How Are Consumer Stocks Alimentation Couche-Tard (TSX:ATD) & Loblaw (TSX:L) Faring?

Summary

  • Alimentation Couche-Tard stocks have been trending on stock markets on the back of its latest quarter results release.
  • The company’s revenue for the first half of fiscal 2021 declined by almost 27 per cent year over year.
  • Loblaw Companies Limited has teamed up with tech startup Gatik and will be setting up a fleet of driverless delivery vehicles in Toronto January 2021 onwards.
  • Loblaw has also increased its quarterly dividend to 33.5 cents in the third quarter of 2020.

Consumer goods companies sector registered increased sales as panicked customers gave in into bulk buying during the initial months of the coronavirus pandemic. As a result, stocks of merchandize chains such as Alimentation Couche-Tard (TSX: ATD.B) and Loblaw Companies Limited (TSX: L) garnered increased attention on the stock markets.

However, as investors lapped up reports of potential COVID-19 vaccine and shifted to riskier stocks, some consumer stocks such as Loblaw started seeing a downward turn. Alimentation Couche-Tard stocks, on the other hand, posted a boost this month in ahead of its latest quarter result for the fiscal year of 2021.

Let’s delve into an analysis of these two consumer goods stocks.

Alimentation Couche-Tard (TSX: ATD.B)

Current Stock Price: C$ 43.05

Stocks of convenience stores chain Alimentation Couche-Tard have been trending on stock markets on the back of its latest quarter results release. It has an average share trading volume of 2.1 million in the last 10-day period and that of 1.7 million for the past month.

Alimentation Couche-Tard shares struggled in the wake of the coronavirus outbreak this year, with their value slumping significantly around March. However, the scrips managed to rebound in the following months, and they register a growth of over four per cent this year.

In the last six months, Alimentation Couche-Tard stocks climbed about two per cent in value, while they posted a loss of over four per cent in the past three months.

Shares of this Canadian retail chain jumped nearly five per cent in November. The scrips post a 52-week high of 47.49, and a low of 30.4 for the same period.

It recently entered the Asian markets with the acquisition of Hong Kong-based C-Store Network.

ALIMENTATION COUCHE-TARD Q2 FY21 RESULTS

Alimentation Couche-Tard stated in its latest quarterly report that the company’s quarterly financial results continue to endure “a meaningful impact” due to the COVID-19 pandemic. Its revenue of C$ 10.7 billion for the second quarter of fiscal 2021 was down by 22.1 per cent year over year.

Its revenue for the first half of fiscal 2021 declined by almost 27 per cent year over year.

Nonetheless, the company’s total merchandise and service revenues climbed 6.3 per cent YoY, amounting to C$ 3.8 billion, in Q2 FY21. Its same-store merchandise revenues increased by 11.4 per cent in Canada.

Alimentation Couche-Tard’s overall merchandise and service gross margin rose to 34 per cent in the latest quarter ending 11 October 2020, while it remained steady at 32.6 per cent in Canada region.

The company reported that its cash on hand at the end of the quarter stood at about C$ 6 billion.

Alimentation Couche-Tard also increased its quarterly dividend by 25 per cent, from 7 cents in the prior quarter to 8.75 cents in Q2 FY21.

Loblaw Companies Limited (TSX: L)

Current Stock Price: C$ 64.09

One of Canada's largest merchandise retailer, Loblaw has been in the news lately for its recent move to up its game in the goods delivery department. The company has teamed up with California-based autonomous tech startup Gatik to instate a fleet of driverless delivery vehicles in Toronto January 2021 onwards.

Stocks of Loblaw are currently down about four per cent year to date (YTD). Since their pandemic-triggered March lows, the shares fell about three per cent in the last six months and nearly 10 per cent in the last three months.

In November, shares of this Canadian enterprise declined by roughly three per cent. Its 52-week high stands at C$ 77, while its 52-week low is C$ 59.01.

LOBLAW COMPANIES LIMITED Q3 2020 RESULTS

Loblaw Companies recorded total revenue of C$ 15.67 billion in the third quarter ending 3 October 2020, up nearly seven per cent year-over-year. Its retail segment sales were up 7.2 per cent in the latest quarter, amounting to C$ 15.4 billion, while everyday digital sales registered a growth of 175 per cent quarter-to-date.

The company incurred a loss of about C$ 85 million in Q3 2020 due to pandemic related costs. Its operating income of C$ 718 million was up 4.1 per cent YoY.

Loblaw’s adjusted EBITDA stood at C$ 1.5 billion in the third quarter of 2020, a 2.1 per cent increase YoY.

Loblaw also announced that its quarterly dividend had been increased to 33.5 cents. It currently has a dividend yield of 2.091 per cent, as per the data available on the TMX group.

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