Dollarama (TSE:DOL) (OTC:DLMAF) reported its Fiscal Q2-2024 earnings earlier today, with the discount retailer beating both revenue and EPS expectations. The company reported a robust 19.6% year-over-year increase in sales to C$1.456 billion, exceeding analysts’ expectations of C$1.403 billion. Similarly, diluted earnings per share soared by 30.3% to C$0.86, surpassing the consensus estimate of C$0.77. Also, Dollarama raised its sales forecast for the full year. These factors combined to make DOL stock soar today.
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Now, let’s take a look at the rest of the firm’s results. First, its comparable store sales experienced significant growth of 15.5%, partially due to high demand for consumables. This is an impressive growth rate, given the strong 13.2% increase in the same period of the previous year.
Second, EBITDA grew by 23.8% to C$457.2 million, accounting for 31.4% of sales compared to 30.4% of sales in the previous year. Finally, the company opened 18 net new stores during the quarter and repurchased C$248.1 million worth of shares under its buyback plan.
It’s also important to note that Dollarama launched C$5 items last year, which, according to the CEO, have been “well-accepted” by customers — another reason for Dollarama’s strong results.
Improved Fiscal 2024 Outlook
Dollarama increased its Fiscal 2024 guidance for comparable store sales growth from a previous range of 5.0% to 6.0% to a new range of 10.0% to 11.0%. Other than that, the other forecasts remain unchanged from the last quarter, including an anticipated 60 to 70 net new store openings and a gross margin between 43.5% to 44.5%.
Is Dollarama Stock a Buy, According to Analysts?
According to analysts, Dollarama stock comes in as a Moderate Buy based on five Buys and one Hold assigned in the past three months. The average DOL stock price target of C$100.10 implies 6.3% upside potential.
If you’re wondering which analyst you should follow if you want to buy and sell DOL stock, the most accurate analyst covering the stock (on a one-year timeframe) is Brian Morrison of TD Securities, with an average return of 17.2% per rating and a 96% success rate. Click on the image below to learn more.
