As with TD, there's potential for them to raise their current target which is $76.00. GLTA
FQ4 First Look: Fuel Drives Strong EPS Beat
ATD delivered an outsized Q4 EPS beat ($0.71 vs. Street $0.49 and CIBCe
$0.45) with the variance vs. our model driven by U.S. fuel margins (+$0.16
benefit) and stronger-than-expected merchandise GM%, partially offset by a
mixed top line.
Puts & Takes On Q4: Though U.S. fuel margins posted their widest gap to
OPIS (+9cpg) in four quarters, we are hesitant to read too much into Q4’s
outperformance given the inherent volatility due to various factors. In
merchandise, margins surprised to the upside and while management only
called out a favourable “change in product mix” (i.e., likely private label), we
suspect a normalisation in the supply chain was likely a tailwind as well.
Furthermore, merchandise comps were mixed with Canada ahead of
expectations despite headwinds from illicit tobacco competition while U.S.
comps missed by 100bps due likely to a moderation in Y/Y price inflation and
mix. Lastly, SG&A dollars were ahead of the Street but after adjusting for the
extra week, normalized expense growth was lower than the average rate of
inflation across the network of +5.8% and was likely flattish on a three-year-
CAGR basis vs. Q3.
Management will host a conference call on Wednesday June 28 at 8:00 a.m.
ET; dial-in number is 416-764-8682; access code: 48181733#. The table in
Exhibit 1 summarizes FQ4 results, our estimates, and consensus.