* Q1 EPS 69 cents vs 48 cents
* Analysts forecast EPS 56 cents
* Canada same-store merch. sales up 6.6pct, U.S. up 4.4pct
* Acquires 10 U.S. stores, deal closes September
* Shares close up 8.2 pct at C$22.69
(Adds comments from conference call, analyst, updates stock
price. In U.S. dollars unless noted)
By Solarina Ho
TORONTO, Aug 24 Alimentation Couche-Tard Inc
(ATDb.TO), Canada's largest convenience store chain, posted a
42.2 percent rise in quarterly profit on Tuesday and said it is
acquiring 10 stores from U.S.-based Compac Food Stores Inc.
Couche-Tard stock, which was halted pending the news, rose
nearly 12 percent once trading resumed.
Couche-Tard, which has been pursuing U.S.-based Casey's
General Stores Inc (CASY.O) in a $1.9 billion hostile takeover
battle, said higher merchandise and service sales, strong
gasoline margins and good cost control all contributed to the
rise in profit.
"What I think was really impressive this quarter was the
strong merchandise performance in both Canada and the U.S.,"
said Canaccord Genuity analyst Derek Dley.
Merchandise sales at stores open at least one year, or
same-store sales, were up 6.6 percent in Canada and were 4.4
percent higher in the United States.
For its first quarter, ended July 18, the company said net
income rose to $129.5 million, or 69 cents a share, from $91.1
million, or 48 cents a share, a year earlier.
Analysts had, on average, expected earnings of 56 cents a
share, according to on Thomson Reuters I/B/E/S.
Revenue at Montreal-based Couche-Tard climbed 16.3 percent
to $4.3 billion from $3.7 billion.
Its merchandise and service gross margin was 35.1 percent
in Canada and 32.9 percent in the United States.
"Our first-quarter financial results marked a fantastic way
to begin the new fiscal year and really gave us something to
build on," Chief Executive Alain Bouchard said during a
conference call with analysts.
Couche-Tard, which often announces small acquisitions
during its quarterly results, said the deal for the
company-operated Compac stores, located in Alabama and Florida,
was made on June 24 and was expected to close in September. The
price was not disclosed.
Six other stores were acquired during the quarter in
"It's part of their strategy. It's not going to really move
the needle for Couche-Tard," said Dley, noting: "Adding stores
a little bit at a time -- eventually it adds up."
"Tone of commentary was muted relative to prior quarter,"
RBC Capital Markets analyst Irene Nattel wrote in a research
note, and raised her price target for Couche-Tard to C$25 from
Couche-Tard operates more than 5,800 stores in Canada and
the United States under banners including Mac's and Circle K.
It is North America's largest independent convenience store
operator in terms of company-operated stores.
CEO Bouchard addressed the company's bid for Casey's by
stating that it would continue to evaluate options and make
decisions based on the actions of Casey's board and its
Couche-Tard has fielded candidates for all eight positions
on Casey's board, a move the U.S. company has urged its
shareholders to reject at its annual meeting on Sept. 23.
Casey's, which has 1,500-plus convenience store in the U.S.
Midwest has been fighting off what it calls Couche-Tard's
"lowball offer" since early April.
"Whether or not we are able to make a deal with Casey's, we
expect to be making additions to the network in the coming
months," Bouchard said during the call.
Couche-Tard shares finished C$1.71 higher, or 8.2 percent,
at C$22.69 on the Toronto Stock Exchange after climbing as high
as C$23.44, a 52-week high and a gain of 11.7 percent.
(Reporting by Solarina Ho; editing by Rob Wilson)