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Alimentation Couche-Tard Inc (TSE:ATD)
TSX:ATD
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Alimentation Couche-Tard Inc
(TSX:ATD)
77Outperform
Positive Factors
Growth Opportunities
There remains significant opportunities for growth in Asia and Europe through global M&A roll-up.
International Expansion
Momentum is building outside the U.S., which positively impacts the company's valuation.
Product Performance
ATD's value meal bundles continue to perform well, better than our FQ3/25 assumptions.
Negative Factors
Acquisition Challenges
ATD would likely need to pay a multiple higher than its own valuation, and a significant amount of equity financing may be required.
Earnings Estimate
Analyst lowers EPS estimate reflecting a lower U.S. fuel margin forecast and reduced U.S. merchandise and fuel SSS due to a still soft consumer and disruptive weather conditions.
Franchise Limitations
Half of Seven's North American c-store network are franchised, which may limit the synergies potential.
Alimentation Couche-Tard Inc (ATD) vs. S&P 500 (SPY)
Market Cap
C$67.23B
Dividend Yield1.04%
Average Volume (3M)1.60M
Price to Earnings (P/E)18.9
Beta (1Y)0.50
Revenue Growth11.62%
EPS Growth-8.08%
CountryCA
Employees149,000
SectorConsumer Cyclical
Sector Strength63
IndustrySpecialty Retail
Share Statistics
EPS (TTM)3.76
Shares Outstanding948,064,400
10 Day Avg. Volume1,606,372
30 Day Avg. Volume1,598,689
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.63
Price to Cash Flow (P/CF)8.70
P/FCF Ratio12.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$85.75Price Target Upside20.93% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering12
Alimentation Couche-Tard Inc Business Overview & Revenue Model
Company DescriptionAlimentation Couche-Tard Inc. operates and licenses convenience stores. Its convenience stores sell tobacco products, grocery items, candies and snacks, beer, wine, beverages, and fresh food offerings; road transportation fuels; and aviation fuels, as well as energy for stationary engines. The company operates its convenience stores chain under the Circle K, Couche-Tard, Holiday, Ingo, and Mac's brands. It is also involved in the sale of lottery tickets, calling and gift cards, postage stamps, and bus tickets; issuance of money orders; and provision of automatic teller machines and car wash services. As of April 24, 2022, it operated and licensed 12,166 convenience stores, which include 9,808 company-operated stores in North America, Europe, and Asia, as well as approximately 1,800 stores operated under the Circle K banner in Cambodia, Egypt, Guam, Guatemala, Honduras, Indonesia, Jamaica, Macau, Mexico, New Zealand, Saudi Arabia, the United Arab Emirates, and Vietnam. The company was formerly known as Actidev Inc. and changed its name to Alimentation Couche-Tard Inc. in December 1994. Alimentation Couche-Tard Inc. was founded in 1980 and is headquartered in Laval, Canada.
How the Company Makes MoneyAlimentation Couche-Tard Inc. generates revenue through multiple streams, primarily from the sale of fuel and merchandise in its convenience stores. Fuel sales account for a significant portion of its income, as the company operates numerous fuel stations linked to its store locations. Merchandise sales, including snacks, beverages, and other convenience items, contribute substantially to its revenue. The company also benefits from strategic partnerships with various suppliers and brands, enhancing its product offerings and customer reach. Additionally, Couche-Tard's acquisition strategy and expansion into new markets further bolster its revenue growth, enabling it to leverage economies of scale and operational efficiencies.
