I. Executive Summary

This report provides a comprehensive fundamental analysis of Alimentation Couche-Tard Inc. (“Couche-Tard” or “the Company”), a global leader in the convenience and mobility sector. The analysis indicates that Couche-Tard is a world-class operator with a formidable competitive moat built on scale, operational excellence, and a proven track record of value-accretive acquisitions. The Company is currently at a critical juncture, executing a strategic pivot to mitigate the long-term secular decline in its core road transportation fuel business by aggressively expanding its in-store offerings, particularly in fresh food, and building a global loyalty platform.

Management has demonstrated exceptional skill in navigating recent macroeconomic challenges, including inflationary pressures and fuel price volatility, while maintaining financial discipline. The “10 for the Win” five-year strategic plan, which aims to nearly double EBITDA to $10 billion by fiscal 2028, provides a clear roadmap for future growth, balanced between continued industry consolidation and ambitious organic initiatives. The recent acquisition of TotalEnergies’ European retail assets represents a significant step in expanding its international footprint and provides a platform for growth in electric vehicle (EV) charging.

However, the transition from a fuel-centric to a food-and-convenience-centric model introduces significant operational complexity and execution risk. The long-term threat posed by EV adoption to fuel volumes remains the most significant headwind facing the business. While the Company is proactively addressing this challenge, the success of its transformation is not yet assured.

From a valuation perspective, Couche-Tard currently trades at multiples that are broadly in line with its historical averages. It trades at a notable discount to food-focused peers like Casey’s General Stores, suggesting the market may not be fully pricing in the potential success of its strategic pivot. Conversely, this also reflects the inherent risks in its transition. The valuation appears reasonable, reflecting a balance between its established operational strengths and the uncertainties of its long-term evolution.

This analysis directly addresses several key questions for investors:

1. Sustainability of Acquisition Model: The acquisition-driven growth model remains viable in the medium term, supported by a highly fragmented U.S. market. However, long-term sustainability depends on management’s ability to continue identifying accretive targets and successfully integrating increasingly diverse business models, such as those with a heavier focus on foodservice.
2. Competitive Positioning: Couche-Tard is a dominant force in the industry, leveraging its scale for significant cost and purchasing advantages. Its competitive position is strong, but it faces evolving threats from non-traditional retailers and must successfully execute its in-store evolution to maintain its leadership.
3. Navigating Recent Challenges: Management has proven highly effective, using its sophisticated fuel supply chain to manage margin volatility and implementing disciplined cost controls to outperform inflation, thereby protecting profitability during a turbulent period.
4. Growth Opportunities & Risks: The largest growth opportunity lies in the successful execution of the “10 for the Win” strategy, particularly the expansion of high-margin fresh food and the cultivation of customer loyalty. The most significant risk is the structural decline of fuel demand due to the EV transition, coupled with the execution risk of transforming its business model.
5. Valuation Attractiveness: The current valuation is not overtly cheap or expensive relative to its own history. The discount to more food-centric peers suggests potential for a valuation re-rating if the strategic pivot proves successful, but this is balanced by the considerable risks involved in the transition.
6. Long-Term Positioning: The Company is one of the most forward-thinking operators in the sector, proactively investing in EV charging in Europe and acquiring assets to bolster its foodservice capabilities. It is well-positioned to navigate the industry’s long-term structural changes, but its journey is in the early stages, and the ultimate outcome remains uncertain.

II. Company Overview & Business Model

Alimentation Couche-Tard Inc., founded in Quebec, Canada, in 1980, has evolved from a single convenience store into a global leader in convenience and mobility.¹ The Company operates primarily under the Couche-Tard, Circle K, and Holiday Stationstores banners.²

Business Segments and Revenue Streams

Couche-Tard’s business is structured around two principal revenue-generating activities: the sale of road transportation fuel and the sale of in-store merchandise and services. The economic drivers of these two segments are fundamentally different and central to understanding the Company’s strategy.

For the fiscal year ended April 28, 2024 (FY2024), road transportation fuel sales constituted approximately 74% of total revenues.³ However, due to the pass-through nature of fuel costs and relatively thin margins, this segment contributed only about 48% of the Company’s total gross profit.³ This highlights the high-volume, low-margin nature of the fuel business.

