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Is Dollarama Stock a Buy After Posting Strong Earnings Numbers?

Dollarama (TSX:DOL) released its first-quarter earnings of fiscal 2024 last week. It was an impressive performance for the dollar store chain with sales totaling just under $1.3 billion for the period ending April 30 and rising 21% year over year. Comparable store sales grew by 17% and earnings per share jumped by 29%. For the full fiscal year, however, the company is modest in its expectations, forecasting that comparable store sales will be within 5% and 6%.

The company achieved a significant milestone in Q1, opening its 1,500 Dollarama store. And it is eyeing more growth ahead as it plans to have 2,000 stores operating by 2031.

Over the past 12 months, Dollarama's stock has been fairly resilient, rising by 13% even as many other growth stocks have struggled. The retailer is a popular option for cash-strapped consumers looking to make the most of their budgets amid inflation, and it can continue to do well even if the economy falls into a recession this year.

The stock is trading near its 52-week high and is trading at close to 29 times trailing earnings and at over four times revenue. It's by no means a cheap stock to own but it can be a good one to hang on to this year as 2023 may prove to be volatile with inflation and economic concerns still weighing on investors. As a bonus, Dollarama's stock also pays a modest dividend yield of 0.3%, giving investors a way to further pad their returns and to make the most of their investment dollars.