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Highlights
- The Canadian consumer staples sector plays a crucial role in the nation’s economy.
- Alimentation Couche-Tard generated C$ 810.4 million in net earnings for Q2’23.
- Dollarama’s operating income improved by 11.5 per cent compared to Q3’22.
The market has witnessed volatility since the past year, courtesy of multiple factors, such as rising inflation, increased interest rates, and recession concerns. In this unstable and difficult period, several investors are seeking refuge in the consumer staples sector.
So, it’s not surprising to see that Canadian consumer staples stocks have been performing in positive territory amid such inflationary conditions. If we dig a little deeper into the Toronto Stock Exchange (TSX), it is classified into 11 primary sectors. Among these 11, financial and energy stocks are the top performers. However, consumer stocks are often seen leading when investors look for a more resilient and stable investment climate.
Having said that, let’s move on to two TSX-listed consumer staples stocks and see how they have fared lately:
Alimentation Couche-Tard Inc (TSX:ATD)
Alimentation Couche-Tard Inc is a global convenience stores company operating primarily around selling tobacco products, fresh food, groceries, beverages, quick service restaurants, car wash services, transportation fuel, and more. This consumer-focused company’s market cap is around C$ 6.47 billion, with a quarterly cash distribution of C$ 0.14 per share.
In a media release, Couche-Tard is said to have generated net earnings of C$ 810.4 million (C$ 0.79 per diluted share) for the second quarter of 2023, up from C$ 694.8 million in the prior comparable period. Meanwhile, adjusted net earnings for Q2’23 improved from C$693 million in Q2’22 to C$ 838 million (C$ 0.82 per diluted share).
The company also announced a 27.3 per cent increase in its quarterly dividend during the second quarter of 2023.
Dollarama Inc. (TSX:DOL):
Dollarama Inc. is one of the leading discount retail stores companies in Canada. The business caters to a large section of consumers with everyday essentials, general merchandise, seasonal items, and more at low fixed price points. Dollarama’s total market share is about C$ 2.3 billion with a significant 3-year dividend growth rate of 12.51per cent.
Dollarama mentioned achieving a 10.8 per cent increase in its comparable store sales for the third quarter of 2023, alongside a 14.8 per cent increase in its diluted net earnings per share. In addition, while the fiscal year 2023 comparable store sales growth improved by 9.5%–10.5%, the gross margin estimate shrank to 43.4%–43.6% of sales. The company’s other financials are summarized below:
Image Source: © 2023 Krish Capital Pty. Ltd.
Bottom Line
As the stock market has been volatile throughout 2022, the investors should do a proper market research before taking a final call on investing.
*Please note, the above content constitutes a very preliminary observation based on the industry and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.
