Couche-Tard beats forecasts as profit increases

Company cites strong merchandise and fuel volume growth as reasons for improved results

The owner of Mac's, Couche-Tard and Circle K convenience stores beat analyst expectations in its first quarter, with net income up almost 13 per cent to US$304 million from a year earlier on higher fuel and merchandise sales.

Alimentation Couche-Tard says it earned 53 cents per diluted share for the 12 weeks ended July 19. That compared with 47 cents per share or US$269.5 million in the prior year.

The Quebec-based company benefited from a US$6.8 million currency gain in the quarter, compared to an US$8.7 million loss and US$500,000 goodwill impairment last year.

Excluding these fluctuations, Couche-Tard earned US$299 million or 53 cents per diluted share in adjusted profits, up from US$276 million or 48 cents per share in the first quarter of fiscal 2015.

Revenues decreased 2.2 per cent to US$8.98 billion from US$9.19 billion.

Couche-Tard was expected to earn 46 cents per share in adjusted profits on US$8.81 billion of revenues, according to analysts polled by Thomson Reuters.

The company attributed the improved results to the acquisition of The Pantry chain in the United States, strong merchandise and fuel volume growth in its existing network, and cost controls. That was partially offset by lower fuel margins in the United States and the negative impact on revenues from a weaker loonie and European currencies.

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