Shares of Dollarama (TSX:DOL) surged on Thursday because the inventory introduced its fourth quarter and full-year 2024 outcomes. Dollarama inventory jumped by as much as 8% in early buying and selling as the corporate exceeded its 2024 steerage on all key metrics.

What occurred

The fourth quarter and full-year was a powerful one for Dollarama, with the low cost retailer reporting retailer gross sales progress of 8.7% 12 months over 12 months within the fourth quarter. Moreover, it noticed a 12.8% climb in comparison with full-year 2023 ranges.

Diluted earnings per share (EPS) hit $3.56 for the 12 months, up 29%, with the quarter up 26.4% to $1.15 EPS. Gross sales elevated 11.3% within the fourth quarter to $1.6 billion, and 16.1% for the 12 months to $5.9 billion. Such energy additionally allowed Dollarama inventory to extend its dividend. And never by a bit, however by a whopping 30%!

“In Fiscal 2024, we met or exceeded our steerage for all our key efficiency metrics, together with greater than anticipated comparable retailer gross sales, translating right into a 29% improve in EPS. Our robust monetary and operational efficiency demonstrates the enduring energy of our enterprise mannequin and that our compelling worth proposition continues to resonate with shoppers, together with in an unsure financial context,” mentioned Neil Rossy, President and CEO of Dollarama.

Trying forward

Now Dollarama is trying forward, and it appears to be like as if for the subsequent 12 months issues will stay pretty establishment. The corporate expects to proceed to learn from shoppers on the lookout for “comfort and compelling worth” provided by the corporate.

Moreover, the worth retailer expects to generate continued comparable retailer gross sales progress, over and above two years of double-digit comparable retailer gross sales progress. All which was partially fuelled by inflationary pressures on shoppers.

As for extra onerous numbers, Dollarama excepts to hit between 60 and 70 new web retailer openings. Moreover, as of now it expects comparable retailer gross sales between 3.5% to 4.5%, which might be far decrease than the 12.8% seen this 12 months. Even so, its gross margin ought to stay related, attaining between 44% and 45%. 

Different information?

One other piece of stories could come down the pipeline within the subsequent 12 months or two. Although nothing has been hinted at by Dollarama and its administration, there are rumours that the corporate may increase. And this time, into Australia.

After seeing such success with its Greenback Metropolis areas in Latin America, there have been rumblings the corporate could purchase one other low value retailer in Australia. Given the success it’s seen on a world scale, it appears probably that this might occur. Particularly in an financial system much like Canada’s.

Nonetheless, that’s unlikely to occur whereas we stay on this inflationary and unstable setting. Something might occur within the close to time period. So Dollarama inventory is true to reward its buyers with a 30% improve within the dividend somewhat than danger an acquisition at these ranges. Even so, I might proceed to maintain an eye fixed out for such a transfer within the not too distant future. For now, with shares up as they’ve been the final 12 months, Dollarama inventory stays a powerful purchase on the TSX at present.