Alimentation Couche-Tard (ATD) Q1 2025 earnings summary

Executive summary

• Net earnings attributable to shareholders for Q1 FY2025 were $790.8 million ($0.83 per diluted share), down from $834.1 million ($0.85 per share) year-over-year, mainly due to softer traffic, lower US fuel margins, and economic headwinds.

• Adjusted net earnings were $790.0 million, a 5.7% decrease year-over-year, with adjusted diluted EPS down 3.5%.

• Revenue rose 17.0% to $18.3 billion, driven by acquisitions and higher wholesale fuel revenues, partially offset by lower average fuel prices and weaker consumer demand.

• Announced definitive agreement to acquire 270 GetGo Café + Market sites in the US for $1.6 billion and nine Texaco-branded sites in Ireland, with closings expected by 2025 pending regulatory approval.

• Integration of new European assets, including TotalEnergies sites, progressing well, with $187 million in identified synergies over five years.

Financial highlights

• Q1 FY25 net earnings attributable to shareholders: $790.8 million, or $0.83 per diluted share; adjusted net earnings: $790 million, down from $838 million in Q1 FY24.

• Revenues rose 17.0% to $18.3 billion; merchandise and service revenues increased 5.1% to $4.5 billion; road transportation fuel revenues rose 21.6% to $13.7 billion.

• Gross profit grew 8.0% to $3.2 billion; adjusted EBITDA up 4.8% year-over-year to $1.6 billion.

• Return on equity: 19.8%; return on capital employed: 12.8% as of July 21, 2024.

• Operating, selling, general and administrative expenses increased 13.4%, but normalized growth was 3.8%.

Outlook and guidance

• Expecting gross margin to rebound in coming quarters as promotional investments moderate and supplier funding increases.

• Confident in ability to continue taking market share and leveraging loyalty programs for growth.

• Integration of European retail assets from TotalEnergies SE is progressing, with $187 million in identified synergies over five years.

• Focus remains on strategic plan pillars: food and beverage, fuel, digital, supply chain, and cost efficiency.

• Inflation easing and anticipated interest rate reductions in the U.S. expected to relieve pressure on lower-income customers.