Conversely, merchandise and services accounted for roughly 25% of FY2024 revenues but generated approximately 52% of total gross profit.³ This segment, which includes tobacco products, beverages, fresh food, snacks, and car wash services, is the primary profit engine of the company. The significant disparity between the revenue and gross profit contributions of the two segments underscores the core business model: leveraging fuel sales to drive high-frequency customer traffic to its highly profitable in-store offerings. This “profit-in-the-box” model is predicated on the idea that the true value is captured inside the convenience store, not at the fuel pump. The Company’s mission, “to make our customers’ lives a little easier every day,” reflects this focus on convenience, with data suggesting that 80% of in-store merchandise is consumed within one hour of purchase.⁶

Geographic Footprint and Market Presence

As of April 2024, Couche-Tard’s global network encompassed approximately 16,700 stores across 31 countries and territories, employing around 149,000 people.² The business is geographically diversified, which mitigates risk from regional economic downturns.

The geographic mix of gross profit for FY2024 illustrates the importance of its key markets ⁴:

• United States: 63%
• Europe and Other Regions: 25%
• Canada: 12%

The Company has a commanding presence in its home market of Canada and operates in 46 of the 50 U.S. states.⁴ Through a series of strategic acquisitions, it has also established a leading market share across numerous countries in Scandinavia, the Baltics, Ireland, and Poland, and recently expanded into Germany, Belgium, the Netherlands, and Luxembourg.³

Store Mix: Company-Operated vs. Franchise

Couche-Tard’s network is predominantly composed of company-operated stores. This model provides the Company with direct control over store operations, branding, product assortment, and the implementation of strategic initiatives. This control is particularly crucial for complex, system-wide rollouts such as the “Fresh Food, Fast” program and the “Inner Circle” loyalty platform.

In addition to its core company-operated network of over 14,500 sites, Couche-Tard has an international presence through more than 2,100 licensed Circle K stores in regions like Asia and the Middle East.⁵ This licensing model allows for brand expansion and the generation of high-margin royalty income with minimal capital investment, providing a low-risk avenue for entering new markets. The Company’s decentralized management structure is a key operational strength, empowering regional leaders to tailor store offerings to local tastes and market conditions, which is particularly effective in managing a vast and diverse global network.⁶ This approach fosters an entrepreneurial culture and allows for more agile and efficient integration of acquired businesses.

III. Industry Dynamics and Competitive Positioning

Couche-Tard operates within the global convenience and fuel retail industry, a sector characterized by intense competition, ongoing consolidation, and significant structural shifts driven by technology and changing consumer behavior.

Industry Structure, Trends, and Outlook

The convenience store industry, particularly in the United States, remains highly fragmented. Despite being one of the largest operators, Couche-Tard holds only an approximate 5% market share in the U.S..⁵ This fragmentation presents a substantial and continuing opportunity for growth through consolidation, a core pillar of the Company’s strategy. Smaller, independent operators often lack the scale, capital, and technological sophistication to compete effectively, making them prime acquisition targets.⁸

Several powerful trends are reshaping the industry landscape:

• The Rise of Foodservice: The most significant trend is the pivot from traditional convenience items to higher-quality prepared foods and beverages. Foodservice has now surpassed tobacco as the largest in-store sales category for the industry.¹⁰ This shift is transforming convenience stores into viable competitors for quick-service restaurants (QSRs), attracting new customer demographics and driving higher-margin sales.¹⁰
• Technological Integration: Retailers are increasingly investing in technology to enhance the customer experience and improve operational efficiency. Key areas of investment include loyalty programs to drive repeat business, mobile apps for ordering and payment, and self-checkout solutions to reduce labor costs and wait times.⁸
• The Electric Vehicle (EV) Transition: The long-term global shift toward electric vehicles represents the most profound structural challenge to the industry’s traditional business model. While the pace of adoption varies by region, with Europe leading North America, the eventual decline in demand for gasoline threatens the primary traffic driver for many locations.³ This forces operators to rethink their forecourt strategy, investing in EV charging infrastructure and redesigning the in-store experience to cater to customers with longer dwell times.¹³

The EV transition, while a significant threat, may also serve as a catalyst for further industry consolidation. The substantial capital investment required to install and operate high-speed charging stations is likely beyond the reach of many smaller, independent operators. This creates a scenario where well-capitalized players like Couche-Tard can gain a competitive advantage, potentially accelerating market share gains as less-capitalized rivals are unable to adapt to the changing mobility landscape.

