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1. Company Snapshot

1.a. Company Description

Alimentation 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.

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1.b. Last Insights on ATD

The recent performance of Alimentation Couche-Tard Inc. is driven by the company's potential takeover bid for Japanese rival Seven & i Holdings Co. The acquisition would require Couche-Tard to divest US stores, potentially leading to a sale of underperforming assets. Seven & i Holdings, in response, plans to split its North American convenience-store unit into a separate entity, list it by 2026, and buy back shares to strengthen its case against the takeover. This move may impact Couche-Tard's growth prospects and valuation, with a fair value estimate of CA$106 per share cited by an analyst.

1.c. Company Highlights

2. Alimentation Couche-Tard's Q2 FY2026 Earnings: Solid Progress Across the Board

Alimentation Couche-Tard reported net earnings attributable to shareholders of $741 million or $0.79 per share on a diluted basis, with adjusted net earnings of $734 million or $0.78 per share, up 5.4% year-over-year. The company's actual EPS came out at $1.1, beating estimates of $1.05. Same-store sales growth was 1.2% in the U.S., 5.4% in Canada, and 0.5% in Europe and other regions, driven by the success of meal deals, with over 10 million bundles sold, averaging over 850,000 bundles per week. Adjusted EBITDA increased by 6.2% year-over-year, driven by acquisitions, improved merchandise and service, and road transportation fuel gross margin.

Publication Date: Nov -26

📋 Highlights
  • Strong Earnings Growth:: Adjusted net earnings rose 5.4% to $734 million ($0.78/share), driven by acquisitions and margin improvements.
  • Global Same-Store Sales Momentum:: Growth across all regions: 1.2% in the U.S., 5.4% in Canada, and 0.5% in Europe/other regions.
  • Aggressive Store Expansion:: 29 new stores opened since May, 73 under construction, with a 5-year target of 500 new stores.
  • Food Sales Surge:: Same-store food growth hit a 12-month high, with 10+ million meal deals sold and 850k weekly bundles.
  • Robust Balance Sheet:: $2 billion in cash, $3 billion credit facility, and 17.7% return on equity, supporting future investments and dividends.

Regional Performance and Sales Growth

The company is seeing differences in same-store sales growth across regions, with the Southern states experiencing slower growth compared to the Midwest. However, they believe this to be transitory and are happy with their positions in these markets. Loyalty penetration and food growth are driving sales, with food penetration expected to reach 20% in North America. The Inner Circle loyalty program now has over 12.5 million members across the U.S.

Food Business and Margin Expansion

The company has made significant improvements in its food category, with spoilage rates improving by 400-500 basis points. They are focused on growing sales and believe there is future margin expansion possible as they continue to improve their supply chain. The meal deals program is now available across their entire footprint, including the U.S., Canada, and Europe, driving increased transactions and resonating with customers.

Valuation and Financial Health

With a P/E Ratio of 19.62 and an EV/EBITDA of 10.9, the company's valuation appears reasonable considering its growth prospects. The company's return on equity stood at 17.7%, and return on capital employed stood at 11.9%, with a leverage ratio of 2.21. The company had strong balance sheet ability with $2 billion in cash and an additional $3 billion available through its revolving unsecured operating credit facility. Analysts estimate next year's revenue growth at 2.8%.

Outlook and Priorities

The company's top priorities remain focused on operations, execution, and growing its digital platforms. They see tailwinds in the energy sector and from mix shifts in other nicotine products. The company expects to open three new distribution centers to bring in more self-distribution, with the ramp expected to take a few months. They plan to expand the Flavortown initiative across the U.S. over the next year, having seen positive growth in hot food sales in its Northern Tier business unit.

3. NewsRoom

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Casey’s General Has the Economics of Convenience Stores Down. Buy the Stock.

Dec -04

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This TSX stock's price may have highest to rise among TD's initial top picks for 2026

Nov -28

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Alimentation Couche-Tard (TSE:ATD) Has Announced That It Will Be Increasing Its Dividend To $0.215

Nov -28

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Alimentation Couche-Tard Price Target Raised to $85 at Desjardins

Nov -26

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Assessing Couche-Tard’s Value After 10% Drop and Expansion News in 2025

Nov -25

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Alimentation Couche-Tard Inc (ANCTF) Q2 2026 Earnings Call Highlights: Strong Sales Growth and ...

Nov -25

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Couche-Tard Surges as CEO Teases Global Deal Spree

Nov -25

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TSX at New High With Industrials, Miners, The Best Performers, Energy Down

Nov -25

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.30%)

6. Segments

The Sale of Goods for Immediate Consumption, Road Transportation Fuel and Other Products

Expected Growth: 4.3%

Alimentation Couche-Tard’s convenience stores benefit from increasing demand for food and beverages on-the-go, driven by a growing working population and busy lifestyles. Additionally, the company’s fuel sales are supported by a rebound in global oil demand.

7. Detailed Products

Circle K Convenience Stores

A global convenience store brand offering a wide range of food, beverages, and other daily essentials

Statoil Fuel Stations

A network of fuel stations providing high-quality fuel and other automotive services

Mac's Convenience Stores

A Canadian convenience store chain offering a variety of food, beverages, and other convenience items

Kangaroo Express Convenience Stores

A southeastern US-based convenience store chain offering food, beverages, and other daily essentials

Topaz Energy Fuel Stations

An Irish fuel station network providing high-quality fuel and other automotive services

Couche-Tard Food Services

A range of food services, including coffee, sandwiches, and other ready-to-eat items

8. Alimentation Couche-Tard Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Alimentation Couche-Tard Inc. is medium due to the presence of alternative convenience store chains and other retail formats that offer similar products and services.

Bargaining Power Of Customers

The bargaining power of customers for Alimentation Couche-Tard Inc. is low due to the fragmented nature of the convenience store industry and the lack of significant buyer concentration.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Alimentation Couche-Tard Inc. is medium due to the presence of a few large suppliers of fuel and merchandise, but the company's scale and diversification mitigate this risk.

Threat Of New Entrants

The threat of new entrants for Alimentation Couche-Tard Inc. is low due to the high barriers to entry in the convenience store industry, including the need for significant capital investment and established relationships with suppliers.

Intensity Of Rivalry

The intensity of rivalry for Alimentation Couche-Tard Inc. is high due to the competitive nature of the convenience store industry, with many established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 42.97%
Debt Cost 4.74%
Equity Weight 57.03%
Equity Cost 8.19%
WACC 6.71%
Leverage 75.34%

11. Quality Control: Alimentation Couche-Tard Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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AutoZone

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Value: 3.7

Growth: 7.2

Quality: 6.1

Yield: 0.0

Momentum: 9.0

Volatility: 9.7

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Couche-Tard

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Quality: 4.4

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

74.17$

Current Price

74.17$

Potential

-0.00%

Expected Cash-Flows