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Alimentation Couche-Tard Inc. (TSX: ATD.B), one of the largest chains of convenience stores in Canada, has agreed to sell 49 sites to Casey's General Stores Inc. The deal is worth US$ 39 million and the amount will be paid in all-cash. The sold properties comprise 46 leased and three that were owned by Couche-Tard.
Meanwhile, in another decision, the company is in talks with a real estate advisory firm to sell 306 stores across North America, which means the company is looking to sell 355 properties in total. Of the 306 properties, 184 are leased and 122 are free-owned. The company's CEO Brian Hannasch has reportedly said that this decision comes amidst the company's bid to optimize its network. The sites that have been sold and are for sale no longer fit in Couche-Tard's strategic objectives.
The COVID-19 pandemic hit the company's prospects and continues to have a negative impact. Couche-Tard runs stores that sell general items and some sell fuel, so the forced pandemic restrictions took a toll on the sales and thus affecting its overall earnings.
Why This Move?
- Recently, the retail giant released its financial results and revealed that the company achieved revenue of US$ 13.2 billion in Q3 2021, down by around 21 per cent with the corresponding quarter of 2020.
- The merchandise and service gross margin decreased by 0.7 per cent in Canada, 1 per cent in the US and 3.8 per cent in Europe in Q3 2021.
- The net earnings attributable to shareholders were at US$ 607.5 million in Q3 2021, down from US$ 659.9 million for Q3 2020.
- The stock of the company did well between August-December 2020 and ever since then, it has declined. The stocks declined by 8.8 per cent year-to-date (YTD).
Following the announcement, Alimentation Couche-Tard stocks slipped by ~1 per cent and were trading at C$39.3 at 10:57 AM ET on Monday.
The scrips post one-year return of 16+ per cent but are down over 9 per cent year-to-date.
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