July 12, 2011 / 3:49 PM / in 7 years

UPDATE 2-Couche-Tard profit falls, but beats estimates

* Adjusted profit up $0.05/shr, revenue $4.8 bln

* Same-store merchandise sales up in U.S., down in Canada

* Shares rise 3.4 percent, hit record high (Adds details, analyst comment; in U.S. dollars unless noted)

TORONTO, July 12 (Reuters) - Alimentation Couche-Tard Inc (ATDb.TO), Canada’s biggest independent convenience store operator, posted a lower quarterly profit on Tuesday but topped market estimates on growth of merchandise sales in the United States and on a stronger Canadian dollar.

Shares of the company, which beat earnings estimates for at least the fifth straight quarter, rose 3.4 percent.

“It was another impressive quarter. They continue to do what they’re known for, which is to execute on their merchandise strategy,” Canaccord Genuity analyst Derek Dley said,

“What’s driving the merchandise sales is increased market share and the margins are driven by a greater focus on fresh food and food service,” he said.

Couche-Tard has been offering more food items at its stores because of their high margins.

The company, which competes with Seven-Eleven, owned by Japan’s Seven & I Holdings (3382.T), and Pantry Inc PTRY.O, is gaining market share in both the United States and Canada, Dley said. It has particularly stolen share from smaller independent stores.

Couche-Tard, whose $2 billion bid for U.S. rival Casey’s General Stores (CASY.O) collapsed last year, is seen making small acquisitions due to a scarcity of larger targets.

Merchandise sales at stores open for at least a year, or same-store sales, a key measure for retailers, rose 3.6 percent in the United States but fell 2.1 percent in Canada. The company also sells motor fuels at its gas bar locations.

Earnings for the fourth quarter ended April 24 fell to $64 million, or 34 cents a share, from $68.8 million, or 37 cents a share, a year earlier.

The company recorded a one-time gain in the year-before period. Excluding special items, its profit climbed 5 cents on a per-share basis. Revenue was $4.8 billion.

Analysts on average had forecast earnings of 30 cents a share on revenue of $4.71 billion, according to Thomson Reuters I/B/E/S.

Couche-Tard shares were up 3.4 percent at C$29.05 in Toronto, having hit a record high of C$29.85 earlier in the session. (Reporting by S. John Tilak; editing by Peter Galloway)

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