Competitive Landscape and Moat

Couche-Tard competes against a diverse set of players, including other large convenience store chains, major oil companies, and an array of retailers from adjacent sectors.³

• Direct Competitors: Key global and national rivals include 7-Eleven (owned by the Japanese conglomerate Seven & i Holdings) and, in the U.S., regional powerhouses like Casey’s General Stores, Wawa, and Sheetz, which are particularly strong in foodservice.⁹
• Indirect Competitors: The competitive set is broadening to include QSRs, coffee shops, dollar stores, and grocery stores that are increasingly offering convenience-oriented products and services.¹³

Couche-Tard’s primary competitive moat is its massive scale. This scale confers several distinct advantages:

• Purchasing Power: The ability to procure fuel and merchandise on a global scale provides significant cost advantages over smaller competitors.
• Logistical Efficiency: A sophisticated, global supply chain allows for optimization of fuel sourcing and in-store product distribution, which is critical for managing margins.
• Cost of Capital: An investment-grade credit rating and strong balance sheet provide access to cheaper capital, a crucial advantage in a capital-intensive, acquisition-driven industry.⁶

Furthermore, the Company’s decades of experience in acquiring and successfully integrating other chains is a core competency that is difficult to replicate. This “M&A machine” has been the engine of its growth and represents a durable competitive advantage.

Fuel Margins and EV Impact

Historically, fuel margins have been a source of earnings volatility. However, in recent years, they have remained surprisingly resilient and, at times, have expanded during periods of crude oil price volatility.¹⁶ This resilience is partly attributable to the Company’s advanced fuel management and supply chain optimization capabilities.

The long-term threat of EV adoption is being addressed proactively. Couche-Tard is leveraging its strong European presence, where EV penetration is highest, as a laboratory for its e-mobility strategy. As of 2024, its European network included over 2,600 EV charging points, including chargers for heavy trucks.³ The strategy in North America is in its earlier stages but follows the same logic: build out a network of fast chargers to capture the next generation of mobility customers and convert their longer charging dwell times into higher-margin in-store sales of food and beverages.¹⁹

IV. Financial Performance Analysis (Fiscal 2020-2024)

A five-year review of Alimentation Couche-Tard’s financial performance reveals a company that has demonstrated resilience through macroeconomic cycles, consistent profitability, and disciplined financial management. The analysis covers fiscal years 2020 through 2024, with fiscal years ending on the last Sunday in April.

Table 1: 5-Year Financial Summary (Fiscal 2020-2024)

(All figures in millions of U.S. Dollars, except per-share data and ratios)

Metric	FY 2020	FY 2021	FY 2022	FY 2023	FY 2024
Total Revenue	$54,132.4	$45,760.1	$62,809.9	$71,856.7	$69,263.5
Merchandise Revenue	$14,666.2	$15,873.0	$16,804.8	$17,535.9	$17,535.9
Fuel Revenue	$38,699.3	$29,405.3	$45,382.2	$53,616.4	$51,023.2
Gross Profit	$9,734.7	$9,921.6	$11,048.8	$12,052.1	$12,097.9
Gross Margin %	18.0%	21.7%	17.6%	16.8%	17.5%
EBITDA	$4,525.8	$5,060.5	$5,134.9	$5,714.2	$5,970.3
EBITDA Margin %	8.4%	11.1%	8.2%	8.0%	8.6%
Operating Income (EBIT)	$3,162.5	$3,675.6	$3,678.5	$4,232.0	$3,810.2
Net Earnings	$2,353.6	$2,705.5	$2,683.3	$3,090.9	$2,729.7
Diluted EPS ($)	$2.09	$2.44	$2.52	$3.06	$2.81
Total Assets	$25,679.5	$28,394.5	$27,858.7	$29,049.2	$36,448.3
Total Debt	$7,700.0	$6,400.0	$6,600.0	$5,889.0	$12,987.4
Shareholders’ Equity	$10,066.6	$12,180.9	$12,949.0	$12,564.5	$14,284.0
ROE %	24.8%	24.3%	21.4%	24.4%	20.0%
ROIC %	12.6%	15.9%	15.4%	17.5%	12.4%
Net Debt / EBITDA	1.60x	1.32x	1.28x	0.88x	2.21x

Sources: Fiscal 2020-2024 Annual Reports & Financial Statements.⁵ Note: EBITDA and ROIC are non-IFRS measures calculated based on company disclosures. Net Debt / EBITDA ratio for FY2024 reflects debt taken on for the TotalEnergies acquisition which closed in Q4 FY2024.

Revenue and Same-Store Sales Growth

Couche-Tard’s total revenue is heavily influenced by the volatility of global fuel prices. The sharp decline in revenue in FY2021 to $45.8 billion was primarily a result of the collapse in fuel prices and volumes during the COVID-19 pandemic.²⁶ The subsequent rebound to a peak of $71.9 billion in FY2023 was driven by the recovery and surge in fuel prices.²⁵ This volatility underscores why top-line revenue is not the most reliable indicator of the Company’s underlying operational health.

