Dollarama Inc (TSX:DOL) stock had increased 9.7% midway through the noon hour on September 7 as of this writing after releasing impressive second quarter results the same day. The company reported $131.8 million profit – an 11.5% increase from the second quarter of fiscal 2017.
Operating income increased 24.1% to $191.9 million. Diluted net earnings per share grew 30.7% to $1.15 from $0.88. The stock surged above the $130 mark and as of trading at this minute is up 35% in 2017. Dollarama is the largest Canadian retailer for items of $4 or less. Dollar stores have seen a remarkable bump in the 2010s, as stores have managed to expand the base clientele to those in the upper middle class seeking bargains and cheap materials.
The company saw the opening of 17 net new stores. Sales and operating margins continue to impress and the board of directors approved a quarterly cash dividend of $0.11 per common share, representing a 0.33% dividend yield. Dollarama is forecasting store sales growth of 4-5% for the remainder of the year, along with several new store openings. The company also mentioned that it has yet to see the impact of the minimum wage hike in Ontario, though it will likely result in an absence of increase in occupancy costs.
Dollarama stock has been on a tear in 2017, and it is thriving in what appears to be a continuously improving economic environment in Canada.
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