Bullboard - Stock Discussion Forum Dollarama Inc T.DOL

Alternate Symbol(s): DLMAF

Dollarama Inc. is a Canada-based company, which offers various assortment of general merchandise, consumable products, and seasonal items. The Company conducts its business through its subsidiaries, including Dollarama L.P. and Dollarama International Inc. (Dollarama International). Dollarama L.P. operates the chain of stores in Canada and performs related logistical and administrative support... see more

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TSX:DOL - Post Discussion

Dollarama Inc > Better in Canada (DOL vx DG)

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Post by retiredcf on Sep 04, 2023 1:29pm

Better in Canada (DOL vx DG)

Unlike the US where competition for dollar stores was more intense between DG, DLTR, and other similar business models such as OLLI and FIVE, DOL’s main market is in Canada, where the company has enjoyed very favourable competitive advantage by being almost the largest and sole player in the Canadian market (lots of US retailers did not succeed in the Canadian market due to challenging logistic networks - eg. TGT). DOL has demonstrated much more attractive fundamental profiles compared to US peers, such as stronger same-store-sale growth (still maintaining double-digit growth in recent quarters), inventory level is better managed and it does have higher EBIT margin. In recent quarters, DG prioritized growth in store count and remodeling, leading to a significant increase in capex spending while sale growth was weak.

Overall, the competitive postion of DOL is much more favourable than US peers. DOL is also a better-run company across operating metrics. Yesterday, for example, DG reported another bad quarter and cut its forecast again. (5iResearch)

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