A more insightful metric is same-store merchandise revenue growth, which strips out the effects of fuel price changes and new store openings. The Company demonstrated remarkable strength during the pandemic, with same-store merchandise revenues increasing 5.6% in the U.S., 6.1% in Europe, and 9.5% in Canada in FY2021, as consumers consolidated shopping trips and increased basket sizes.²⁶ Performance has since normalized, with recent quarters showing modest declines in the U.S. against tough prior-year comparisons, but continued positive growth in Canada and Europe, highlighting the benefits of geographic diversification.⁵

Margin Evolution and Profitability

The Company’s profitability has been robust and consistent. Gross margins on merchandise are stable and high, typically ranging from 33% to 35% in the U.S. and even higher in Europe.¹⁶ Fuel gross margins, while lower per unit, have been a source of positive surprise. The Company has effectively used its scale and supply chain expertise to manage fuel margins, which have remained healthy even amid market volatility.¹⁶

Net earnings attributable to shareholders have shown a strong upward trend over the five-year period, growing from $2.4 billion in FY2020 to a peak of $3.1 billion in FY2023 before moderating to $2.7 billion in FY2024.²⁰ The performance during the pandemic in FY2021 was particularly noteworthy; despite a 15.5% drop in revenue, net earnings increased by 15.0%.²⁶ This counter-intuitive result demonstrates the resilience of the business model, where expanding fuel margins and strong in-store sales can more than offset lower fuel volumes and prices.

Returns on Capital

Couche-Tard has a long history of generating high returns on capital, a hallmark of a disciplined and efficient operator. Return on Equity (ROE) has consistently been strong, averaging over 22% during the five-year period.²⁷ Return on Invested Capital (ROIC), a critical measure of how effectively the company deploys capital into its operations and acquisitions, has also been impressive, peaking at 17.5% in FY2023.¹⁷ The slight decline in ROE and ROIC in FY2024 is attributable to the large TotalEnergies acquisition, which added significant capital to the balance sheet late in the fiscal year before its full earnings potential could be realized.

Free Cash Flow and Financial Flexibility

Strong and predictable free cash flow generation is a cornerstone of Couche-Tard’s financial profile, providing the resources to fund its ambitious acquisition strategy and return capital to shareholders.⁶ The Company’s disciplined approach to capital expenditures and working capital management supports this robust cash generation.

The balance sheet is managed prudently. The Company maintains an investment-grade credit rating and has a well-established pattern of increasing leverage to fund major acquisitions and then rapidly de-levering using its strong operating cash flows. This was evident as the Net Debt-to-EBITDA ratio fell from 1.60x in FY2020 to a very conservative 0.88x by the end of FY2023.¹⁷ The ratio increased to 2.21x at the end of FY2024, reflecting the debt incurred to finance the acquisition of the TotalEnergies assets, a level that remains well within the Company’s historical operating range.⁵

V. Growth Strategy and Strategic Initiatives

Couche-Tard’s forward-looking strategy is encapsulated in its “10 for the Win” five-year plan, a comprehensive roadmap designed to navigate the evolving retail landscape and drive significant shareholder value. This plan marks a strategic evolution, balancing the Company’s traditional strength in M&A with a heightened focus on unlocking organic growth potential.

“10 for the Win” Strategic Plan

Announced in October 2023, the “10 for the Win” strategy sets an ambitious financial target: to grow the Company’s adjusted EBITDA from $5.8 billion in FY2023 to $10 billion by FY2028.²⁸ This planned $4.2 billion increase in EBITDA is expected to be driven by a combination of acquisitions and organic initiatives, broken down as follows ²⁹:

• Mergers & Acquisitions: $1.8 billion (including $700 million from the TotalEnergies deal and $1.1 billion from new opportunities).
• Cost Efficiencies (“Fit to Serve”): $800 million.
• Organic Growth Initiatives: Approximately $800 million, derived from winning in food, beverages (“thirst”), private brands, and loyalty.
• Fuel Initiatives: $450 million.
• Network Growth (New Builds): $400 million.

This plan signals a more balanced approach to growth. While M&A remains the single largest contributor, the significant emphasis on organic growth and cost savings indicates a strategy to build a more self-sufficient and resilient business model, less reliant on the availability of large, accretive acquisition targets.

