A Dollarama store near Bloor St. West and Bathurst St. in TorontoFred Lum/The Globe and Mail
One of the best streaks in Canadian retail will be on the line on Wednesday, as Dollarama Inc. reports its quarterly financial results.
Up 30 per cent so far this year, Dollarama's stock has been the beneficiary of store expansion, cost control, a growing product line and strong earnings.
Prior to Wednesday's opening bell, the company is scheduled to release financial statements from its first quarter of fiscal 2018. The average of analysts' estimates indicates the Street is expecting growth in adjusted earnings per share of 16 per cent over the prior year, on revenue of $715-million.
And if recent history is any indication, shareholders would not be unreasonable in hoping for Dollarama to come in ahead of expectations. The company has beaten the Street in 28 of the 30 quarterly earnings reports dating back to Dollarama's 2009 initial public offering, according to Bloomberg data.
Actual earnings exceeded estimates by an average of nearly 10 per cent over that time, with the share-price reaction on the day of the earnings announcement amounting to an average of 4 per cent to the upside.
Same-store sales growth – a key measure in the retail sector – is expected to moderate somewhat from the past couple of years, although to a still-strong figure of about 5 per cent, according to Keith Howlett, an analyst at Desjardins Securities.
"With the introduction of higher price points … and the ongoing rollout of the acceptance of credit cards as a means of payment, we expect higher transaction size to again drive first-quarter same-store sales growth," Mr. Howlett said in a note.