Fuel retailer and convenience store operator Parkland Corp. lowered its earnings forecast for the year Thursday due to what it said are” ongoing weaknesses” in consumer demand that could continue through the end of 2024.
The Calgary-headquartered company revised its guidance for adjusted earnings before interest, taxes, depreciation and amortization for the year to $1.9 billion, down from $2 billion.
Part of the lower forecast is due to impacts from the unplanned shutdown of Parkland’s Burnaby, B.C. refinery during the first quarter, the company said.
But chief financial officer Marcel Teunissen told analysts on a conference call Thursday that the overall economic environment has negatively impacted the company’s sales.
In Canada, the company’s food and convenience store gross profit decreased two per cent year-over-year, while its fuel volumes declined four per cent.
In the U.S., Parkland’s fuel volumes were down 13 per cent year-over-year, though its food and convenience store gross profit increased.
“Retail consumers are feeling stretched, with overall discretionary spending down,” Teunissen said.
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Teunissen added retail fuel volume demand was weaker particularly in June as the start of the driving season was slowed by cool weather.
In B.C., where the price of gasoline was the highest in Canada, Parkland saw its largest fuel sale volume declines.
In total, the company said it earned $70 million in the second quarter, down from $78 million a year earlier.
Its sales and operating revenue was $7.5 billion, down from $7.8 billion during the same quarter in 2023.
Diluted earnings per share were 39 cents, down from 43 cents last year.
A bright spot on the horizon for Parkland is the Ontario government’s move to expand beer, wine and other ready-to-drink alcoholic beverage sales to convenience stores.
“Our retailing partners are very excited about this opportunity,” said CEO Bob Espey.
“We do see the rollout of beer and wine in Ontario as a great opportunity for Parkland that should really start to drive some good same-store sales growth,” he said, adding the company has identified up to 120 convenience store locations in that province where it could sell alcohol.
“We expect this will become a top category for us and help bring more consumers into our stores where we can cross-promote other items,” Teunissen added.