July 15, 2008 / 4:45 PM / 10 years ago

Couche-Tard profit hit by soft U.S. market

TORONTO (Reuters) - Alimentation Couche-Tard Inc (ATDb.TO), North America’s second-biggest convenience store operator, reported a 53.6 percent decline in fourth-quarter profit on Tuesday, hurt in part by lower motor fuel margins in the United States.

The retailer and gas station operator said net earnings were $15.5 million, or 8 cents a share, in the quarter ended April 27, down from $33.4 million, or 16 cents a share, in the same period last year.

Analysts had expected a profit of 13 cents a share before items, according to Reuters Estimates.

Operating under the Circle K banner in the United States and Couche-Tard and Mac’s in Canada, the company said revenue grew 24.7 percent to $3.7 billion.

Higher gasoline prices represented $475.5 million of the $733.2 million sales increase.

Fuel margins in the United States fell to 10.02 cents a gallon from 13.12 cents, due to increases in product costs, Couche-Tard said.

The Laval, Quebec-based company, which has said it faces a difficult economic climate in the United States, said its merchandise margin was 33.7 percent, compared with 33.9 percent in the comparable period last year.

Sales at U.S stores open for at least one year were up 0.1 percent and ahead 2.2 percent in Canada, it said.

“The past quarter was extremely challenging in the United States,” said Alain Bouchard, Couche-Tard’s president and chief executive, citing economic “slack” in its southern divisions and motor fuel margins far below historical averages.

($1=$1 Canadian)

Reporting by Jennifer Kwan and Susan Taylor

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