Alimentation Couche-Tard Inc. increased its quarterly dividend Friday as it reported that its first-quarter profits more than doubled compared with a year ago, boosted by the acquisition of Statoil Fuel & Retail.

The convenience store company increased its dividend by 1.25 cents to 8.75 cents per share.

The improvement came as Couche-Tard, which keeps its books in U.S. dollars, reported a first-quarter profit of $255 million US, or $1.35 per share, up from a profit of $102.9 million, or 57 cents per share, a year ago.

newchart

Excluding non-recurring items, the company said it would have earned $220 million for the quarter, up from $182 million.

"The numerous improvement efforts deployed in Europe enabled us to turn around the negative trend in in-store sales as well as fuel volume" chief executive Alain Bouchard said.

"In North America, we have been very active in terms of pricing strategies to support in-store traffic growth, which has allowed us to record an increase in same-store merchandise sales but which also had the adverse impact of reducing our margin percentage of the first quarter."

Revenue up almost $3B

Revenue grew to $8.90 billion for the quarter ended July 21, up from $6.01 billion in the same period last year.

Same-store merchandise revenue was up 2.7 per cent in the U.S., 0.7 per cent in Canada and 1.9 per cent in Europe.

Meanwhile, same-store fuel volume sales were up 1.2 per cent in the U.S., up 1.8 per cent in Europe and down 0.4 per cent in Canada.

Couche-Tard shares were up $3.32 or nearly six per cent at $60.68 in trading on the Toronto Stock Exchange.

RBC Capital Markets analyst Irene Nattel said the results were better than expected, helped by better than expected gas margins in the U.S. and a lower than expected depreciation and tax rate.

"Alimentation Couche-Tard reported a good quarter," she wrote in a report to clients.

Nattel also noted that the company disclosed creation of a joint venture to develop its presence in Asia.

During the quarter, Couche-Tard said it set up a new Circle K Asia in which it holds a 50 per cent stake and invested $13.2 million to help launch it with an unnamed partner.

Couche-Tard has more than 4,500 company-operated stores in North America and 1,600 locations in Europe.

Couche-Tard shares closed up $3.38 or nearly six per cent at $60.74 on the Toronto Stock Exchange.