Canada-based Alimentation Couche-Tard Inc. (TSE:ATD) has reported solid results for the fiscal first quarter (ended July 17). Shares of the convenience stores operator have gained 13.7% over the last six months as people returned to in-store shopping after two years of restrictions.
Q1 Results in Detail
Revenues: Revenues increased 37.4% year-over-year to $18.7 billion, driven by a higher average selling price of fuel and fuel products, and a $4.5 million rise in merchandise and service revenues to $4.1 billion. Road transportation fuel revenues rose $4.9 billion year-over-year to $14.3 billion, and other revenues more than doubled to $266.1 million from $115.7 million in the year-ago quarter.
Gross profit: Gross profit totaled $2.9 billion, up 10.9% year-over-year, primarily due to a rise in ATD’s convenience activities.
EBITDA: Adjusted EBITDA rose 10.6% versus the first quarter of the last fiscal year and stood at $1.5 billion.
Earnings: Adjusted earnings came in at 85 cents per share, compared to 71 cents in the corresponding quarter of the Fiscal Year 2022. However, the figure missed the consensus estimate of 94 cents a share.
Encouraged by the results, Brian Hannasch, the President and CEO of Alimentation Couche-Tard, said, “In the face of continued and historic inflationary conditions and high fuel prices, we are pleased to report strong results this quarter, especially in convenience where we had healthy same stores sales in our U.S. market. We also continued to generate robust fuel margins across all of our platforms. In this period of high inflation and high prices, we remain focused on delivering a strong and consistent value to our customers and on maintaining cost discipline in our operations.”
Is ATD Stock a Buy?
On TipRanks, ATD has a Strong Buy consensus rating based on four Buys and one Hold. Alimentation Couche-Tard’s average price prediction of C$67.80 implies almost 20% upside potential.
Ahead of ATD’s quarterly results, Chris Li of Desjardins said, “We expect 1Q to reflect strong U.S. fuel margins, partly offset by continuing fuel volume pressures, temporary fuel margin softness in Europe and elevated SG&A expenses. We remain constructive on ATD’s longer-term growth potential, supported by a robust pipeline of organic growth initiatives.”
Additionally, Alimentation Couche-Tard scores a nine out of 10 on TipRanks’ Smart Score rating system, suggesting that ATD stock has strong potential to outperform the market. Bloggers are also 100% Bullish on ATD stock, compared to the sector average of 64%.
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