Dollarama (TSE:DOL) Issues Earnings Results

Dollarama (TSE:DOL) posted its quarterly earnings data on Wednesday, September 16th. The company reported C$1.29 earnings per share (EPS) for the quarter, FiscalAI reports. The firm had revenue of C$2.03 billion for the quarter. Dollarama had a return on equity of 97.52% and a net margin of 17.32%.

Here are the key takeaways from Dollarama’s conference call:

• Strong second-quarter performance: Consolidated sales rose 17.6% to more than CAD 2 billion, EBITDA increased 11% to CAD 653 million, and diluted EPS grew 11.2% to CAD 1.29.
• Canadian momentum exceeded expectations, with same-store sales up 5.4% and traffic up 3.7%; Dollarama raised its fiscal 2027 same-store sales guidance to 4%-4.5% and its net-new-store outlook to 65-75 locations.
• Dollarcity continued to deliver strong growth, including a 30.3% increase in Dollarama’s share of net earnings, while Mexico’s network expanded to 21 stores and customer reception remained encouraging.
• Australia’s transformation remains a near-term drag, with the lower-priced merchandise transition expected to weigh more heavily on second-half sales and integration costs expected to increase; the segment recorded approximately CAD 25 million in losses at midyear.
• Higher oil prices, freight and supply-chain costs are expected to pressure Canadian margins from the third quarter onward, although management maintained its full-year gross-margin guidance of 45.0%-45.5% and said it would prioritize operational mitigation before pricing changes.

Dollarama Stock Performance

DOL stock traded down C$0.66 during trading hours on Wednesday, reaching C$185.37. The stock had a trading volume of 636,082 shares, compared to its average volume of 712,875. Dollarama has a fifty-two week low of C$163.25 and a fifty-two week high of C$209.96. The stock has a market capitalization of C$49.75 billion, a PE ratio of 37.22, a price-to-earnings-growth ratio of 1.93 and a beta of 0.34. The stock has a 50-day simple moving average of C$182.29 and a 200 day simple moving average of C$180.38. The company has a debt-to-equity ratio of 399.63, a current ratio of 1.55 and a quick ratio of 0.08.

Dollarama Dividend Announcement

The company also recently declared a quarterly dividend, which will be paid on Friday, November 6th. Shareholders of record on Friday, November 6th will be given a dividend of $0.12 per share. This represents a $0.48 annualized dividend and a yield of 0.3%. The ex-dividend date of this dividend is Friday, October 9th. Dollarama’s dividend payout ratio is 9.07%.

Analyst Upgrades and Downgrades

Several research analysts recently weighed in on DOL shares. Desjardins reduced their price objective on shares of Dollarama from C$215.00 to C$210.00 and set a “buy” rating on the stock in a research note on Thursday, September 17th. TD lowered their price objective on shares of Dollarama from C$227.00 to C$217.00 and set a “buy” rating for the company in a research report on Thursday, September 17th. UBS Group decreased their target price on Dollarama from C$202.00 to C$190.00 in a research note on Monday, September 14th. Scotiabank cut their price objective on Dollarama from C$220.00 to C$210.00 in a report on Monday, September 21st. Finally, Stifel Nicolaus lifted their price target on shares of Dollarama from C$190.00 to C$215.00 in a research note on Friday, June 12th. Ten research analysts have rated the stock with a Buy rating and one has issued a Hold rating to the company. According to data from MarketBeat.com, the stock currently has an average rating of “Moderate Buy” and an average price target of C$215.12.

Dollarama Company Profile

Dollarama Inc is a Canada-based company principally engaged in operating discount retail stores. The company provides a broad range of everyday consumer products, general merchandise, and seasonal items, with merchandise at low fixed price points. General merchandise and consumer products jointly account for the majority of the company’s product offerings. The company’s stores are throughout Canada, generally located in convenient locations, such as metropolitan areas, midsize cities, and small towns.