The Quarter in Numbers

Alimentation Couche-Tard (TSX: ATD) delivered its fifth consecutive quarter of positive U.S. same-store merchandise sales growth for the 12-week period ended July 19, 2026, with consolidated comp sales up 1.6% and adjusted diluted EPS rising 15.4% to $0.90. Adjusted net earnings attributable to shareholders reached approximately $827.0 million, against $737.0 million in the year-ago period — a 12.2% increase that CFO Filipe Da Silva credited to disciplined expense management and a stronger fuel-margin environment.

Total merchandise and service revenues hit $4.9 billion, a 4.1% year-over-year gain. The U.S. posted same-store merchandise sales growth of 1.7%, driven by energy drinks and other nicotine products, while Europe and other regions delivered 1.2% SSS growth on the same category dynamics. Canada was flat, as growth in packaged beverages and alcohol was offset by tobacco headwinds from regulatory changes and competitive pressure. Merchandise gross margin narrowed slightly in North America — 34.1% in the U.S. (down 0.5 points) and 33.3% in Canada (down 0.6 points) — reflecting deliberate pricing moves to protect customer value. European margins improved 0.7 points to 39.6% on favorable product-mix shifts.

Fuel Profitability Offsets Volume Softness

The fuel business proved the quarter's clearest earnings catalyst. U.S. road transportation fuel gross margin expanded by 8.61 cents per gallon to 52.61 cents, lifting road transportation fuel gross profit 23.8% to $1.22 billion in the segment. Canada's fuel margin improved CA 2.58 cents per liter to CA 16.79 cents. Europe was essentially flat at US 11.34 cents per liter, constrained by structural changes in the German market. Same-store fuel volumes declined 1.6% in the U.S. and 4.3% in Europe, both reflecting demand sensitivity to elevated retail pump prices, while Canada edged up 1.1% on promotional activity. Total revenues for the quarter reached $21.7 billion, up 25.1%, inflated in large part by higher average fuel selling prices and acquisition contributions from the GetGo integration.

Adjusted EBITDA grew $169.3 million, or 10.5%, to $1.78 billion. Normalized operating expense growth came in at 2.7% — below the inflation level across the network — as management absorbed incremental food-service investment and electronic payment fee pressure from higher fuel prices. The leverage ratio improved to 1.77x from 1.99x at fiscal year-end, after the company fully repaid its €750.0 million ($876.5 million) Euro-denominated senior notes in May.

Żabka Deal Sets Up Eastern Europe Scale

The most consequential forward development sits outside the quarter itself. Shortly after the period closed, Couche-Tard announced a voluntary tender offer through its Circle K Polska subsidiary to acquire all outstanding shares of Żabka Group — Poland's largest convenience retailer — at a valuation of approximately PLN 32.6 billion ($8.6 billion). The target operates more than 13,000 stores across Poland and Romania under an entrepreneurial franchise model, adding a scaled convenience platform in Central and Eastern Europe to Couche-Tard's existing Polish footprint. Shareholders representing approximately 57% of Żabka's outstanding shares have entered hard irrevocable agreements to tender. The deal is expected to close before the end of fiscal 2027, financed through available cash and existing and new credit facilities. Couche-Tard has entered currency derivatives to manage Polish zloty and euro settlement exposure.

Organic unit activity was modest in the quarter: the operator opened or completed construction on 12 company-operated stores and acquired 2, while closing 51, leaving the company-operated count at 10,693. Including CODO, DODO, and franchised sites, the owned-and-operated network stood at 14,509 locations at period-end, with an additional 2,711 Circle K branded sites under licensing agreements — bringing the total network to 17,220. Couche-Tard's Core + More strategy continues to prioritize food-service program acceleration and in-store execution over aggressive organic unit growth, a posture consistent with convenience-sector trends toward higher-margin prepared food dayparts.

For foodservice operators tracking the competitive c-store landscape, Couche-Tard's sustained U.S. SSS momentum — particularly in energy drinks, other nicotine products, and emerging food categories — underscores the segment's growing role as a traffic driver in a selective consumer spending environment.

Written by Michael Politz, Author of Guide to Restaurant Success: The Proven Process for Starting Any Restaurant Business From Scratch to Success (ISBN: 978-1-119-66896-1), Founder of Food & Beverage Magazine, the leading online magazine and resource in the industry. Designer of the Bluetooth logo and recognized in Entrepreneur Magazine's "Top 40 Under 40" for founding American Wholesale Floral, Politz is also the Co-founder of the Proof Awards and the CPG Awards and a partner in numerous consumer brands across the food and beverage sector.