Alimentation Couche-Tard (ATD.B), a Canadian convenience store chain, topped expectations in the first quarter of 2022. However, its profits slipped despite a strong rise in revenues.
Total revenue came in at $13.58 billion in the quarter ended July 18, an increase of 40% from $9.71 billion a year earlier. Analysts on average expected revenue of $13.16 billion. (See Alimentation Couche-Tard stock charts on TipRanks)
Total revenue from merchandise and services was $4.1 billion, an increase of 5.4%. Same-store merchandise revenues decreased by 0.2% in the United States and 9.6% in Canada, while they increased by 5.9% in Europe and other regions.
Net earnings amounted to $764.4 million ($0.71 per diluted share) for Q1 2022 compared to $777.1 million ($0.70 per diluted share) for Q1 2021. Adjusted earnings were approximately $758 million, compared with $795 million in the prior-year quarter. Adjusted diluted net earnings per share were $0.71, the same as last year. Analysts were expecting $0.65 per share.
Couche-Tard president and CEO Brian Hannasch said, “I am pleased to report that across our global network, we had solid first quarter results, both in convenience and fuel, even when compared to a very strong quarter last year.
“Same-store sales were especially good in Europe, and across all our regions, we have seen positive growth in food as the ease and the quality of our offer are clearly resonating with our customers.”
On August 31, J.P. Morgan analyst John Royall kept a Buy rating on ATD.B with a C$54 price target. This implies 5.9% upside potential.
Consensus among analysts is that ATD.B is a Strong Buy based on nine Buys and three Holds. The average Alimentation Couche-Tard price target of C$55.24 implies 8.4% upside potential to current levels.