Alimentation Couche-Tard, based in Laval, Quebec, reported Tuesday that its profits more than doubled to $91.1 million USD during the first quarter, despite a 15% drop in sales, mainly caused by lower fuel prices, The Canadian Press reported.
The company, which operates stores under the Couche-Tard, Mac’s, Circle K and On The Run banners in Canada and the U.S., earned 48 cents per share for the period ended July 19 compared to 24 cents a year earlier when earnings totaled $47.2 million. The results beat analyst forecasts of 32 cents per share.
Total revenues decreased to $3.7 billion, from $4.3 billion, impacted by lower fuel revenues.
Couche-Tard told The Canadian Press it benefited from strong management of operating expenses, acquisitions, increased same-store merchandise revenues, higher fuel volumes and lower electronic payment expenses. The positive items offset a weakening Canadian dollar.
“Our teams managed to find concrete and effective solutions to overcome pitfalls we are facing, namely the recession, the important and repetitive tax increases on tobacco products as well as the numerous minimum wage increases,” said CEO Alain Bouchard.
Despite the positive quarterly results, he said economic conditions remain difficult and the recession is not yet over.
The company’s network of company-owned and affiliated stores grew 8.5% to 5,906 stores, following the addition of 488 Exxon Mobil On the Run locations.
Merchandise and service revenues increased by 11.2% in the U.S., but decreased 1.6 % in Canada. Same-store merchandise sales increased by 2.4% in the U.S., mainly because of higher tobacco prices. Although fuel revenues fell by 24.3 % following a dramatic decrease in the U.S., fuel gross profits increased 20.1% to $147.4 million. Total operating income was $133.4 million, compared with $92.1 million in the year-ago period.