Despite the uncertainty surrounding the Israel-Iran conflict and trade war, the S&P/TSX Composite Index has witnessed solid buying, rising 19.2% from its April lows. Easing inflation, falling interest rates, and improving broader market conditions have driven the equity markets higher. Amid improved investors’ sentiments, let’s look at two TSX stocks that offer excellent buying opportunities after their impressive quarterly performances.
Dollarama
Dollarama (TSX:DOL) has posted an impressive first-quarter performance for fiscal 2026 earlier this month. On the back of a 5.6% increase in the previous year’s quarter, its same-store sales rose 4.9%. A 3.7% increase in transactions and a 1.2% rise in average transaction size boosted its same-store sales. It opened 22 stores during the quarter, raising its store count to 1,638, an increase of 69 stores compared to the previous year’s quarter. The addition of new stores and positive same-store sales drove its top line by 8.2% to 1.512 billion.
The expansion of gross margin by 100 basis points amid lower logistics expenses improved its profitability. Dollarama also witnessed an 82.4% increase in Dollarcity’s net earnings contribution. An increase in Dollarama’s stake in Dollarcity to 60.1% and Dollarcity’s solid operational performance led to a rise in Dollarcity’s contribution. Amid these solid performances, the Montreal-based retailer has posted a diluted EPS (earnings per share) of $0.98, representing a year-over-year increase of 27.3%.
Moreover, Dollarama has aggressive expansion plans and is hopeful of raising its store count to 2,200 by the end of fiscal 2034. Given its efficient capital business model, quick sales ramp-up, and lower network maintenance capital expenses, these expansions could drive its top and bottom lines. Moreover, Dollarcity is also expanding its store network and expects to raise its store count from 644 to 1,050 by the end of 2031. Also, Dollarama can increase its holdings in Dollarcity to 70% by exercising its option.
Additionally, Dollarama is expanding into the Australian retail market by signing an agreement to acquire The Reject Shop, which operates 390 discount stores nationwide, for $233 million. Amid customary closing conditions, the company’s management anticipates completing the deal in the second half of this year. So, the company’s growth prospects look healthy.
Supported by its solid first-quarter performance, Dollarama’s stock price has increased by 7% since reporting its earnings and is up 34.5% year-to-date. Despite the surge, I believe the uptrend in Dollarama’s stock price will continue, given its solid underlying business and healthy growth prospects.
Celestica
Another stock that posted solid earnings is Celestica (TSX:CLS). The supply chain solutions provider outperformed its revenue and adjusted EPS guidance during the quarter. Its top line came in at $2.65 billion, representing a year-over-year increase of 20%. The strong performance from its Connectivity & Cloud Solutions (CCS) segment, with the revenue from the Hardware Platform Solutions increasing by 99%, drove its revenue.
Additionally, the company’s operating margin also expanded by 1.2% to 7.1%. Supported by top-line growth, expansion of operating margin, and share repurchases, the company posted an adjusted EPS (earnings per share) of $1.20, representing a 44.6% increase from the previous year’s quarter.
Moreover, the demand for Celestica’s products and services continues to rise amid increased investments in artificial intelligence (AI)-related infrastructure. Amid the rising demand in its CCS segment, the company’s management has raised its 2025 guidance. The company’s new 2025 revenue guidance of $10.85 billion represents a 12.4% increase from the previous year. The management also predicts its adjusted EPS to come around $5.0, representing a year-over-year increase of 28.9%. Despite solid returns over the last three years, the company’s valuation appears attractive, with its next-12-month price-to-sales multiple at 1.4, making it an excellent buy.
