The owner of Mac's, Couche-Tard and Circle K convenience stores says U.S. operations remained on a roll in its fiscal first quarter as lower fuel prices drove higher gasoline volumes and merchandise sales.
Alimentation Couche-Tard said same-store U.S. fuel sales surged 9.4 per cent, marking the highest growth in almost a decade. Growth in merchandise sales for stores open at least a year remained above 5 per cent for the second consecutive quarter, the best performance in about seven years.
The results included the contribution from the Pantry, acquired last March.
Same-store sales in Canada and Europe lagged considerably.
Overall revenues decreased 2.2 per cent to $8.98-billion (U.S.) from $9.19-billion, due in part to the negative impact from the translation of Canadian and European sales into U.S. dollars. The decrease also reflected the sale of its European aviation-fuel business.
While lower fuel prices drove traffic, the $1.3-billion currency impact offset the benefit from acquisitions and growth in existing stores.
Still, the Quebec-based company beat analyst expectations as net income was up almost 13 per cent to $304-million from a year earlier despite lower fuel margins.
"We believe our results compare very favourably to the results of our competition in the majority of our markets," chief executive Brian Hannasch said in a news release.
Couche-Tard earned 53 cents per diluted share for the 12 weeks ended July 19. That compared with 47 cents a share or $269.5-million (U.S.) in the comparable prior year period.
IT benefited from a $6.8-million currency gain in the quarter, compared with an $8.7-million loss and $500,000 goodwill impairment last year.
Excluding these fluctuations, Couche-Tard earned $299 million or 53 cents per diluted share in adjusted profits, up from $276 million or 48 cents a share in the first quarter of fiscal 2015.
Couche-Tard was expected to earn 46 cents a share in adjusted profits on $8.81-billion of revenue, according to analysts polled by Thomson Reuters.
The company attributed the improved results to the acquisition of the Pantry chain in the United States, strong merchandise and fuel volume growth in its existing network and cost controls. That was partially offset by lower fuel margins in the United States and the negative impact on revenues from a weaker loonie and European currencies.