Q: Hi 5I,
Just wanted to get your input on supply chain challenges from the tariffs and what impact this might have specifically for Dollarama. It is in my portfolio and has done well but will there come a time where some shelves are bare and successes are challenged. Should we be trimming Dol.ca in anticipation of this event?
Just wanted to get your input on supply chain challenges from the tariffs and what impact this might have specifically for Dollarama. It is in my portfolio and has done well but will there come a time where some shelves are bare and successes are challenged. Should we be trimming Dol.ca in anticipation of this event?
5i Research Answer:
It is a tough call, of course because no one has a clue where tariffs are going to end up. For now, we might take our cue from the market, where investors clearly do not seem concerned, with the stock up 18% this year. There is a trade off. Costs might increase with tariffs, but value-conscious consumers might frequent DOL stores more if things get tough in the economy. With recent China/US news, and the company's strong guidance, we would not see DOL as a SELL right now.