Canada's Dollarama Q4 sales rise 11.7%, slightly beat estimates

Overview

• Canada discount retailer's Q4 sales rose 11.7%, slightly beating analyst expectations

• Adjusted EPS for Q4 increased 2.1% yr/yr

• Company repurchased 888,309 shares for C$174.8 mln and raised dividend by 13.4%

Outlook

• Dollarama sees Canadian comparable store sales growth of 3.0% to 4.0% in Fiscal 2027

• Company expects 60 to 70 net new store openings in Canada in Fiscal 2027

• Dollarama expects Australian segment to incur a net loss in Fiscal 2027

Result Drivers

• AUSTRALIA CONTRIBUTION - Q4 sales growth was driven by a C$243 mln contribution from 402 stores in Australia and increased store count in Canada

• SEASONAL DEMAND & CALENDAR IMPACT - Comparable store sales growth in Canada was mainly driven by demand for seasonal products, offset by calendar shifts and unfavorable weather reducing store traffic

• LOWER AUSTRALIA MARGINS - Gross margin declined due to lower margins in Australia, which had a negative 110-basis point impact

Company press release: ID:nCNWgsPm5a

Key Details

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 9 "strong buy" or "buy", 7 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the discount stores peer group is "buy"

• Wall Street's median 12-month price target for Dollarama Inc is C$218.00, about 16.8% above its March 23 closing price of C$186.58

• The stock recently traded at 35 times the next 12-month earnings vs. a P/E of 39 three months ago

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