Couche-Tard profit up on strong margins, revenue
TORONTO (Reuters) - Alimentation Couche-Tard Inc, Canada's biggest independent convenience store operator, posted a higher quarterly profit on Thursday, beating market estimates, helped by strong margins and in-store sales.
The news pushed its shares higher despite a 2 percent drop in the broader market.
Merchandise sales at its stores open for more than a year, a key measure for retailers, were up 3.9 percent in the United States and ahead 0.4 percent in Canada.
Couche-Tard, which competes with Seven-Eleven, owned by Japan's Seven & I Holdings, and Pantry Inc in the United States, has been taking market share as smaller independent stores are struggling to stay afloat.
"The company continues to roll out and increase its food services and fresh food offerings," Canaccord Genuity analyst Derek Dley said, noting food was the highest margin portion of in-store sales.
"We're going to see margins continue to improve as they leverage their food service capabilities."
Dley expects Couche-Tard, whose $2 billion bid for U.S. rival Casey's General Stores collapsed last year, to make small-scale acquisitions.
Earnings for the third quarter ended January 30 rose to $71 million, or 38 cents a share, from $54.8 million, or 29 cents a share, a year earlier.
Analysts, on average, had forecast earnings of 37 cents a share, according to Thomson Reuters I/B/E/S. Continued...