EPS of 98c beat estimates of 84c; revenue of $1.52B beat estimates of $1.50B. EBITDA of $496M beat estimates by 10%. Dollarama's fiscal 1Q 4.9% comparable sales gain positions the company to at least meet annual guidance of 3-4%, given comparisons are set to get relatively easier. Management didn't revise its goals upward for the year, suggesting there might be some conservatism, given uncertainty around consumer spending. Revenue performance in 1Q was aided across all metrics by growth in traffic, basket and robust demand for consumables and seasonal items. Dollarama anticipates closing its acquisition of The Reject Shop in July, which will help it expand in Australia. Lower logistics costs and better product mix (with good performance from seasonal) lifted gross margin by 1 percentage point. For the year, guidance suggests the metric could narrow as much as 90 bps. All-in, it was a solid quarter, and DOL continues to execute better than sector peers. Things continue to look good.
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