It’s not surprising that Alimentation Couche-Tard (CA:ATD) reported rising profits on June 28. It remains one of the best stocks to own on the TSX.

Unfortunately, other Canadian stocks weren’t so lucky in the past week, with three well-known companies delivering quarterly losses with their latest results.

The S&P/TSX Composite Index is up 2.4% in 2023, a fraction of the 16.4% return of the S&P 500 Index south of the border. While Couche-Tard’s healthy results help cover up some of the 229-constituent TSX’s weakness, the losses should cause investors to rethink their Canadian equity weighting relative to the U.S. and overseas.

Circle K Continues to Grow

Couche-Tard’s fourth-quarter earnings were $698.0 million (all figures in U.S. dollars unless noted otherwise), 21.8% higher than a year ago. Its total merchandise and service revenues were $4.2 billion, 11.0% higher than Q4 2022.

Its overall merchandise same-store sales growth in the U.S. was 3.3%, 100 basis points higher than last year. Merchandise same-store sales growth in Canada was 5.9%, 580 bp higher than Q4 2022. The only blemish: Europe and its other regions saw a 320 bp decline to 3.0%.

In 2023, Couche-Tard’s total merchandise and service revenues were $17.3 billion, 4.1% higher than a year earlier. On the bottom line, its adjusted net earnings were $3.2 billion, 13.8% higher than in 2022. Due to share repurchases, it increased its earnings per share by 20.0% to $3.12 from $2.60.

“We are pleased to announce an exceptional fiscal year and strong fourth-quarter results. Even more so, we are proud to share that we have hit our 5-year Double Again strategic goal. This is a particularly amazing achievement as during three of those five years we faced historic global challenges including a pandemic, inflation, labor and supply shortages, and war bordering our European markets,” stated CEO Brian Hannasch in the company’s Q4 2023 press release.

Smart Acquirer

Couche-Tard is known for making smart acquisitions.

In March, it announced it would buy TotalEnergies’ convenience store and gas station business for $3.4 billion. It expects to close that acquisition by the end of the year.

Despite making an acquisition of this size, it plans to continue its M&A strategy.

“Our balance sheet is robust. We’ve got plenty of dry powder. And we’ve got an organization that’s capable. So we’re ready to do more and just need the right opportunities at the right values,” BNN Bloomberg reported Hannasch’s comments from its Q4 2023 conference call.

ATD stock is up nearly 13% year-to-date, considerably better than the TSX. It scores a respectable 77.07 on Fintel’s Quality dashboard, the proprietary scoring model that identifies high quality companies, based on cash generating efficiencies.

Hat Trick

They say “good things come in threes.” In hockey, three goals in a game are a “hat trick.” But there was little good in the lousy earnings reports last week from Couche-Tard’s index co-constituents. BlackBerry (CA:BB) and Indigo Books and Music (CA:IDG) reported their quarterly results on June 28. Corus Entertainment (CA:CJR.B) reported its earnings on June 29.

On Fintel’s Quality Score dashboard, IDG stock scores 65.65. Corus score sits at 29.58. BB stock scores even lower, at 23.96.

On a GAAP basis, BlackBerry lost $11.0 million, Indigo was CAD$49.8 million in the red, and Corus lost a whopping CAD$495.1 million in the quarter.

The trio lost $424 million in the quarter (converted to U.S. dollars at CAD$1 = US$0.76) combined, $1.1 billion worse than Couche-Tard.

Breaking down the results on a non-GAAP basis, BlackBerry had the best report of the three; it earned $35.0 million on an adjusted basis, up from a $31.0 million loss a year earlier, on revenue of $373.0 million. However, $218 million of that revenue was from selling its patent portfolio. Excluding the patent sale, its revenues fell 7.7% year-over-year, to $155 million, from $168 million a year earlier.

Color Indigo Red

Indigo reported its Q4 2023 results. It’s not been a good year for the book and lifestyle retailer. Its revenue in 2023 was CAD$1.058 billion, CAD$40 million lower than in 2022. The CAD$49.6 million loss was considerably worse than the $3.3 million profit a year earlier.

The company was the victim of a ransomware attack in February 2023, which materially hurt its business. However, recent news shows that Indigo founder Heather Reisman and four other members are stepping down from the board, putting the company’s corporate governance in disarray when it can ill afford a misstep.

If you need evidence of that disarray, look no further than director Chika Stacy Oriuwa’s statement that she resigned “because of her loss of confidence in board leadership and because of mistreatment.” The company didn’t disclose why the other three directors — Frank Clegg, Howard Grosfield and Anne Marie O’Donovan — quit.

Lastly, Corus reported a CAD$495.1 million loss in Q3 2023 due to a CAD$590.0 million non-cash television goodwill, broadcast license, and other asset impairment charges.

Specifically, CAD$162.8 million was for an impairment charge against the value of its broadcast licenses in Canada; CAD$132.0 million was for impairments on its brands and trademarks, and CAD$295.2 million was for goodwill impairment.

Excluding these one-time impairments, it earned CAD$18.0 million in the third quarter, 40.3% less than its adjusted net income in Q3 2022. Its revenue in the quarter was CAD$397.3 million, 8% less than a year ago.

While the broadcaster can paper over the losses using non-GAAP accounting, it’s impossible to ignore that its accumulated deficit was CAD$2.07 billion in Q3 2023, up from CAD$1.57 billion as of Aug. 31, 2022.

Corus stock jumped on the earnings report but is down 41% year-to-date and 63% over the past 12 months.

This article originally appeared on Fintel

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