Alimentation Couche-Tard Inc Financial Statement Overview
Summary
Alimentation Couche-Tard Inc exhibits strong financial performance with robust profitability metrics and solid cash flow generation. The company maintains a balanced capital structure with manageable leverage. However, attention should be paid to the decrease in free cash flow growth, which could impact liquidity if it continues. Overall, the company is well-positioned financially within the Retail - Discretionary industry.Income Statement
The company shows a strong gross profit margin of 17.2% and a solid net profit margin of 3.5% for TTM (Trailing-Twelve-Months). Revenue growth is healthy at 5.3% compared to the previous annual period, and EBITDA margin remains robust at 8.0%. These metrics indicate strong profitability and growth trajectory despite a slight decrease in EBIT margin.85
Very Positive
Balance Sheet
The debt-to-equity ratio is 1.02, which reflects a moderate level of leverage. Return on equity is solid at 18.4%, indicating effective use of equity to generate profits. The equity ratio stands at 37.7%, suggesting a balanced capital structure. The balance sheet is stable but could face risk if debt levels increase.78
Positive
Cash Flow
The operating cash flow to net income ratio is 1.87, demonstrating strong cash generation ability relative to earnings. The free cash flow to net income ratio of 1.03 indicates adequate free cash flow generation. However, free cash flow growth has decreased by 7.3% from the previous annual report, which could highlight potential investment or growth initiatives.82
Very Positive
| Breakdown | |||||
| TTM | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 72.90B | 69.26B | 71.86B | 62.81B | 45.76B | 54.13B | Gross Profit |
| 12.55B | 12.10B | 12.05B | 11.00B | 10.12B | 9.73B | EBIT |
| 3.75B | 3.81B | 4.23B | 3.68B | 3.68B | 3.16B | EBITDA |
| 5.84B | 5.73B | 5.82B | 5.27B | 5.05B | 4.55B | Net Income Common Stockholders |
| 2.58B | 2.73B | 3.09B | 2.68B | 2.71B | 2.35B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 2.23B | 1.87B | 929.20M | 2.17B | 3.03B | 3.68B | Total Assets |
| 37.11B | 36.94B | 29.05B | 29.59B | 28.39B | 25.68B | Total Debt |
| 14.18B | 14.47B | 9.47B | 9.44B | 9.60B | 10.38B | Net Debt |
| 12.02B | 13.16B | 8.63B | 7.30B | 6.59B | 6.74B | Total Liabilities |
| 23.01B | 23.64B | 16.48B | 17.15B | 16.21B | 15.61B | Stockholders Equity |
| 13.97B | 13.19B | 12.56B | 12.44B | 12.18B | 10.07B |
| Cash Flow | Free Cash Flow | ||||
| 2.67B | 2.87B | 2.54B | 2.28B | 2.86B | 2.31B | Operating Cash Flow |
| 4.81B | 4.82B | 4.34B | 3.94B | 4.09B | 3.72B | Investing Cash Flow |
| -5.36B | -6.60B | -2.28B | -1.80B | -1.39B | -1.21B | Financing Cash Flow |
| 1.26B | 2.21B | -3.35B | -2.95B | -3.43B | 480.70M |
Alimentation Couche-Tard Inc Technical Analysis
Neutral
70.91
Price Trends
71.16
Negative
74.87
Negative
75.99
Negative
Market Momentum
-0.31
Negative
51.81
Neutral
28.80
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ATD, the sentiment is Neutral. The current price of 70.91 is above the 20-day moving average (MA) of 70.00, below the 50-day MA of 71.16, and below the 200-day MA of 75.99, indicating a neutral trend. The MACD of -0.31 indicates Negative momentum. The RSI at 51.81 is Neutral, neither overbought nor oversold. The STOCH value of 28.80 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:ATD.
Alimentation Couche-Tard Inc Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | C$2.51B | 18.23 | 18.85% | 3.02% | 4.23% | 6.08% | |
78 Outperform | C$10.85B | 16.48 | 12.64% | 1.69% | 1.05% | -6.94% | |
77 Outperform | C$67.23B | 18.88 | 18.66% | 1.04% | 11.62% | -8.08% | |
73 Outperform | C$2.93B | 30.11 | 6.33% | 3.81% | 0.89% | ― | |
66 Neutral | C$5.51B | 43.53 | 4.00% | 4.45% | -12.79% | -72.79% | |
59 Neutral | $11.48B | 10.33 | -0.21% | 4.02% | 1.19% | -15.83% |
* Consumer Cyclical Sector Average
Performance Comparison
TSE:ATD
Alimentation Couche-Tard Inc
70.91
-4.43
-5.88%
LBLCF
Loblaw Companies
147.89
40.74
38.02%
TSE:EMP.A
Empire Co Cl A NV
46.40
14.98
47.68%
TSE:MFI
Maple Leaf Foods
23.65
1.45
6.53%
TSE:NWC
North West
52.38
14.25
37.37%
TSE:PKI
Parkland
31.70
-9.75
-23.52%
Alimentation Couche-Tard Inc Earnings Call Summary
Earnings Call Date: Mar 18, 2025 | % Change Since: 6.87% | Next Earnings Date: Jul 1, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong performance in Canada and Europe, successful M&A activities, and growth in meal deals and loyalty programs. However, challenges in the U.S. market, including severe weather impacts, declining tobacco sales, and inflationary pressures, were noted. The company is actively working on strategic initiatives to address these issues and leverage growth opportunities.Highlights
Positive Same-Store Sales in Canada and Europe
Same-store sales were positive in both Canada (2.8% increase) and Europe (0.2% increase) compared to the same quarter last year.
