fuel and convenience store business amid increasing inflationary pressures.

Circle-K's owner Couche-Tard is growing increasingly concerned as consumers facing financial stress are cutting back on both expensive and non-essential items.

Walmart and Target, two of the largest U.S. retailers, warned that a slowdown in demand was due to a slowed down spending. They were also preparing for the effects of import tariffs implemented and proposed by President Donald Trump.

The increasing consumer prices and interest rates has led to low-to-middle-income consumers being reluctant to make travel plans. This leads to a decrease in fuel consumption which further presses demand for companies like Couche-Tard.

In the United States its same-store fuel transportation volumes dropped 3%, due to unusual winter weather and reduced traffic. The drop was 0.8% in the previous year.

The Canadian company's quarterly revenue increased 6.5% from a previous year to $20.90 Billion. This is despite the fact that it has been unwavering in its commitment to purchase Japan's Seven & i Holdings. According to data compiled and analyzed by LSEG, analysts had predicted a quarter-over-quarter revenue increase of 8%.

The company's adjusted net income for the quarter ending February 2, which was $641 million, beat expectations of $622.3 millions, mainly due to higher gross margins on road transportation fuels and contributions from acquisitions.

The adjusted quarterly profit per share of 68 cents was in line estimates.

The Quebec-based firm, which has been trying since August to acquire 7-Eleven owner's company, announced earlier this month that they could

sweeten its $47 billion bid

If the Japanese company cooperates. Couche-Tard said that it was confident of overcoming the antitrust concerns.

If the two major players in the U.S. market for convenience stores were to reach an agreement, it would create a global company with around 20,000 locations. This could be the largest foreign acquisition in Japanese history. (Reporting and editing by Pooja Deai in Bengaluru, Anuja Mistry from Bengaluru)

(source: Reuters)