COUCHE-TARD third quarter results

Couche-Tard has reported financial results for its third quarter ended February 4, 2007. Net earnings increased 31% to USD43.7 million. Revenues rose 18.8% to USD3.5 billion while merchandise and services revenues increased 11.7% to USD1.36 billion and motor fuel sales amounted to USD2.14 billion. Same-store merchandise revenues were up 1.9% in the US and 3.2% in Canada. "As we did in the first and second quarters of the current fiscal year, we substantially improved our merchandise and service gross margins, driven primarily by better purchasing conditions, our product mix strategy and our IMPACT program which is now implemented in more than 49% of our company-operated stores,” said CEO Alain Bouchard. “The acquisitions made in the current fiscal year accounted for some 70% of our third-quarter sales growth. Same-store merchandise revenues also made a solid contribution to the increase in third-quarter sales, thanks to our pricing strategies and the IMPACT program. We achieved this growth despite the fact that conditions were less favorable in some of our US markets than in the third quarter a year earlier. Unlike last year, we did not benefit from the positive impact of the reconstruction period following the 2006 hurricanes in Florida and the Gulf of Mexico, nor the exceptionally good weather conditions that prevailed in our Southwest markets during the third quarter of the previous year; indeed, they were rather unfavorable this quarter. Motor fuel volumes were up in all our markets, driven by our acquisitions, our ongoing price optimization program in some US markets and the strong contribution of our Western Canadian market. However, retail pump prices declined sharply in the third quarter, and our motor fuel gross margin decreased substantially in the United States and to a lesser extent in Canada."