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Couche-Tard Posts Better-Than-Expected Q4 Results; Shares Gain Almost 5%

Shares of Alimentation Couche-Tard (ATD.B), a Canadian convenience store chain, jumped almost 5% in early trading on Wednesday after the company topped quarterly estimates. Sales at its fuel outlets surged following a fast vaccinations roll-out and the easing of restrictions.

Total revenue came in at $12.24 billion in the fourth quarter ended April 25, an increase of 26.3% from $9.69 billion a year earlier. Analysts on average expected revenue of $11.65 billion, according to IBES data from Refinitiv.

Total revenue from merchandise and services was $3.7 billion, an increase of 15.2%. Same-store merchandise revenues grew 8.1% in the United States, 9.7% in Europe and other regions, and 1.6% in Canada.

Meanwhile, net income attributable to shareholders of the company amounted to $563.9 million ($0.52 per diluted share) for Q4 2021 compared to $576.3 million ($0.52 per diluted share) for Q4 2020. Adjusted net income was approximately $564 million, compared to $520 million in the prior-year quarter. Adjusted diluted net earnings per share were $0.52, an increase of 10.6% from $0.47 for the same quarter last year. Analysts were expecting $0.42 per share.

Couche-Tard President and CEO Brian Hannasch said, “We had a solid fourth quarter overall, with results strengthening where we are seeing COVID-19 restrictions easing. Across the board, we had positive trends in same-store merchandises sales and fuel volumes as traffic is returning to our locations. While fuel volumes remained impacted by restrictive measures, we had a steady improvement in parts of the network, especially in the U.S., where we are starting to see a return to more normal driving behavior. We also continued to realize good fuel margins in all regions of the business, despite rising product costs.” (See Alimentation Couche-Tard stock chart on TipRanks)

Following the results, Goldman Sachs analyst Bonnie Herzog kept a Buy rating on ATD.B with a C$52.00 price target. This implies 13.2% upside potential.

Consensus among analysts is that ATD.B is a Moderate Buy based on 6 Buys and 3 Holds. The average Alimentation Couche-Tard price target of C$49.11 implies 7.5% upside potential to current levels.

TipRanks’ Smart Score

ATD.B scores a 9 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock’s returns are likely to beat the overall market.

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