Convenience stores operator Alimentation Couche-Tard Inc. (ATD_A.TO,ATD_B.TO) Tuesday said its third-quarter profit increased 25 percent from last year, driven mainly by store acquisitions, expense management and higher sales.
Merchandise and services revenues grew 4.6 percent for the quarter, of which a major portion was contributed by acquisition. Same-store merchandise revenues increased by 3.4 percent in the US and 3.1 percent in Canada. Chief Executive Alain Bouchard said promotions and improvement in fresh food offering improved same-store sales growth. Investors consider same-store sales a key metric of retail performance, and it excludes the impact of store closings and openings.
Motor fuel sales for the quarter advanced 28 percent, riding on higher prices and acquisitions. Same-store motor fuel volume in Canada stagnated while US sales grew just 1.1 percent. The company blamed higher retail prices and the recovering economy as reasons which put a pressure on consumption.
Motor fuel gross margin in the US was 14.84 cents per gallon compared to 13.12 cents last year, while in Canada motor fuel margin dropped to 5.19 Canadian cents per litre from 5.66 Canadian cents last year.
During the quarter, Couche-Tard acquired 26 stores from Chico Enterprises, 27 stores from Supervalu, 33 stores from ExxonMobil and 11 stores from Neighbors Stores. Total stores at the end of the quarter were 5,817, compared to 5,715 stores at beginning of the quarter.
Revenues for the quarter grew 20.4 percent to $6.60 billion, driven mainly by increased motor fuel prices and sales volume as well as acquisition of stores.
Couche-Tard's net earnings for the third quarter rose to $86.8 million or $0.48 per share from $69.6 million or $0.37 per share last year.
Analysts polled by Thomson Reuters estimated earnings of C$0.46 per share on revenues of C$6.08 billion for the quarter. Analysts' estimates typically exclude special items.
Financial Chief Raymond Pare said, "The very satisfactory increase of 29.7 percent of diluted net earnings per share reflects the increased contribution of merchandise and services sales, our cost control for several years, proactive management of our balance sheet, redemption of shares and contribution from recent acquisitions."
The company declared a quarterly dividend of C$0.075 per share, payable on April 6 to shareholders as of March 23.
Going forward, the company said for remainder of the year it will pursue its investments with caution in order to improve its network.
On the Toronto Stock Exchange, ATD_A.TO is trading at C$31.91, up 0.95%, while ATD_B.TO is trading at C$31.92, up 1.59%.
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