The Motley Fool

3 Retail Stocks That Are Better Than Canada Goose Holdings Inc (TSX:GOOS)

Canadian luxury apparel brand Goose Holdings Inc (TSX:GOOS)(NYSE:GOOS) reported its fourth-quarter and year-end results last month, and for the most part the results were very encouraging.

Total sales were up over 40% year over year, adjusted EBITDA margin expanded by 240 points, and for the first time ever, sales generated from the company’s Rest of World segment were in line (34.5%) with those generated from its domestic Canadian market (35.3%).

Yet as good as those results were, GOOS stock plunged more than 30% in the trading session following the earnings release as the market responded to fears of slowing growth in certain of the businesses operating segments, including its direct-to-consumer channel.

Now, the GOOS stock’s valuation is obviously going to look a lot better following the drop than it did prior to, but even notwithstanding, here are three TSX retail stocks:

Alimentation Couche-Tard Inc (TSX:ATD.A)(TSX:ATD.B) meanwhile, has very quietly become the largest company in Canada, and in case the name doesn’t ring a bell, you’re probably not alone.

As Couche-Tard’s CEO Brian Hannasch said during the company’s investor day in January, “We’re the largest $50-billion company nobody’s ever heard of.”

While it may not be much of a household name yet, many readers will probably be familiar with the “Circle K” branded convenience stores and gas stations scattered across the country.

Much of its success has stemmed from acquiring smaller competitors, then improving its operating metrics to justify the return on investment.

Meanwhile, the convenience store market remains largely fragmented in the United States, and ATD is reportedly also looking into opportunities in Asia and Europe as well.

Unlike Canada Goose, Canadian Tire Corporation Limited (TSX:CTC) has been part of the Canadian fabric for over 95 years.

During that time, CTC’s been able to leverage its strengths to add other retail businesses to its portfolio, including the likes of Marks, Sport Chek, and, most recently, Helly Hansen.

The company’s first quarter was a good one, including its 20th consecutive quarter of growth; it’s hoping to build off that momentum in Q2, traditionally the company’s second most important quarter of the fiscal year.

As well, CTC shares are currently paying investors a 3.05% annual dividend yield.

Dollarama Inc (TSX:DOL) reported top-line sales growth of 13% in the fourth quarter, and 8.6% sales growth for the full year ended February 3, 2019.

Canada’s leading discount retailer continues to add more stores to its existing brick-and-mortar network, bringing the total now to 1,225 stores up from 1,160 stores a year prior.

Yet looking deeper into the numbers, most of the company’s current growth is coming from the net addition of new physical locations, while same-store sales growth continues to present a much more modest story, up just 2.6% in the fourth quarter and 2.7% for the fiscal year ended 2019.

Unfortunately, DOL will one day find it tough to find viable new opportunities to expand its retail footprint, potentially slowing its growth considerably.

Yet it’s also a business with a certain amount of “moatiness” to it — a quality that value investors like Warren Buffett have often pointed to as a reliable indicator of long-term investment performance.

Just Released! 5 Stocks Under $49 (FREE REPORT)

Motley Fool Canada's market-beating team has just released a brand-new FREE report revealing 5 "dirt cheap" stocks that you can buy today for under $49 a share.
Our team thinks these 5 stocks are critically undervalued, but more importantly, could potentially make Canadian investors who act quickly a fortune.
Don't miss out! Simply click the link below to grab your free copy and discover all 5 of these stocks now.

Claim your FREE 5-stock report now!

Fool contributor Jason Phillips has no position in any of the stocks mentioned. Alimentation Couche-Tard is a recommendation of Stock Advisor Canada.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.

I consent to receiving information from The Motley Fool via email, direct mail, and occasional special offer phone calls. I understand I can unsubscribe from these updates at any time. Please read the Privacy Statement and Terms of Service for more information.