Alimentation Couche-Tard CEO Brian Hannasch to retire in September

Alimentation Couche-Tard Inc. ATD-T is getting a new chief executive officer for only the second time in its nearly 45-year history, as Brian Hannasch plans to step down from the top job in September.

The Laval, Que.-based convenience-store and gas-station retailer announced on Wednesday that current chief operating officer Alex Miller will take over as CEO on Sept. 6.

The move follows a succession process that the company had been working on for five years, Mr. Hannasch said on a conference call on Wednesday to discuss the company’s latest financial results. Mr. Miller was promoted to COO last year.

Mr. Hannasch, 57, oversaw a series of takeovers that led to a significant expansion of the company. He will remain with Couche-Tard as a special adviser focusing on mergers and acquisitions.

“Recently, I would say in the last couple of months, we’ve seen quite a few deals come across our desk,” Mr. Hannasch said on Wednesday’s call. Those potential deals include both large and “niche” assets in Europe and North America, he added.

“We’re cautiously optimistic that we’re going to find some new growth opportunities in the coming quarters,” he said.

The leadership shuffle was announced the day after Couche-Tard reported that its fourth-quarter earnings fell by 32 per cent, as customers feeling the pain of persistent inflation continue to cut back on spending.

Since Mr. Hannasch was appointed CEO in 2014 – taking over from co-founder Alain Bouchard, who remains executive chair of the board – Couche-Tard has acquired nearly 7,800 stores, and now operates more than 16,700 locations across 31 countries.

Those acquisitions include a US$4.4-billion deal for Texas-based CST Brands Inc. in 2017, and a €3.1-billion ($4.53-billion) deal this year to acquire roughly 2,200 European service stations from French oil giant TotalEnergies SE.

The path to expansion has not always been smooth. In 2021, a US$20-billion equity bid for French grocer Carrefour SA fell apart amid staunch opposition from the government of Emmanuel Macron.

In a statement on Wednesday, Mr. Bouchard praised the “stunning growth” at the company under Mr. Hannasch’s leadership.

Last fall, Couche-Tard unveiled an ambitious new five-year strategy to boost earnings before interest, taxes, depreciation and amortization (EBITDA) by more than 70 per cent, to US$10-billion by fiscal 2028. Executives plan to accomplish this through further acquisitions, growth at existing stores, and cutting costs.

On the call, Desjardins Securities analyst Christopher Li noted that Mr. Hannasch’s retirement came earlier than some had expected, particularly in light of the recent launch of the new five-year plan, and asked why this was the right time for the transition.

“I’ve got a lot of miles on me,” Mr. Hannasch, 57, replied, adding that he had always intended to retire between age 58 and 60. He noted the timing was also “a little bit elegant” after 35 years in the industry, 25 of them with Couche-Tard. “The company is in a great place and its best days are ahead of it. So this feels like the right time to explore something else,” he said.

As it did with Mr. Hannasch, Couche-Tard looked within its own ranks for the next CEO. Mr. Miller has held a number of positions at the company, including executive vice-president of its North American operations. Before joining Couche-Tard in 2012, he worked at BP PLC for 16 years in both the United States and Europe.

“It’s a very logical transition, because it’s somebody that has both significant experience within the company, but also significant experience elsewhere,” said Louis Hébert, a professor at Montreal’s HEC business school. He added that this perspective could be useful for Couche-Tard, but “I will not expect too many radical changes in the strategy of the firm with this choice.”

Mr. Miller said on Wednesday’s call that he believes Couche-Tard “will continue our incredible growth trajectory” in the years to come.

“I firmly believe that we are only at the beginning of our journey to become the world’s preferred destination for convenience and mobility,” he said.

In the quarter ending April 28, net earnings attributable to shareholders declined to $453-million, compared with $670.7-million in the fourth quarter last year.

The company attributed the decline to lower gross margins on fuel, expenses and depreciation related to investments and acquisitions, and a quarter that was a week shorter than the comparable period last year, according to the company.

Inflation-weary customers have also been cutting back: People have been buying smaller amounts of fuel during each visit, Mr. Hannasch noted on Wednesday’s call. Couche-Tard has seen shoppers gravitating to lower-priced product options inside its stores, including the company’s own private-label brands. In Canada, cigarette sales have also been hampered as some customers turn to “illicit channels,” he said.

Same-store merchandise sales — an important metric that tracks sales growth or declines not tied to store openings or closings — fell by 3.4 per cent in Canada, by 2 per cent in Europe, and by 0.5 per cent in the U.S. in the fourth quarter.

“We’re not knee-jerking based on a couple of soft quarters and a weak consumer,” Mr. Hannasch said on Wednesday’s call. “We think that’s transitory, and we’re focused on, again, winning with the customer longer term.”