Acquisition Strategy and Integration

M&A remains at the heart of Couche-Tard’s value creation model. The Company is a proven consolidator with a disciplined process for identifying, acquiring, and integrating businesses, targeting synergies that typically range from 30% to 60% of a target’s pre-acquisition EBITDA.⁴

The most significant recent transaction was the acquisition of approximately 2,200 retail sites from TotalEnergies in Germany, the Netherlands, Belgium, and Luxembourg, which closed in January 2024.³⁰ This deal, valued at approximately €3.1 billion (or an 8.0x EBITDA multiple), is transformative for Couche-Tard’s European presence, establishing a strong foothold in some of Europe’s largest economies.³¹ The Company has an ambition to unlock approximately $187 million (€120 million) in synergies from this acquisition over five years.³

The pursuit of food-centric chains, such as the 2024 acquisition of GetGo Café + Market, is another key element of the M&A strategy. These acquisitions are not just about adding stores, but about acquiring talent, supply chains, and operational expertise in foodservice to accelerate the Company’s own organic food initiatives across its broader network.³²

Organic Growth Initiatives

Under the “10 for the Win” framework, Couche-Tard is aggressively pursuing several organic growth levers to enhance in-store profitability.

• Fresh Food and Private Label: The “Fresh Food, Fast” program is a top priority, aiming to establish a best-in-class, convenient food offering. The program is now available in over 5,800 locations globally.³ The strategic goal is to elevate the food program in North America, where it currently accounts for about 11% of sales, closer to the 20-25% benchmark achieved in its European operations.³⁴ The Company is also substantially expanding its private label portfolio, offering products from wine to snacks to provide value for customers and capture higher margins.³
• Digital Transformation and Loyalty: A cornerstone of the customer strategy is the rollout of the “Inner Circle” loyalty program in the United States. Launched in 2023, this free program provides fuel and food rewards and enables personalized marketing through data analytics. As of mid-2024, the program was active in over 4,000 stores with more than six million enrolled members.³³
• Network Expansion: The Company is also committed to organic network growth, with an ambition to build 500 new stores over a five-year period.³⁵

International Expansion

While the primary focus for consolidation remains the fragmented U.S. market, Couche-Tard maintains a long-term ambition for further international expansion, particularly in Asia.⁶ The bold, though ultimately abandoned, 2024-2025 bid to acquire 7-Eleven’s parent company, Seven & i Holdings, for a reported $47 billion, underscores the scale of this ambition.³⁶ While that specific transaction did not proceed, it signals management’s confidence and willingness to pursue transformative deals that could reshape the global convenience landscape.

VI. Capital Allocation and Shareholder Returns

Couche-Tard’s management team adheres to a disciplined and flexible capital allocation framework designed to maximize long-term shareholder value. The strategy prioritizes reinvestment in the business for growth, balanced with consistent returns of capital to shareholders through dividends and share repurchases.

Capital Allocation Priorities and Track Record

The primary use of capital is strategic reinvestment to drive growth. This is allocated between:

1. Mergers and Acquisitions (M&A): As the main engine of growth, acquisitions receive the largest share of capital over time.
2. Organic Investments: This includes capital expenditures for new store builds, store remodels (“raze-and-rebuilds”), and investments in strategic initiatives like technology upgrades, EV chargers, and the rollout of the “Fresh Food, Fast” program.

The Company’s track record demonstrates a prudent approach to this allocation, consistently generating strong returns on capital employed.⁶

Acquisition Discipline

A key element of the Company’s success has been its disciplined approach to M&A. Management has a long history of successfully integrating acquired assets and realizing significant cost and revenue synergies. The Company typically targets synergies equivalent to 30% to 60% of a target’s pre-closing EBITDA, a testament to its operational integration capabilities.⁴ The valuation paid for the TotalEnergies assets, at an approximate 8.0x EBITDA multiple, appears reasonable for a strategic entry into major new European markets, reflecting this disciplined approach.³¹

Shareholder Returns

When attractive M&A opportunities are not available at reasonable valuations, the Company pivots to returning excess capital to its shareholders. This is achieved through two primary mechanisms:

• Dividends: Couche-Tard has a strong and consistent record of dividend growth. The dividend increased at a compound annual growth rate (CAGR) of approximately 25% between 2012 and 2022.⁶ The Company announced a further 26.9% increase to its annual dividend in fiscal 2023.¹⁷ The current dividend payout ratio remains modest, providing substantial capacity for future increases.²⁷
• Share Repurchases: The Company maintains a Normal Course Issuer Bid (NCIB) and actively repurchases its own shares when management believes they represent an attractive investment.³⁵ Share buybacks are often accelerated in periods following the abandonment of a major acquisition, such as after the failed bid for French retailer Carrefour in 2021, demonstrating a commitment to not letting capital sit idle.²

This flexible capital allocation framework functions as a “flywheel.” In environments ripe for consolidation, capital is directed towards value-accretive M&A. In periods where deal flow is slow or valuations are unattractive, the capital pivots towards share repurchases. This opportunistic approach ensures that capital is consistently deployed towards activities that enhance shareholder value, while avoiding the “deal fever” that can lead to value-destructive transactions.

