UPDATE 2-Couche Tard's profit misses as oil recovery weighs on margins
Pubdate：2017-03-15 10:50
Source：liyanping
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By Ahmed Farhatha
March 14 (Reuters) - Convenience store operator Alimentation Couche Tard Inc (ATDb.TO) 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 margins.
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 January 2016.
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 13.6 percent.
Revenue from the fuel retail business however jumped 27 percent to $7.97 billion, making up nearly 70 percent of total revenue.
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 (IMO.TO) 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 (CST.N) - 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.
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