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By Ahmed Farhatha
March 14 Convenience store operator Alimentation
Couche Tard Inc reported a smaller-than-expected
quarterly profit on Tuesday, as a jump in crude oil prices
gutted margins at the company's motor fuel retail business.
Couche Tard, one of Canada's most acquisitive companies, has
been expanding through deals in Europe, Canada and the United
States, but higher crude prices this year have weighed on profit
After a more than two-year rout, crude has more than doubled
this year from a multi-year low of $27.10 per barrel it hit in
The recovery has limited Couche Tard's ability to sell its
motor fuel products at a higher margin, squeezing profits.
In the company's U.S. retail business, fuel gross margin
fell 7.9 percent to 18.33 cents per gallon in the third quarter
ended Jan. 29. Fuel gross margin at its Europe business declined
Revenue from the fuel retail business however jumped 27
percent to $7.97 billion, making up nearly 70 percent of total
The owner of the Circle K chain of convenience stores said
total revenue rose 22.3 percent to $11.42 billion in the
quarter, boosted mainly by acquisitions.
The company bought 278 fuel retail stations from Imperial
Oil last year for $1.29 billion.
In August, Couche Tard struck its biggest deal to date - a
$4.4 billion deal to buy U.S. retailer CST Brands Inc -
which is expected to close later this year.
The Laval, Quebec-based company said net income rose to $287
million or 50 cents per share in the third quarter, from $274
million or 48 cents per share, a year earlier.
Excluding one-time items, the company earned 53 cents per
share, falling short of analysts' average expectation of 66
cents, according to Thomson Reuters I/B/E/S.
Couche Tard's shares were down 5.2 percent at C$58.57 in
midday trading on the Toronto Stock Exchange.
(Reporting by Ahmed Farhatha in Bengaluru; Editing by Sai