In an otherwise quiet North American earnings week, investors looked to the Dollarama (DOL/TSX) earnings call to get the latest information on which way consumer winds were blowing.
It turns out that they’re blowing towards deep-discount dollar stores.
Dollarama announced a blistering 20.9% increase in adjusted earnings for its first quarter, to $300 million. Diluted net earnings per share were up 32.4%. The company also took the opportunity to announce a 9.9% dividend increase. Share prices were up roughly 3% on Wednesday.
When we combine Dollarama’s quarter with the excellent first-quarter earnings announced by Dollar General (DG/NYSE) and Dollar Tree (DLTR/NASDAQ) a few weeks ago, as well as the recent troubles at large retailers like Target, it’s clear that consumers are becoming much more budget-conscious when buying everyday goods during this inflationary period…