In the ever-evolving world of convenience retail, Alimentation Couche-Tard (TSX:ATD) stands out as one of Canada’s most successful global players. From its modest beginnings in Laval, Quebec, in 1980, it has grown into a retail giant, operating nearly 16,700 stores across Canada, the United States, Europe, and parts of Asia.
It’s best known at home for its Couche-Tard and Mac’s locations, but internationally, its Circle K brand is where the bulk of the growth has come. With its wide reach and proven ability to scale, many investors are asking the same thing this year. Should you buy, sell, or hold Couche-Tard stock in 2025?
Recent moves
Earnings have helped support optimism. In its most recent report, covering the third quarter of fiscal 2025, ATD stock posted net earnings of $641.4 million. That’s up from $623.4 million the year before. Adjusted diluted net earnings per share (EPS) came in at $0.68, up from $0.65 a year ago. It’s not explosive growth, but it’s steady and reliable. Something investors tend to value in a defensive sector stock like this. Total revenue rose to $20.9 billion, a 6.5% increase year over year, although that did fall slightly short of analyst expectations, which were just over $21 billion.
Not everything is going perfectly, however. Like many retailers, Couche-Tard is seeing the impact of inflation and high interest rates on consumer spending. Shoppers are being more selective. Same-store road transportation fuel volumes fell 3% in the United States. That decline was partly due to a mild winter, which affected driving patterns, but there’s no question that cautious spending is playing a role, too. In Canada and Europe, volumes were more stable. Still, it’s something to keep an eye on as inflation trends continue to evolve.
Despite these headwinds, the company is forging ahead with expansion. Over the past year, Couche-Tard has added more than 100 new locations and remains on track with its longer-term growth goals. It’s also investing in modernizing its stores, improving digital tools, and expanding its food service offerings. These upgrades are meant to increase traffic and boost margins across its global footprint.
Looking ahead
Perhaps the biggest development that could shape Couche-Tard’s future is its ongoing interest in acquiring Japan’s Seven & i Holdings, the parent company of 7-Eleven. Reports have surfaced that ATD stock may be preparing a massive bid of nearly $47 billion. That’s no small sum, but the logic behind the deal is clear. A successful acquisition would instantly make ATD stock the dominant force in global convenience retail, with a combined network of over 20,000 stores. It would also give it a stronger position in Asia—an area with long-term growth potential.
Of course, big deals come with big risks. Past attempts to acquire parts of 7-Eleven have been blocked, and Japanese regulators may not welcome foreign ownership of such a prominent brand. Even if a deal is reached, ATD stock would need to manage integration carefully to avoid distracting from its core operations. But if it pulls it off, the rewards could be significant.
So, where does that leave investors in 2025? The case for holding, or even buying, looks solid. The company is profitable, growing, and well-managed. It has a history of smart acquisitions and a knack for adapting to consumer trends. Even with economic pressures, it continues to increase earnings and expand its presence. The dividend isn’t high, but the company has increased steadily over the years, signalling confidence in its financial stability.
Bottom line
In short, Couche-Tard’s recent performance and future plans suggest it’s worth holding onto and maybe even buying more of in 2025. It’s not without risk, especially if the 7-Eleven acquisition gets complicated. However, its steady earnings, global reach, and focus on strategic growth give it staying power in any well-balanced portfolio.