VII. Recent Developments and Challenges (2023-2025)

In the recent period, Couche-Tard has been focused on executing major strategic initiatives while navigating a challenging macroeconomic environment and managing a significant leadership transition.

Major Strategic Initiatives

The most impactful recent development has been the acquisition and ongoing integration of the European retail assets from TotalEnergies. The transaction, which added approximately 2,200 sites in Germany, the Netherlands, Belgium, and Luxembourg, officially closed in January 2024.³⁰ The immediate operational focus is on integrating these new networks into Couche-Tard’s European operations and beginning the process of realizing the targeted $187 million in synergies over the next five years.³ This integration is a complex, multi-year undertaking that will be a key focus for management. Concurrently, the Company continues to optimize its portfolio through smaller transactions, including the divestiture of 35 U.S. stores to Majors Management, likely to satisfy regulatory conditions or streamline its network.³⁹

Navigating the Macroeconomic Environment

The period from 2023 to 2025 has been characterized by persistent inflation, supply chain disruptions, and tight labor markets across Couche-Tard’s key geographies.¹⁶ Management has demonstrated strong operational execution in this environment. Through its “Fit to Serve” cost-efficiency program, a key pillar of the “10 for the Win” strategy, the Company has successfully kept its normalized expense growth below the average rate of inflation impacting its business.¹⁷ This disciplined cost control has been crucial in protecting operating margins.

The Company has also adeptly managed significant volatility in fuel prices. While sharp price movements can create headwinds for total revenue figures, Couche-Tard’s sophisticated fuel procurement and pricing strategies have allowed it to maintain healthy fuel gross margins, often capturing additional profit during periods of price dislocation.¹⁶

Management and Leadership Transition

A pivotal development for the Company’s future is the planned leadership transition announced in June 2024. Effective September 6, 2024, Brian Hannasch will retire as President and CEO, to be succeeded by the current Chief Operating Officer, Alex Miller.⁴⁰ Mr. Hannasch has led the Company through a decade of extraordinary growth, including the transformative acquisitions of CST Brands and Statoil Fuel & Retail, and oversaw a 400% increase in the Company’s share price during his tenure.⁴⁰ He will remain with the Company as a Special Advisor to ensure a smooth transition.⁴⁰

The selection of Alex Miller, an internal candidate with nearly 13 years at the company and deep experience leading North American operations and the global fuel business, signals a strong commitment to strategic continuity.⁴⁰ This transition appears to be a well-planned succession. The timing of this change is particularly noteworthy. Appointing an operations-focused leader like Mr. Miller at a time when the Company’s primary challenges are the complex integration of the TotalEnergies assets and the execution of the ambitious organic growth initiatives within the “10 for the Win” plan suggests a strategic shift in focus from deal-making to operational execution.

VIII. Valuation Analysis

An assessment of Alimentation Couche-Tard’s valuation involves comparing its current trading multiples to its own historical ranges and to those of its relevant peers. This analysis suggests that the Company is currently valued at a level that is reasonable, reflecting its strong fundamentals but also acknowledging the risks associated with its strategic transformation.

Historical Valuation Ranges

Over the past decade, Couche-Tard has generally traded at a trailing twelve-month (TTM) Price-to-Earnings (P/E) ratio in the range of 15x to 22x, with a 10-year average of approximately 17.6x.⁴² Its Enterprise Value-to-EBITDA (EV/EBITDA) multiple has typically traded in a range of 9.5x to 13.0x over the last five years.⁴³

As of mid-2025, Couche-Tard’s TTM P/E ratio stands at approximately 19-20x, and its TTM EV/EBITDA multiple is approximately 11.2x.²⁷ These figures indicate that the Company is trading within its historical valuation bands, suggesting that the stock is neither significantly overvalued nor undervalued relative to its own recent history.

Peer Comparison Analysis

A comparison with key industry peers provides essential context for Couche-Tard’s valuation. The most relevant publicly traded peers are Casey’s General Stores, Inc. (CASY), a U.S.-focused operator renowned for its foodservice program, and Seven & i Holdings Co., Ltd. (3382.T), the Japanese parent company of the global 7-Eleven chain.

Table 2: Valuation Multiples: Peer Comparison

(Data as of mid-2025, TTM basis. Market Cap and EV in USD billions)

Metric	Alimentation Couche-Tard (ATD.TO)	Casey’s General Stores (CASY)	Seven & i Holdings (3382.T)
Market Cap	~$48.2B	~$19.4B	~$34.3B
Enterprise Value (EV)	~$65.3B	~$22.1B	~$51.7B
EV/Revenue	0.9x	1.4x	0.7x
EV/EBITDA	10.8x	18.4x	8.1x
P/E Ratio	20.5x	35.7x	24.8x
Revenue Growth (LTM)	3.0%	7.3%	-9.0%
EBITDA Margin (LTM)	8.2%	7.6%	8.3%
ROE (TTM)	18.3%	16.8%	4.5%

Sources:.²⁷ Note: Financial data is subject to currency conversions and may vary slightly between sources.

