Couche-Tard Earnings: Fuel Margins Power a 15% EPS Gain
Couche-Tard earnings for the first quarter of fiscal 2027 landed after the TSX close on Tuesday, September 1: adjusted diluted earnings per share of $0.90, up 15.4% from $0.78 a year earlier. The quarter covers the 12 weeks ended July 19, 2026.
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One point of housekeeping first, because it trips up a lot of Canadian shareholders. Alimentation Couche-Tard is headquartered in Laval, Quebec and trades on the TSX, but it reports in US dollars. Every figure below is in US dollars unless we say otherwise. The dividend is the exception, and it is declared in Canadian cents.
On a reported basis, net earnings attributable to shareholders came in at $828.5 million against $782.5 million, a 5.9% increase, with diluted EPS of $0.90 versus $0.82. The gap between that 5.9% and the adjusted 15.4% is worth an honest sentence rather than a footnote: the year-ago quarter was flattered by an item that does not repeat, a $66.4 million pre-tax gain on GetGo regulatory divestitures. This quarter’s adjusting items were trivial by comparison, a $2.7 million foreign exchange gain and $0.6 million of acquisition costs. Adjusted net earnings rose 12.2% to roughly $827.0 million, and adjusted EBITDA rose 10.5% to $1,783.1 million.
| Metric (US dollars) | Q1 FY2027 | Q1 FY2026 | Change |
|---|---|---|---|
| Net earnings attributable to shareholders | $828.5M | $782.5M | +5.9% |
| Diluted EPS | $0.90 | $0.82 | +9.8% |
| Adjusted net earnings | ~$827.0M | $737.0M | +12.2% |
| Adjusted diluted EPS | $0.90 | $0.78 | +15.4% |
| Adjusted EBITDA | $1,783.1M | $1,613.8M | +10.5% |
| EBITDA | $1,782.5M | $1,670.2M | +6.7% |
| Total revenues | $21.7B | $17.3B | +25.1% |
| Merchandise and service revenues | $4.9B | $4.7B | +4.1% |
Source: Alimentation Couche-Tard first-quarter fiscal 2027 release, September 1, 2026. Quarter of 12 weeks ended July 19, 2026.
Revenue rose 25%. That is not the story.
Total revenues of $21.7 billion, up 25.1%, will be the number that gets quoted, and it is the least informative figure in the release. The company attributes the increase “mainly … to a higher average road transportation fuel selling price, to the contribution from acquisitions, as well as to organic growth in our convenience activities, partially offset by softness in fuel demand.”
Read that carefully. Fuel revenue rose 33.0%, but fuel revenue is largely pass-through dollars at the pump. When the posted price goes up, so does the top line, whether or not the business sold a single extra litre. The line that actually carries margin, merchandise and service revenue, grew 4.1% to $4.9 billion. And volumes went the other way in two of three regions.
Where the profit actually came from
The quarter’s engine was US fuel margin. Couche-Tard earned 52.61 US cents per gallon in the United States, up 8.61 cents from 44.00 cents a year ago, a 19.6% jump, and US fuel gross profit climbed 23.8% to $1,215.9 million. Canada was strong on the same measure, with fuel margin of CA 16.79 cents per litre, up CA 2.58 cents or 18.2%, and Canadian fuel gross profit up 17.8%. Europe and other regions was flat to slightly lower at US 11.34 cents per litre, down 0.07 cents.
Volumes were the counterweight. Same-store fuel volumes fell 1.6% in the United States and 4.3% in Europe and other regions. Canada, at plus 1.1%, was the only region selling more fuel than a year ago.
Set that against merchandise, where same-store revenue rose 1.6% on a consolidated basis. That is the honest shape of the quarter: adjusted EPS up 15.4% while the durable, everyday side of the business grew in the low single digits. Our reading is that the two lines carry different levels of variability, and the release makes the point better than we could. A margin that can add 8.61 cents a gallon in twelve months is a margin that can move materially in the other direction just as quickly. If US fuel margin drifts back toward last year’s 44.00 cents, merchandise has to do a lot more of the work.
CFO Filipe Da Silva framed the quarter this way: “The first quarter demonstrates the balance we are achieving across the business, delivering adjusted EBITDA growth of 10.5% and adjusted diluted earnings per share growth of 15.4%, while maintaining normalized expense growth well below inflation.”
Canada is the soft spot on the shelf
Here is the part a Canadian shareholder should sit with. Same-store merchandise revenue in Canada was flat, 0.0%, against plus 4.1% a year ago. Canadian merchandise and service revenues fell 2.6% to $599.9 million, and Canadian merchandise gross margin slipped 0.6 points to 33.3%. Meanwhile the US business posted plus 1.7% same-store merchandise growth, up from plus 0.4% last year, which CEO Alex Miller called “our fifth consecutive quarter of positive same-store merchandise sales growth in the U.S., supported by continued momentum in food, energy drinks and other nicotine products.”
