The Quebec-based owner of convenience stores and gas stations said its profit amounted to US$142.5 million or 75 cents per diluted share, or 81 cents on an adjusted basis, in the third quarter.
Couche-Tard (TSX:ATD.B) said it had achieved its own targets, but the results fell short of analyst estimates of 87 cents per share in adjusted earnings or 93 cents per share of net income.
The miss was mainly due to lower than expected U.S. fuel margins, which nonetheless increased nearly 20 per cent to 17.8 cents, and higher depreciation.
Revenue for the 16 weeks ended Feb. 3 was US$11.5 billion — about US$470 million above the consensus estimate — and an increase from US$6.6 billion a year earlier.
The big increases mainly reflected the addition of Scandinavia's Statoil Fuel & Retail last summer as well as smaller purchases in the United States during the third quarter.
European assets contributed US$562.7 million in gross profits and more than US$4.4 billion of revenues.
"Our performance is satisfying compared to market data and the performance of other retailers," chief executive Alain Bouchard said Tuesday.
"Despite the challenges around the cigarettes category and the present strain on consumers, we nonetheless managed to continue to increase the merchandise and service total contribution with the help from fresh food category and improved supply conditions."
Couche-Tard said it resolved a dispute in January with a major U.S. cigarette supplier, which has resulted in some improvement in the contribution of this key product category.
Bouchard said European consumers remain affected by the weak general economy, but trends in the United States are improving.
"Consumers are more confident so I think it's promising for the next few quarters," he said.
The US$2.58-billion acquisition was Couche-Tard's first major foray beyond North America, where it operates under various banners including Couche-Tard and Mac's in Canada and Circle K in the United States.
Excluding acquisition costs and a foreign exchange loss in the quarter, Couche-Tard would have earned US$153.2 million, up $64.3 million or 72.3 per cent and diluted earnings would have been 81 cents per share.
The company affirmed its goal of finding $150 million to $200 million in cost savings by September 2015. In the first 40 weeks after the acquisition, it recorded $17 million of savings before taxes from delisting Statoil, renegotiation of some supplier agreements, lower store costs and department restructuring.
Bouchard said the company continues to evaluate acquisition opportunities, including those for 10 to 50 stores in the U.S.
"In Europe we're not familiar enough with this market. We are hesitating in entering new markets with 50-60 stores, so that means that we have to be more patient to find the right target although there is activity there."
The quarter included a $13.6-million foreign exchange loss, mainly due to exchange rate fluctuations on intercompany balances and conversion of European sales in local currencies to U.S. dollars.
Same store sales grew by 0.8 per cent in the U.S. and by 1.7 per cent in Canada. Same-store fuel sales grew by 0.8 per cent in the U.S. but decreased by 0.9 per cent in Canada.
Couche-Tard's fuel margin increased by nearly 20 per cent to 17.8 cents per gallon in the U.S., was 10.46 cents per litre in Europe and increased 13 per cent to 5.88 cents Cdn per litre in Canada.
Analyst Derek Dley of Canaccord Genuity said the company continues to deliver on its growth plans.
"The stock is trading off because they missed the consensus but I think the quarter was actually in terms of looking at what really drives the stock in terms of their core growth initiatives it was actually quite strong," he said in an interview.
Dley said he expects the results will be volatile over the next couple of quarters as it continues to integrate Statoil.
The company operates 8,467 locations in the U.S., Europe and Canada, including nearly 2,500 added in the past 40 weeks. It also has about 4,150 Circle K stores operating under licensing agreements in several countries in Asia, Mexico and the United Arab Emirates.
Couche-Tard shares closed down $1.25 or 2.25 per cent to C$54.34 at the Toronto Stock Exchange on Tuesday.