The peer comparison reveals a clear valuation hierarchy. Couche-Tard trades at a significant valuation discount to Casey’s on both P/E and EV/EBITDA multiples. Conversely, it trades at a premium to Seven & i Holdings on an EV/EBITDA basis.

This valuation gap can be largely explained by the market’s perception of each company’s strategic positioning and growth prospects. Casey’s commands a premium multiple because it has a highly successful and proven foodservice model, which generates strong margins and is seen as the future of the industry.⁹ The market appears to be rewarding Casey’s for its established leadership in this high-growth area.

Couche-Tard’s valuation reflects its status as a highly profitable and efficient operator that is still in the process of transforming its business model. The discount relative to Casey’s suggests that investors are not yet fully convinced of the Company’s ability to execute its own pivot to foodservice and are applying a lower multiple to its more fuel-dependent earnings stream. Should Couche-Tard demonstrate sustained success in its “Fresh Food, Fast” and loyalty initiatives, there is potential for this valuation gap to narrow, which would represent a significant source of potential upside for the stock.

Seven & i Holdings trades at the lowest EV/EBITDA multiple, which may be attributable to its conglomerate structure, lower returns on equity, and recent negative revenue growth.⁴⁸

IX. Risk Assessment

An investment in Alimentation Couche-Tard involves exposure to a range of business, operational, and financial risks that could materially affect the Company’s performance. These risks are detailed in the Company’s regulatory filings and are critical for investors to consider.³

Key Business Risks

• Fuel Demand and Pricing Volatility: This is the most significant risk factor. The long-term, secular decline in demand for road transportation fuel due to the global transition to electric vehicles poses a fundamental threat to the Company’s largest revenue stream. In the short-to-medium term, the business is also exposed to the high volatility of fuel prices and gross margins, which are influenced by geopolitical events, global supply and demand, and economic conditions, all of which are outside the Company’s control.³
• Competition and Market Share Pressures: The convenience retail industry is intensely competitive. Couche-Tard competes not only with other convenience store chains but also with a broadening array of retailers, including QSRs, grocery stores, dollar stores, and pharmacies, all of which are vying for the same consumer spending on convenience items.³
• Regulatory and Legislative Risks: The Company operates in a highly regulated environment. Key regulatory risks include potential restrictions or increased taxation on tobacco and other nicotine products, which remain a highly profitable category. In FY2024, these products accounted for approximately 37% of merchandise revenue and 20% of total company gross profit, making this a significant exposure.³ Other regulatory risks pertain to food safety, labor laws, data privacy, and environmental regulations governing fuel storage and handling.³
• Integration Risks from Acquisitions: With M&A being a core component of its growth strategy, Couche-Tard is continually exposed to integration risk. The failure to successfully integrate the operations, systems, and cultures of acquired companies could result in an inability to achieve projected synergies, leading to higher-than-expected costs, customer disruption, and potential impairment of goodwill.³
• Changes in Customer Behavior: The Company’s success depends on its ability to adapt to rapidly changing consumer preferences. A failure to innovate and meet evolving demands for digital engagement, loyalty rewards, delivery services, and healthier, fresher food options could lead to a loss of market share.³ The transition to a foodservice-led model introduces new operational risks related to supply chain management, food safety, and spoilage that are more complex than in the traditional convenience model.
• Economic Sensitivity: While the business has defensive characteristics, it is not immune to macroeconomic conditions. A significant economic downturn could negatively impact consumer discretionary spending and reduce travel, leading to lower sales of both fuel and in-store merchandise.³
• Information Technology and Cybersecurity: The Company’s reliance on extensive IT systems for point-of-sale, supply chain management, and loyalty programs creates a vulnerability to system failures, disruptions, and cybersecurity threats. A significant data breach could result in financial losses, regulatory fines, and severe reputational damage.³

X. Management and Governance Analysis

The quality of a company’s leadership and the soundness of its governance structure are critical determinants of its long-term success. Couche-Tard benefits from an experienced management team with a deep industry background and a governance structure that has historically supported its strategic objectives.

