Reuters: Global Markets: Couche-Tard profit jumps on sales, shares rise

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Couche-Tard profit jumps on sales, shares rise Jul 10th 2012, 17:17 Tue Jul 10, 2012 1:17pm EDT (Reuters) - Canadian convenience store operator Alimentation Couche-Tard Inc (ATDb.TO) reported a sharp increase in quarterly earnings on Tuesday, sending its shares higher, with the results helped by strong sales, minor acquisitions and a robust motor fuel business. Couche-Tard operates about 5,800 convenience stores across North America, the majority of which sell fuel. Its banners include Couche-Tard, Mac's and Circle K. Fuel volume sold jumped 25.5 percent in the United States and 14.0 percent in Canada in the company's fiscal fourth quarter, ended April 29, largely due to the impact of acquisitions. At existing locations, volume was roughly flat. Gross profit margin on fuel rose in both Canada and the United States. There were 13 weeks in the quarter, which also helped results. After the end of the quarter, in June, Couche-Tard entered Europe, acquiring Norway's Statoil Fuel & Retail in a $2.6 billion deal. Statoil has about 2,300 outlets, mainly in Scandinavia, but also in Poland, the Baltics and Russia. The company said it would start contributing to earnings immediately. "It is clear that the transaction has contributed to increase our indebtedness level," Chief Financial Officer Raymond Paré said in a release, adding that Couche-Tard is still in a strong position given its diversification and cash flow. "During fiscal 2013 and subsequent years, we will favor a rapid reduction of our indebtedness level." SAME-STORE SALES RISE Merchandise sales also boosted Couche-Tard's earnings, as sales at established stores rose 5.4 percent in Canada, and 3.4 percent in the United States. Excluding tobacco, hurt by one cigarette manufacturer's new supply terms and price structure, U.S. same-store sales rose 6.1 percent. Gross profit margin for merchandise edged lower, hit by more aggressive promotions and product cost increases that the company chose not to pass on to customers. "In terms of absolute dollars, the increase in same-store merchandise sales more than offset the decrease in margin percentage of these products, demonstrating that Couche-Tard's strategies paid off," the company said in the release. Net earnings for the fourth quarter rose to $117.8 million, or 65 cents a share, from $64.5 million, or 35 cents, a year earlier. Excluding items, earnings rose to $102.4 million, or 57 cents a share. Revenue rose 28.0 percent to $6.1 billion. Shares of Couche-Tard were 3.8 percent higher at C$45.92 on the Toronto Stock Exchange on Tuesday afternoon. (Reporting By Allison Martell; Editing by Peter Galloway) Link this Share this Digg this Email Reprints

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