Newspaper article The Canadian Press

Couche-Tard Shares Hit High on Dividend Hike and Strong Q2 Results

Newspaper article The Canadian Press

Couche-Tard Shares Hit High on Dividend Hike and Strong Q2 Results

Article excerpt

Couche-Tard shares hit new high

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MONTREAL - Alimentation Couche-Tard's shares hit an all-time high Tuesday after the convenience store giant reported a surge in quarterly net income amid improving consumer confidence in some U.S. states and coupled that with a decision to boost its dividend 14 per cent.

The Quebec-based company said its quarterly dividend will increase to 10 cents per share, up from 8.75 cents, payable Dec. 19 to shareholders on record as at Dec. 5.

Following the announcement, Couche-Tard's shares soared more than $4 to set a new benchmark of C$78 before falling back to close up $2.19, or nearly three per cent, at $76.17 in trading on the Toronto Stock Exchange.

Couche-Tard, which reports in U.S. dollars, announced before markets opened that its net profit increased 27 per cent to US$229.8 million. That translated into $1.21 per share for the second-quarter ended Oct. 13, up from 97 cents per share or $181.3 million a year earlier.

Adjusting for currency fluctuations and other items, Couche-Tard (TSX:ATD.B) earned $249 million or $1.32 per share, up $171 million or 91 cents per share from a year earlier.

Revenue decreased three per cent to $9 billion on lower fuel prices, currency translations, the sale of its Liquid Petroleum Gas business last year and fewer days of operations by Statoil Fuel & Retail in this year's results.

Still, same-store merchandise and fuel sales -- a key retail measure -- increased in North America and Europe.

Same-store merchandise revenues were up 3.2 per cent in Canada, 4.5 per cent in the U.S., and 1.9 per cent in Europe as merchandise gross margins exceeded 30 per cent in each area. Same-store fuel volumes increased 1.5 per cent in Canada, 1.7 per cent in the U.S. and 2.2 per cent in Europe.

Couche-Tard was expected to earn $1.22 per share in adjusted profits on $9.33 billion of revenues, according to analysts polled by Thomson Reuters.

"I'm happy of what we accomplished this quarter in terms of organic growth in both North America and in Europe," CEO Alain Bouchard said during a conference call.

He said merchandise revenues and fuel volumes were helped by the contribution of recent acquisitions and pricing strategies adopted in the first quarter to drive in-store traffic. …

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