Successful M&A Activities
One-year anniversary of acquiring assets from TotalEnergies, nearly doubling size in Europe and generating expected synergies. Progress in acquiring Seven & I Holdings noted.
Strong Performance in Canadian Alcohol Sales
Following legal changes, close to 50% of beer sales in Canada come from Central Canada's business unit, with excellent performance in beer space.
Growth in Meal Deals and Loyalty Programs
Nearly 465,000 meal deals sold weekly in North America; U.S. Inner Circle loyalty program registrations up 13%, closing in on 10 million members.
Increased Employee Retention and Engagement
Significant improvement in store turnover and new hire retention, awarded Gallup Exceptional Workplace Award for the fourth consecutive year.
Strong Fuel Margins
Fuel margins increased across all regions, with margins in the U.S. at $44.28 per gallon, an increase of $1.09 per gallon.
Improved U.S. Merchandise Margin
Merchandise and service gross margin in the U.S. increased by 0.9% to 34%.
Adjusted EBITDA Growth
Adjusted EBITDA increased by 11.3% compared with the corresponding quarter of fiscal 2024.
Lowlights
Challenges in U.S. Fuel and Merchandise Sales
Same-store road transportation fuel volumes decreased by 3% in the U.S.; same-store merchandise revenues decreased by 0.1%.
Impact of Severe Weather in U.S.
Winter storms in Southern U.S. negatively impacted sales performance, estimated to have impacted same-store sales by 30 basis points.
Softness in U.S. Tobacco Sales
Overall U.S. tobacco sales were down about 1%, with cigarette sales declining by 2.5%.
Inflationary Pressures Persist
Ongoing inflationary conditions affecting consumer spending and company operations.
Lower Canadian Merchandise Margin
Canadian merchandise and service gross margin decreased by 1.8% to 32.4%, primarily due to product mix changes.
Company Guidance
In the third quarter of fiscal year 2025, Alimentation Couche-Tard reported positive improvements in business performance despite ongoing consumer caution in spending. Same-store sales increased by 2.8% in Canada and 0.2% in Europe, with a slight decline of 0.1% in the United States, affected by historic winter storms. The company's meal deal promotions showed strong growth, selling nearly 465,000 meal deals weekly across North America. Fuel margins remained stable, with a road transportation fuel gross margin of $44.28 per gallon in the U.S., €9.29 per liter in Europe, and CAD13.54 per liter in Canada. The company also reported a 13% increase in U.S. Inner Circle loyalty registrations, nearing 10 million members. Additionally, Couche-Tard's European B2B transit charging volumes grew by 70% year-over-year. Overall, adjusted EBITDA rose by 11.3%, and the company declared a quarterly dividend of CAD19.5 per share.Alimentation Couche-Tard Inc Corporate Events
M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
Alimentation Couche-Tard Reports Positive Q3 2025 Results Amid Market Challenges
Positive
Mar 18, 2025
Alimentation Couche-Tard Inc. reported a positive third quarter for fiscal year 2025, with net earnings attributable to shareholders reaching $641.4 million, up from $623.4 million in the previous year. The company experienced growth in same-store sales in Canada and Europe, while the U.S. market showed sequential improvement despite challenges from winter storms. The fuel business maintained market share in the U.S., and merchandise and service revenues increased by 5.0%. The company continues to focus on organic growth and acquisitions, marking the one-year anniversary of acquiring assets from TotalEnergies, which has contributed to its performance.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.