Couche-Tard Satisfied with Q4 Results, but Remains Cautious

LAVAL, Quebec -- Alimentation Couche-Tard Inc., parent company to the Circle K and Mac's convenience store chains, reported today that its fiscal 2011 fourth-quarter earnings dropped $4.8 million to $64 million, compared to the same period in 2010.

The company's fourth-quarter fiscal 2010 net earnings had benefited from non-recurring items including a gain of $11.4 million, net of taxes, from the disposal of Casey's shares and the reversal of provisions totaling $3.6 million, net of taxes. Excluding these items, net earnings for its 2011 fourth quarter would have been up $10.2 million, or 19.0 percent. When analyzing a company, some investors look only at recurring revenue and profits, as opposed to one-time gains or expenses.

Couche-Tard's fourth quarter, which ended April 24, showed same-store merchandise sales jumped 3.6 percent in the United States, but dipped 2.1 percent in Canada. Same-store motor fuel volume edged higher by 0.3 percent in the United States and 1.8 percent in Canada. U.S. motor fuel gross margin stood at 14.24 cents per gallon for the quarter. That figure is down 0.18 cents compared to the same period last year.

"I am very satisfied with the results for the fourth quarter and fiscal 2011," said Alain Bouchard, president and CEO of Couche-Tard. "However, we remain cautious as [we have] in recent years. The level of unemployment and household income and household indebtedness, as well as rising motor fuel prices are negative factors globally and affect the resources available to consumers in general. Their confidence in the short term seems to be affected, but the medium and long-term perspectives remain positive. It is also noteworthy that adverse weather conditions in several of our markets have been a negative factor as for many other retailers."

Couche-Tard began its fiscal fourth quarter with a total of 5,874 stores. As of April 24, that figure slipped to 5,795 stores, a net loss of 79. To break it down further, Couche-Tard began with 4,403 company-owned stores. The company acquired seven stores and built nine new locations, but closed 18 stores, to finish with 4,401 company-operated stores at the end of the quarter. Much larger changes were seen in affiliated stores. Couche-Tard began the quarter with 1,471 affiliated stores. It acquired no stores and opened 12 new ones. However, Couche-Tard shuttered 89 locations, to finish with 1,394 affiliated stores.