U.S. dollar store stocks have had a rough week – indeed, a rough second half of 2012. There’s good reason for that. Less clear is why Canada’s Dollarama stock has been caught in the downdraft, trading down 6 per cent in the last month. Its stock is getting an unfair markdown.
The whole North American dollar store sector, including Dollarama, took a hit in October after Dollar Tree warned of disappointing third-quarter sales due in part to higher gas prices and caution among its customers. This week, it was Dollar General’s turn to offer a disappointing forecast for the year, which again weighed on dollar store stocks.