When it comes to household names in Canadian retail, Canadian Tire (TSX:CTC.A) and Alimentation Couche-Tard (TSX:ATD) are top contenders. One is a century-old institution with a broad consumer base, the other a global convenience powerhouse that quietly dominates corners across North America and beyond. Both recently released strong earnings reports, giving investors a lot to chew on. So which is the better buy right now?
CTC
Let’s start with Canadian Tire, which has come out swinging in 2025. Despite a tough economic backdrop, the dividend stock delivered a solid first quarter, posting a 4.7% increase in comparable sales and a 4% rise in retail revenue. More customers walked through the doors of its Canadian Tire, Mark’s, and SportChek banners, especially in weather-dependent and recreational categories. Auto maintenance, outdoor tools, and hockey gear all had strong showings.
Earnings were a bit trickier. On a headline basis, diluted earnings per share (EPS) fell to $0.67 from $1.38 a year ago. But strip out one-time costs, especially from the ongoing rollout of its “True North” strategy, and normalized diluted EPS actually jumped to $2.18, up from $0.80. That’s an impressive gain.
True North is a key development. This isn’t just a marketing slogan, it’s a sweeping transformation that includes $2 billion in capital investments, a shake-up of its store formats, and new loyalty partnerships with RBC and WestJet. Early returns look promising: loyalty penetration hit 54.5%, and customer satisfaction continues to climb. Importantly, most of the spending is already budgeted, and CTC expects this strategy to boost margins and revenue over the coming years.
Couche-Tard
Now shift over to Alimentation Couche-Tard, which just wrapped its fiscal 2025. This was its 45th year in business, and while the fourth quarter looked soft at first glance, there’s more to the story. Quarterly net earnings came in at $439.4 million, down 3% from last year. Adjusted EPS of $0.46 was also slightly lower. But this minor dip was driven largely by a higher income tax rate and strategic spending.
Dig deeper and the core business looks strong. Same-store sales rose 3.5% in Canada and 3.4% in Europe. Fuel volumes in Canada were also up 3.7%, and fuel margins improved across all regions. Its road transportation fuel gross margin rose to 14.05 cents per litre in Canada, a modest increase but one that reflects strong pricing discipline.
Over the full year, Couche-Tard grew revenue to nearly $73 billion and earned $2.71 per share. This was down just slightly from $2.82 last year. But it still managed to boost its dividend by 14.3% and repurchased $518.9 million in shares. The dividend stock also opened or rebuilt nearly 120 stores in fiscal 2025 and has another 41 already under construction.
Where Couche-Tard really shines is consistency. It operates across multiple geographies, hedges currency exposure well, and runs lean operations. Its net interest-bearing debt is down, leverage is improving, and return on equity remains a solid 18.3%. While it’s not immune to macro trends, it has proven its ability to adapt and thrive.
Which is the winner?
If you’re looking for a growth story tied to domestic retail recovery and a big strategic overhaul, Canadian Tire looks compelling. The normalization of earnings suggests its core retail business is healthy. True North could be a catalyst for long-term value, especially if the dividend stock manages to boost digital adoption and improve store performance as planned. However, the execution risk is real. Big transformations don’t always go smoothly, and the stock could remain volatile in the short term.
Couche-Tard, on the other hand, offers stability and international diversification. It’s more defensive, with lower exposure to discretionary spending swings. The convenience retailer’s disciplined capital allocation and focus on long-term profitability make it a good hold through various economic cycles.
Ultimately, it depends on your investing style. Want upside potential with a bit of risk? Canadian Tire is your pick. Prefer steady compounding and less drama? Couche-Tard might be the safer bet. Both dividend stocks have merits, but today, Couche-Tard edges out Canadian Tire slightly for its proven ability to weather global challenges and reward shareholders along the way.
