Q: Hi 5i, pls provide your opinion, long term rating of Dollarama's results. I've had it as a core position for last several years and would like to know if the future still looks bright - future is 5+ years. Thx
5i Research Answer:
DOL reported solid operating results and is now trading at 28.8x times' Forward P/E. In the 4Q, DOL’s revenue grew 11% to $1.64B (same store sales were solid, around 8.7%, beating estimates of $1.48B and EPS was $1.15 beating estimates of $1.06. The balance sheet is okay, with a net debt/EBITDA of 2.4x. The company continues to repurchase shares aggressively as a key way to return capital, and store count also grew at a heathy pace. Overall, a very solid quarter, and guidance was increased slightly to 3.5% to 4.5% sales growth. The dividend was also increased by 30%. While the stock is on the expensive side, it continues to deliver and outperform its peers. We would still see it as a core holding.