DOL Stock Reaches New Peaks After Q2 Earnings Victory

DOL stock (DOL:TSX) disclosed its Fiscal Q2-2024 financial results today, and the discount retailer emerged as a winner, surpassing revenue and earnings projections. Dollarma’s sales have surged by a remarkable 19.6% year-over-year, reaching C$1.456 billion, which is higher than analysts’ estimates of C$1.403 billion. Additionally, the diluted earnings per share (EPS) have increased by an impressive 30.3% to C$0.86, exceeding the consensus projection of C$0.77. These excellent results have propelled DOL stock to new heights.

Here is a closer look at Dollarma’s Q2 performance.

1. Strong Comparable Store Sales Growth:

Dollarama’s comparable store sales surged by an impressive 15.5%, driven in part by robust demand for consumables. This growth rate is impressive, especially given the 13.2% increase in DOL stock in the previous year.

2. EBITDA Expansion:

The company saw strong growth in EBITDA, which expanded by an impressive 23.8% to reach C$457.2 million. This accounted for 31.4% of sales, up from 30.4% in the previous year.

3. Expansion and Buyback:

Dollarama continued to expand its footprint by opening 18 new stores during the quarter. Additionally, the company repurchased shares worth C$248.1 million under its buyback program.

C$5 Items Fueling Success:

Notably, Dollarama introduced C$5 items last year, a move that has resonated well with customers, according to the CEO. This strategic addition has undoubtedly contributed to Dollarama’s exceptional financial performance.

Revised 2024 Outlook:

Dollarama has made some big changes to its outlook for Fiscal 2024, especially when it comes to how much it expects sales in existing stores to grow. They used to predict it would be between 5.0% to 6.0%, but now they’re aiming even higher with a new range of 10.0% to 11.0%. That’s quite an improvement.

However, some other predictions haven’t changed. They still plan to open 60 to 70 new stores and maintain a gross margin between 43.5% to 44.5%, which is in line with what they expected in the previous quarter.

DOL Stock Forecast:

According to 9 analysts’ forecasts for  DOL stock, the company’s average 12-month target price will be CAD 91.38. The typical analyst rating is Strong Buy. DOL’s stock analysis by Stock Target Advisor is Very Bullish and is based on 19 positive and 0 negative indications.

The stock price of Dollarama was CAD 94.66 at the most recent closing. The stock price has changed by +7.92% over the previous week, +10.58% over the previous month, and +22.71% over the previous year.

Conclusion:

DOL stock’s remarkable Q2-2024 performance, marked by stellar sales growth and earnings surpassing expectations, has undoubtedly boosted investor confidence, driving a surge in DOL stock. With an upgraded outlook for Fiscal 2024, particularly in terms of comparable store sales growth, Dollarama appears determined to maintain its position as a prominent player in the discount retail sector.

Maryam Nasir