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MONTREAL -- Expanding its U.S. convenience store network helped Alimentation Couche-Tard Inc. post record first-quarter profits, and the company's chief executive yesterday warned U.S. marketers to prepare for continued expansion within the next two years.

After growing across Canada to become the country's largest convenience store operator north of the border with 1,700 stores, Couch-Tard's top decision-maker, Alain Bouchard, is now seeking to operate 1,000 stores in the United States. Couche-Tard over the past two years has built a network in the U.S. Mid-West that now encompasses 545 stores. And while other stocks have crashed, Couche-Tard has seen its stock nearly triple in value, Reuters reported.
Bouchard is relying on an aggressive acquisition strategy to fuel growth. The company made its first purchase in the United States in May 2001 and completed its latest last month with a $79.5 million acquisition of 287 Dairy Mart stores in Ohio, Kentucky, Pennsylvania, Michigan and Indiana.

"We can now look forward to establish a second growth platform in the U.S. within the next two years," he told analysts.

Couche-Tard profit in the first quarter ended July 21 rose to $12.8 million from$8.9 million in the same period last year. The Dairy Mart stores did not contribute in the quarter, but Bouchard said he expects they will add 1 cent a share to this year's earnings and 4 cents a share the next year.

Sales for the Laval, Quebec-based chain rose to $433.6 million from $328.7 million in the same period last year. Bouchard expects the Dairy Mart stores to add $400 million in sales this year. To reap more profit from its stores, Couche-Tard will continue rolling out its Store 2000 strategy, an upgrade program that includes a store redesign and additions such as precooked meals and fresh food counters.

Nearly a third of the Canadian stores have now been upgraded, and 55 of the U.S. stores. Bouchard said 200 more stores should be revamped in the current fiscal year, and 60 new stores should be built, the report said.

ABOVE: Alain Bouchard, chairman and chief executive of Alimentation Couche-Tard Inc.