Management Team and Strategic Vision

Couche-Tard’s leadership is characterized by stability and a long-term vision, heavily influenced by its founders. Co-founder Alain Bouchard serves as Executive Chairman of the Board and remains a guiding force in the Company’s strategic direction.¹ His entrepreneurial spirit and disciplined approach to growth are deeply embedded in the corporate culture.¹

The Company is currently undergoing a carefully planned CEO succession. Brian Hannasch, who presided over a period of immense growth and successful major acquisitions, is retiring in September 2024.⁴⁰ His successor, Alex Miller, is a long-tenured company insider who previously served as Chief Operating Officer. Mr. Miller’s extensive background in operations and the global fuel business suggests a focus on execution and continuity of the current “10 for the Win” strategy.⁴⁰ The management team is considered experienced, with an average tenure of 2.1 years, reflecting a blend of long-serving leaders and new executives brought in to drive strategic initiatives.⁵²

Corporate Governance and Shareholder Alignment

Couche-Tard’s governance framework includes a Board of Directors with a majority of independent members and established committees for Audit and Human Resources & Corporate Governance, which oversee financial reporting, executive compensation, and succession planning.⁵³ The Company has a comprehensive Code of Conduct and policies governing insider trading and public disclosure.⁵³

A key feature of Couche-Tard’s governance is its dual-class share structure. The Class A multiple-voting shares, primarily held by the four founders, carry 10 votes per share, while the Class B subordinate-voting shares carry one vote per share. As of July 2025, Mr. Bouchard alone controlled approximately 13% of the total shares outstanding, granting him significant influence over shareholder votes.³⁵ This structure, while potentially a concern for some investors as it can limit the influence of minority shareholders, has been a crucial factor in the Company’s historical success. It has provided the long-term stability and insulation from short-term market pressures necessary for management to execute its bold, multi-year acquisition and growth strategies.

Communication and Transparency

Couche-Tard maintains a high level of transparency with the investment community. It provides detailed financial results on a quarterly basis, hosts regular conference calls with analysts, and publishes comprehensive investor presentations that outline its strategy and performance.⁴ This consistent and detailed communication allows investors to effectively monitor the Company’s progress against its stated goals.

XI. Synthesis and Key Investment Considerations

Alimentation Couche-Tard presents a compelling but complex investment case, centered on the ability of a world-class management team to navigate a profound industry transformation. The Company has established itself as an elite operator and a master consolidator in the global convenience retail sector. Its investment appeal is rooted in a combination of structural advantages and proven execution capabilities.

The bullish perspective is underpinned by several key factors:

• Scale and Competitive Moat: Couche-Tard’s immense global scale provides durable cost advantages in procurement and logistics that are difficult for smaller competitors to replicate.
• Proven M&A Playbook: The Company has a long and successful track record of acquiring and integrating businesses, creating significant value for shareholders. The fragmented nature of the industry, particularly in the U.S., offers a continued runway for this strategy.
• Disciplined Capital Allocation: Management has consistently demonstrated a disciplined and shareholder-friendly approach to capital allocation, flexibly shifting between M&A, organic investment, and shareholder returns to maximize value.
• Operational Excellence: The ability to maintain strong profitability and returns on capital through various economic cycles, and to effectively manage challenges like inflation and fuel volatility, speaks to a high level of operational expertise.
• Reasonable Valuation: The stock trades at valuation multiples that are in line with its historical averages and at a discount to peers that have already successfully executed the food-centric model Couche-Tard is pursuing.

Conversely, the bearish perspective highlights significant long-term risks and execution hurdles:

• Structural Headwinds from EV Adoption: The inevitable long-term decline in gasoline demand represents a fundamental threat to the Company’s primary traffic driver and largest revenue source. While the Company is investing in EV charging, the profitability and traffic-driving potential of this new model are still unproven at scale in North America.
• Execution Risk in Strategic Pivot: The shift to a foodservice-led model is operationally complex and carries significant execution risk. It requires new supply chains, different labor skills, and management of food waste, fundamentally changing the business’s risk profile.
• M&A and Integration Challenges: As the Company grows larger, finding and executing transformative, value-accretive acquisitions becomes more difficult. The integration of the massive TotalEnergies network will be a major test of its capabilities.
• Secular Decline of Tobacco: The gradual decline of the highly profitable tobacco category creates a significant margin headwind that the nascent food business must overcome.

Ultimately, an investment in Couche-Tard is a vote of confidence in management’s ability to execute a complex, multi-year strategic pivot. The Company is not passively waiting for the future; it is actively shaping it through strategic acquisitions, investments in new capabilities, and a clear-eyed plan for growth. The path forward is not without significant challenges, but the Company’s historical track record of disciplined execution and value creation suggests it is well-equipped to navigate the journey. Investors must weigh the tangible strengths of this elite operator against the undeniable uncertainties of the industry’s long-term evolution.

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