LAVAL, Quebec -- Alimentation Couche-Tard Inc., North America's third-biggest convenience-store operator, said fourth-quarter profit fell 1.2% as income tax more than doubled and the company earned less on U.S. gasoline sales, said Bloomberg News.
Net income in the period ended April 30 fell to $32.1 million, or 15 cents a share, from $32.5 million, or 16 cents, a year ago, Laval, Quebec-based Couche-Tard said. Sales rose 35% to $2.64 billion from $1.96 billion.
Tax costs rose $9.4 million to $16.6 million because of a change [image-nocss] to Quebec law that will boost taxes for some corporations based in the province. That also will cut first-quarter earnings by $9.8 million, Couche-Tard said.
That's less than what investors expected, Blackmont Capital analyst David Hartley said. People were concerned that there was going to be a significant hit to earnings, and this hasn't happened, he told Bloomberg. There is absolutely nothing broken with the story. The company is doing everything it should be in growing its business. They are delivering, pure and simple.
U.S. gas margins dropped as more customers used credit or electronic debit cards at the pumps, increasing Couche-Tard's fees owed to banks and credit-card companies. U.S. gas sales now account for about half Couche-Tard's revenue after its 2003 purchase of about 1,600 Circle K stores and gas stations.
After fuel costs were subtracted, the company earned 10.96 cents a gallon on gasoline in the United States, down from 11.26 cents a year earlier. Gasoline sold in the United States for an average of $2.48 a gallon in the quarter, 20% more than a year earlier, Couche-Tard said.
Costs from an increase in electronic payments chopped $4 million from profit, Couche-Tard said. Penalties for the termination of two contracts governing the use of ATMs at some U.S. stores trimmed another $3.3 million.
Couche-Tard also announced plans to spend about $300 million on property and equipment as the company opens stores and renovates others to add fast food and feature prepared meals more prominently.
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