Profits Fall at Couche-Tard

Alimentation Couche-Tard Inc., Convenience Store Decisions’ 2007 Convenience Store Chain of the Year, reported a 32% drop in quarterly profit, primarily the result of a sluggish U.S. economy. The company also announced Richard Fortin was stepping down as chief financial officer, effective immediately, but will become chairman of the board on Oct 12.

Raymond Pare, currently the vice president of corporate finance and treasurer, will become CFO. Alain Bouchard, currently acting as the company’s chairman, will continue as president and CEO.

Couche-Tard, the second-biggest convenience store operator in North America, reported net earnings were $47.2 million in the first quarter, ended July 20, down from $69.1 million a year earlier, according to Reuters. The Laval, Quebec-based company said quarterly results were also hampered by a non-recurring income tax expense of $8.3 million related to a corporate reorganization.

Couche-Tard, which operates under the Circle K banner in the U.S. and Mac’s in Canada, said revenue rose to $4.3 billion from $3.6 billion, helped by an increase in retail gasoline and diesel prices, and major acquisitions. However, fuel margins in the U.S. fell to 15.55 cents a gallon from 16.73 cents, the company said.

Record-breaking motor fuel prices hurt the company’s volumes and margins as customers were more careful with their spending. "This is the first time we have faced such difficult economic conditions since our entry in the U.S. market," Bouchard said.

Total merchandise and service gross margin was 33.4 percent. U.S. same-store sales were flat, and down 0.7 percent in Canada, Reuters reported.

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