New Cigarette Brand, Foodservice Lift Alimentation Couche-Tard

LAVAL, Quebec -- Alimentation Couche-Tard Inc.'s launch of its own cigarette brand, called Crown, has lifted the company in the past five or six weeks.

"We're very excited with the market share we have taken," said Alain Bouchard, president and CEO of the company, parent to Circle K in the United States. "It's exceeded our yearly target already. We are very, very happy with it."

Expansion is also on the mind of the convenience store operator. Bouchard said during this afternoon's analyst conference call that the company is considering branching out to Europe.

"We are not looking anywhere else overseas," Bouchard said. "But we have nothing to report yet [on that front]. We will continue to remain aggressive [regarding mergers and acquisitions] in Canada and the United States."

The aggressive approach has been in full force since the beginning of 2012, he said. The c-store operator has agreed to add about 450 company-operated and independent-operated locations.

As for earnings for its 2012 fiscal third quarter, Couche-Tard earned nearly $87.6 million, compared to a net profit of $67.5 million during the same period in 2011.

"We were able to increase earnings by 29.7 percent despite the challenges in the economic environment," Bouchard said.

U.S. same-store merchandise sales rose 3.4 percent in Q3 2012 vs. Q3 2011. U.S. motor fuel margins increased 1.1 percent and motor fuel gross margins improved to 14.84 cents vs. 13.12 cents in the same period last year.

According to Bouchard, the improved figures at U.S. convenience stores were the result of targeted promotions and improved foodservice offerings that drove more in-store traffic. In fact, in-store traffic improved by nearly 5 percent in Couche-Tard's Q3 vs. last year, said Bouchard.

Foodservice now comprises about 25 percent of Couche-Tard's sales, and the company has been pleased with that unit thus far, added Raymond Paré, Couche-Tard's vice president and CFO.