As vaccination rates in Canada continue to improve and now a higher percentage of the population that is fully vaccinated than in the US, fewer restrictions should result in Canadians going back to shopping centres, restaurants and other leisurely activities. This is likely to have a positive impact on Canadian retail businesses.
You may be thinking: By now, most if not all of the anticipated recovery in retail and consumer stocks is likely priced in. While this may be partly true, we think there are still ways to get ahead of the curb. That is, by focusing on fundamentals and staying invested in long-term consumer winners.
In this stock screen, we aim to focus on retail companies that have shown relatively strong performance during COVID and are prepared from a balance sheet and inventory perspective.
To identify some names, we screened for:
- Consumer retail companies based in Canada
- Market cap > $100M
- Positive revenue growth from 2019 levels
- Current ratio >1
Here is the screen:
| Ticker | Company Name | Company Market Cap (CAD) |
Revenue Growth from 2019 | Current Ratio (FY0) |
Average Inventory Days (FY0) |
YoY % Chg in Average Inventory Days (FY0) |
Average Inventory Days (FY0) Percentile of Industry |
| LULU.OQ | Lululemon Athletica Inc | 66,386,716,781.34 | 74.0% | 2.41 | 109.48 | 14.4% | 100 |
| CTCa.TO | Canadian Tire Corporation Ltd | 11,898,419,723.18 | 12.5% | 2.03 | 85.72 | 8.1% | 100 |
| DOO.TO | BRP Inc | 8,484,249,630.22 | 48.8% | 1.31 | 92.04 | 9.5% | 50 |
| GOOS.TO | Canada Goose Holdings Inc | 5,138,489,304.84 | 32.2% | 3.42 | 394.89 | 15.8% | 20 |
| TOY.TO | Spin Master Corp | 4,892,732,762.80 | 5.4% | 1.95 | 62.39 | -8.1% | 100 |
| ATZ.TO | Aritzia Inc | 4,426,863,698.88 | 38.3% | 1.43 | 88.81 | 36.6% | 55 |