Two things keep this from being a crisis. Canada is roughly 12% of merchandise and service revenue and roughly 9% of fuel gross profit by the figures in this release, so the home market is not what sets the group’s direction. And Canada’s fuel business was one of the better performers in the quarter, on both margin and volume. Some of the reported softness is also translation: the Canadian dollar averaged 0.7178 against the US dollar this quarter versus 0.7270 a year ago, so identical Canadian sales convert into fewer US-reported dollars than they did last year.
Still, flat is flat. The merchandise line is the one that compounds, and at home it stopped growing.
The balance sheet is clearing room for Żabka
The capital story is the most interesting part of the release. Leverage fell to 1.77:1 from 1.99:1 at April 26, 2026. Net interest-bearing debt dropped to $12,180.9 million from $13,334.7 million, interest-bearing debt came down roughly $1.07 billion in the quarter, and the €750 million ($876.5 million) 2016 euro notes were repaid at maturity on May 6.
The buyback tells the same story from the other side. The program was renewed effective July 23, 2026 for up to 74.2 million shares, 10.0% of the public float as at July 9, 2026, running no later than July 22, 2027. Actual repurchases in the quarter were 0.4 million shares for $26.0 million. That is a trickle against an authorization that size, and our reading of the two together is a company deliberately preserving capacity.
For what, is not much of a mystery. On July 31, 2026, after quarter end, Couche-Tard announced a voluntary tender offer through its wholly owned Circle K Polska sp. z o.o. for all shares of Żabka Group, Poland’s largest convenience retailer, with more than 13,000 stores across Poland and Romania. The offer values Żabka at approximately PLN 32.6 billion, about US$8.6 billion. Holders of roughly 57% of Żabka’s shares have signed hard irrevocable agreements to tender. The company expects to close before the end of fiscal 2027, subject to regulatory approvals, funded with available cash plus new and existing credit facilities, with currency hedges in place because sellers can elect zloty or euro.
Miller’s framing: “We are also looking forward to welcoming Żabka Group into the Couche-Tard family, which will strengthen our capabilities in food, digital engagement and supply chain and complement our organic growth initiatives while expanding our scale in Central and Eastern Europe.”
The dividend was held, not raised. The board declared a quarterly dividend of CA 21.5 cents per share on September 1, with a record date of September 11 and payable September 25, an eligible dividend under the Income Tax Act (Canada). That is the same rate set in December 2025, when it went up from CA 19.5 cents (dividend history: Source: StockAnalysis). Holding it in a quarter where leverage fell this fast is consistent with the same read on capital allocation.
The network stood at 14,509 sites, or 17,220 including Circle K licensed locations, as at July 19, 2026. Return on equity was 19.7% and return on capital employed 13.7%.
What it means if you own ATD
ATD closed at CA$84.28 on Tuesday, up 0.97% on the day, with a market cap of about CA$77.4 billion, a trailing P/E of 17.5 and a dividend yield near 1.0%. The 52-week range is CA$68.30 – CA$95.15, leaving the shares roughly 11% below their high. Data as of the September 1, 2026 close, Source: StockAnalysis. The results came out after that close, so Wednesday is the first session in which the market gets to price them.
If you hold ATD as a long-term compounder, the balanced summary is that this was a strong quarter driven disproportionately by one cyclical input, with the home market flat on the shelf, a balance sheet visibly repositioning for the largest acquisition in the company’s recent history, and a yield that has never been the reason to own it. That lens puts ATD beside the rest of your Canadian blue-chip stocks, where the point is decades of store-level compounding rather than the quarterly print. That is also the lens that makes the Canadian merchandise line worth watching more closely than the fuel margin headline.
What to watch next
Management hosts its conference call at 8:00 am ET this morning, with Miller and Da Silva. The questions worth listening for are how much of the US fuel margin the company expects to keep, what it is doing about flat Canadian merchandise, and the financing detail behind Żabka.
After that, the milestones are regulatory: the Żabka tender is subject to approvals and is expected to close before the end of fiscal 2027. And on the dividend, the current CA 21.5 cent rate dates from December 2025 (Source: StockAnalysis), which makes the fall Q2 release the next scheduled decision point on it rather than a forecast of an increase.
One other item on today’s calendar for Canadian investors: the Bank of Canada announces its rate decision at 9:45 am ET this morning, which we set out separately in our look at Fed hike bets and the case for a Bank of Canada hold.
Ready to act on it?
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Disclaimer: The content on bestcanadianstocks.ca is for informational and entertainment purposes only and does not constitute financial advice. Past performance is not indicative of future results. Always consult a qualified financial advisor before making investment decisions. Results are for the 12 weeks ended July 19, 2026, from the company’s September 1, 2026 release; market and stock data as of the September 1, 2026 close.
