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Couche-Tard shares hit high as profit climbs, dividend hiked

File photo of a man passing a Couche-Tard convenience store in Montreal.

Graham Hughes/The Canadian Press

Convenience store giant Alimentation Couche-Tard Inc. posted a 26.8-per-cent increase in second-quarter earnings on strong in-store revenue and gas volumes as well as the added results from recent acquisitions.

Laval, Que.-based Couche-Tard also announced on Tuesday a 14-per-cent increase in its quarterly dividend, to 10 cents (U.S.) from 8.75 cents.

The announcement sent Couche-Tard shares to a record high of more than $77 (Canadian) in afternoon trading on the Toronto Stock Exchange.

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Second-quarter profit reached $229.8-million (U.S.) or $1.21 a share, up from $181.3-million or 97 cents in the year-earlier period.

Revenues, however, slipped 3 per cent to $9-billion from $9.3-billion as a result of the sale of the Liquid Petroleum Gas unit, currency translations and a reduced number of operating days in the quarter for Statoil Fuel & Retail of Norway.

On an adjusted basis, profit was $249-million or $1.32 a share compared with $171-million or 91 cents.

Analysts' consensus profit estimate for the second quarter was $1.22.

"The results for the second quarter were very strong and confirmed the trend from the first quarter, especially in Europe where our fuel brand 'miles' and our fresh food initiatives continued to deliver strong results," Couche-Tard president and chief executive officer Alain Bouchard said in a news release.

Same-store merchandise revenue in the second quarter rose 4.5 per cent in the U.S., 1.9 per cent in Europe and 3.2 per cent in Canada.

Same-store fuel volumes rose 1.7 per cent in the U.S., 2.2 per cent in Europe and 1.5 per cent in Canada.

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Couche-Tard reiterated that it is on target to achieve annual synergies from the Statoil acquisition of between $150-million and $200-million before the end of December of 2015.

"They've put in some very strong underlying performances across all three geographies," said Greg Dean, an analyst and portfolio manager with Cambridge Global Asset Management.

"Their operating costs were actually down year over year," he added.

And same-store merchandise revenues in the U.S. were "outstanding" given the still fragile state of the economy, Mr. Dean said.

Couche-Tard operates more than 6,000 stores in North America and over 2,000 outlets in Scandinavia, the Baltics, Poland and Russia.

Banners include Mac's in Canada, Circle K in the U.S. and Statoil in Europe.

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About the Author
Quebec Business Correspondent

Bertrand has been covering Quebec business and finance since 2000. Before joining The Globe and Mail in 2000, he was the Toronto-based national business correspondent for Southam News. He has a B.A. from McGill University and a Bachelor of Applied Arts from Ryerson. More


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