I find the main press report the same old stories on big names even if there is not alot to talk about. I prefer to dig deeper and find stories about smaller companies who are making big changes. A few stories are provided below. Please let me know what you think -- good and bad.
Dollarama (TSE:DOL), Canada's biggest dollar store chain, beat expectations with a 24% increase in EPS, 11.5% increase in sales and 5.8% increase in same store sales. Q4 EPS was $1.24 compared to $1.00 last year and forecasts of $1.12.
With 1,095 locations Dollarama is the biggest dollar store chain in a country with significantly lower penetration than the US. In March 2017, the Corporation completed a study to re-evaluate the market potential for Dollarama stores across Canada. The study took into consideration the 2016 census and household income data, the current competitive retail landscape, the rates of per capita store penetration, the performance of comparable and new stores and the targeted payback period expected by Dollarama on new store openings.
Having completed the study the company has announced plans to expand the store network beyond the previously disclosed threshold of 1,400 stores, up to approximately 1,700 stores over the next eight to ten years. While cannibalization is expected to increase as the total store count gets closer to 1,700, management does not expect this to have a significant impact on the current average capital payback period of approximately two years.
The decision shows that there is a huge runway of growth for both profits and earnings for the company. The stock price has risen 10% to $110.21 on a valuation of 32 times trailing earnings but with huge forcast growth in store numbers and comparative sales it still looks like a bargain.
Restoration Hardware (RH) is up 18% since reporting its earnings beat and rosy guidance on Tuesday. Revenue fell 9% to $587 million beating consensus forecast for $585 million and net income fell to $27.9 million or $0.68 which beat expectations of $0.66.
CEO Gary Friedman said "Exiting fiscal 2016 we are now through the most uncertain stages of our transformation." and went on to add "2016 was a year of transformation and transition at RH. We transformed our business from a promotional to a membership model that we believe will enhance our brand, streamline our operations, and vastly improve the customer experience."
However it was RH's guidance that drove the stock price increase. The company expects revenue to jump by 8% to 12% from year-ago levels, operating margins to expand, and to generate significant free cash flow in fiscal 2017. Adjusted earnings for the year are forecast to increase 26% to 55% to between $1.78 and $2.19 per share.
The stock price is now up over 80% from 52 week lows at $45. But with RH now positioned to profit from a buoyant housing market it could have further to go.
Carnival (CCL) beat expectations and raised guidance on Tuesday after saying bookings were "well ahead" of last year at "considerably higher prices". The profit for the quarter rose to $352m (or $0.48 EPS) from $142m ($0.18 EPS) as the company benefited from increased passenger numbers, increased passenger spend and the non-recurrence of derivative losses.
The company raised full year 2017 EPS guidance to be in the range of $3.50 to $3.70 (up from December guidance of $3.30 to $3.60).
"We are off to a good start delivering another quarter of operational improvement on top of a very strong first quarter last year.", said Chief Executive Officer Arnold Donald. "Our performance was driven by increased demand, particularly for our core Caribbean itineraries, leading to higher year-over-year ticket prices which enabled us to overcome the significant negative impact of both fuel and currency to exceed the high end of our guidance range."
Carnival has seen earnings grow by 33% annually over the past five years as the demand for quality cruises has exploded --boosted by emerging markets, an ageing population and better services. Priced at $58.96 the stock is up 37% this year. However on a PE of 15.7 it is still on a significant discount to the market and given its growth prospects still looks cheap.
Just my opinion. This is not a recommendation to buy or sell. Please do your own research.
Submitted April 02, 2017 at 05:14AM by InterestingNews1 http://ift.tt/2nsX92s
