Dollarama a bright spot in struggling retail sector – BNN News
While retailers and grocers across Canada face shrinking margins and cash-strapped consumers, Dollarama (DOL-T 51.83 0.25 0.48%) is blowing past Street expectations with swelling margins and strong profits. Wednesday was no exception for the discount retailer. It posted a 160 basis point (a basis point is 0.01 percentage point) increase from last year on its gross marginsto 39.8 percent. It also reported a 15-percent increase in revenue from the same quarter last year to $469 million.
And it trumped analysts’ profit forecasts, reporting earnings per share of 84 cents, compared to expectations for 68 cents and 51 percent higher than the 56 cents it earned last year.
Same stores sales, which measures sales at stores open at least year and is a key metric for retailers, grew by 7.9 percent — again, beating analyst expectations.
The company also announced an increase in its quarterly dividend to 11 cents per share from 9 cents per share.
Investors bought into Dollarama after the announcement. Shares in the company ended nearly 7 percent higher on Wednesday, with the stock up more than 70 percent in the last 12 months.
Analysts remain bullish on the stock, with eight having a “buy” recommendation, four giving it a “hold” rating and only one “sell” recommendation. The average target price among analysts covering the stock is $50.35.
The discount retailer also continues to be one of the top growth stories among Canadian retailers. The company added another 52 stores in the last year and expects to launch at least another 50 this year, but could ratchet that number up to 60.
Strange Random Dollar Quote:
“I was walking down Fifth Avenue today and I found a wallet, and I was gonna keep it, rather than return it, but I thought: well, if I lost a hundred and fifty dollars, how would I feel? And I realized I would want to be taught a lesson.” – Emo Philips
- Dollarama hikes dividend as profit, sales rise (business.financialpost.com)
- Dollar Tree’s Canadian expansion plans a good sign for Dollarama (business.financialpost.com)
- Walmart’s plan to battle Target, Dollarama in Canada (thestar.com)
- Put Together a Fantastic Easter Basket for Kids at #Dollarama for Under $20 (cynchronicity.wordpress.com)
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