Currently have a $75.00 target. GLTA

EQUITY RESEARCH
November 22, 2022 Flash Research
ALIMENTATION COUCHE-TARD INC.

Q2 First Look: In-line EBITDA, U.S. Merch. Showing Strength
ATD reported mixed Q2 results that were just shy of consensus expectations driven largely by below the line items. Adjusted EPS of $0.82 came in below CIBCe/consensus of $0.86/$0.84 and adjusted EBITDA of $1,455MM was modestly below CIBCe/consensus of $1,476MM/$1,474MM.

On the positive, merchandise same-stores sales (SSS) came in ahead of
expectations in the U.S. and Europe, and on a three-year stack, comps
accelerated modestly on a sequential basis. Merchandise GM% was also
healthy, up 21 bps from last year. European SSS of +2.9% is impressive in the context of a material shortfall on fuel volumes (-6.3% vs. street -3.8%).


On the negative side, operating expenses were 2% above forecast and
organic opex growth was 8.1%. Fuel volumes in both Europe and Canada were below forecast, along with Europe fuel margins, though this was attributable to FX. U.S. fuel margins also missed our forecast and posted the smallest gap to OPIS since the onset of the pandemic, but total fuel GP$ were in line. Higher D&A and tax rate vs. CIBCe were slightly offset by lower interest expense, but netted out, these were a 5-cent headwind to EPS.


Management will host a conference call on November 23 at 8:00 a.m. ET;
dial-in number is 1 888 390-0549; passcode: 78045775#. The table in Exhibit
1 summarizes Q2 results, our estimates, and consensus.