Couche-Tard Posts Q1 Profit Growth While Lululemon Slashes 2026 Outlook

Adjusted diluted earnings per share hit $0.90 at Alimentation Couche-Tard in the first quarter of fiscal 2027, slightly ahead of expectations and underscoring the defensive strength of convenience retail when household budgets tighten. The Quebec-based operator benefits from what the industry calls "sticky spend", tobacco, fuel, packaged snacks, purchases consumers make even when they're cutting back elsewhere.

The divergence sharpens

Lululemon Athletica, meanwhile, revised its full-year revenue growth forecast down to 8-9%, marking a retreat from earlier double-digit projections. North American comparable store sales fell roughly 12% in the most recent quarter, driven by what management described as "newness gaps" and colour palette missteps in core leggings lines. The brand is testing the limits of consumer loyalty in a year when the mortgage renewal cliff continues to squeeze disposable income among its core demographic.

The contrast reflects a broader pattern visible across Canadian retail in 2026: essentials hold, aspirationals stumble. Bank of Canada sentiment surveys this year show household spending shifting toward value-oriented purchases and small luxuries over high-ticket apparel. Couche-Tard sells into the former category. Lululemon sells into the latter.

The shadow of Seven & i

For Couche-Tard shareholders, quarterly results are currently secondary to the company's pursuit of Seven & i Holdings, parent of 7-Eleven. The potential acquisition would be the largest-ever foreign takeover of a Japanese firm and would transform Couche-Tard into a global convenience operator with over 100,000 locations. The company holds approximately $6.5 billion in available liquidity as negotiations continue, signalling management's willingness to deploy capital aggressively even as economic uncertainty persists.

Lululemon's revised outlook, by contrast, masks explosive growth in China, often exceeding approximately 20-30% year-over-year, suggesting the brand isn't dying but migrating its growth engine. The question for investors is whether international expansion can offset sustained North American stagnation, or whether the brand has reached saturation in its home markets faster than expected.