Canadian convenience store operator Alimentation Couche-Tard Inc. ATD-T tallied its best U.S. same-store sales growth of the last three years during its latest quarter, a sign consumer confidence is slowly returning in its biggest market as the company also surprised investors with major gains in U.S. gasoline profit margins.
Its shares hit a new all-time high, closing the day at $91.87 on the Toronto Stock Exchange. The company now has a market value of $75.5-billion.
Couche-Tard, which owns the Circle K chain, reported a 3.4-per-cent, year-over-year increase in merchandise sales at comparable U.S. stores during its latest three-month period. Store traffic increased and customers snapped up more packaged beverages, nicotine products and food than in the previous quarter, and the company said it continued to take share from rivals.
Meanwhile, Couche-Tard’s profit margins on gasoline sold in the U.S. hit a five-year high, even as it sold two per cent less fuel at comparable stores.
Stifel analyst Martin Landry said the company was able to use arbitrage strategies to take advantage of volatile crude oil prices seen this year as a result of the war in the Middle East, tallying a US$0.52 per gallon margin during the quarter that outpaced the US$0.35 per gallon industry-wide average.
Both data points helped power Couche-Tard during the quarter ended April 26. Revenue came in at US$19.5-billion for the period, up 20 per cent from the US$16.3-billion last year. Net earnings were US$863.3-million, including a gain on the settlement of a long-standing legal battle over interchange fees. On an adjusted basis, profit was US$667-million or US$0.73 per share, easily beating the average analyst estimate of US$0.54.
“We see better traffic, margin expansion and a more productive network, while we continue to invest in the capabilities that will extend these advantages over time,” Couche-Tard chief executive Alex Miller told analysts on a call Tuesday. “And importantly, our fuel platform continues to perform as our teams lean into the strength and agility of our supply chain and global scale to capture opportunities and grow market share.”
After a solid trajectory of profit growth over the past two decades, Couche-Tard’s business has come under pressure more recently as consumers cut spending to deal with higher levels of debt as well as inflation. Global conflict, including in Ukraine and the Middle East, has added to those worries as retail industry observers analyze whether it will lead to any lasting change in consumer behaviour.
Many of those consumers now appear to be shaking off the bad news, at least south of the border. Others might simply be responding to what Circle K has to offer, including $3 meal deals. With its latest earnings report, Couche-Tard tallied same-store sales growth in the U.S. for the fourth consecutive quarter.
Mr. Miller launched a new five-year strategy in February that builds on Circle K’s traditional strengths in selling fuel, nicotine products and drinks. With the push, Couche-Tard has said it expects it can generate year-over-year adjusted earnings-per-share growth of 10 per cent or more from fiscal 2026 through 2030.
“We believe this quarter demonstrates more proof” that profit growth level can be achieved, Scotiabank analyst John Zamparo said in a note to clients. The company’s earnings beat this quarter “reveals the strength of its fuel business, which is probably more durable than investors give it credit for,” he said.
Couche-Tard has built up its global fuel business over the past decade and now runs that unit from logistics hubs in Houston and Geneva, Switzerland. The company sold 15.4-billion gallons of gasoline and diesel in fiscal 2025, operates a fleet of about 575 trucks, and owns several fuel terminals. It recently bought three terminals in Germany to add to its supply capabilities.
This scale gives the company options on where to source fuel when supply gets squeezed, as it has in recent months. Said Mr. Miller: “It’s about recognizing various markets, how those markets receive product, what options are there to supply those markets, and building those options so that when you need them or when opportunity exists, you can take advantage of that.”
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