Groupe Dynamite Inc: Solid 1Q Beat and Raise Report May Not Be Enough to Catalyze GRGD’s Stock

研报英文原文证据摘录

Groupe Dynamite Inc: Solid 1Q Beat and Raise Report May Not Be Enough to Catalyze GRGD’s Stock

tly below

Q1E 0.46 0.44

consensus' +25.4% estimate. This factor could pressure sentiment despite a solid print.

Q2E 0.77 0.81

We'll listen to more details on 2QTD in today's earnings call. Q3E 0.94 0.92

Q4E 0.99 0.90

We rate GRGD Buy; its Q1 report reinforces our bullish view: 01/27E 3.15 3.16

GRGD's Q1 report reinforces our view it is one of Softlines' best growth stocks. GRGD's 01/28E 3.75 3.62

Q1 slight comp miss may cause some to worry about topline deceleration. However, we 01/29E 4.25 4.20

remain optimistic GRGD's brands momentum and shift to high-quality US locations

Mauricio Serna, CFA

should drive strong LT growth. We thus forecast a 19% 5-yr. EPS CAGR and believe this Analyst

growth justifies a high P/E. Our C$125 PT is 68% above GRGD's last closing price. mauricio.serna@ubs.com

+1-212-713 9028

GRGD's 6c Q1 EPS beat reflected better than expected GM%:

Jay Sole

Revenue increased 37.0% y/y to C$311M, 50 bps below the Street's view. Retail Analyst

revenue was up 37.2% y/y while online revenue grew 35.7% y/y. Gross margin jay.sole@ubs.com

expanded 530 bps to 67.4%, 300 bps above the Street’s 64.4% estimate. These gains +1-212-713 3559

reflected lower tariffs, controlled merchandise cost, and reduced markdowns. SG&A Natalie Koltermann

(incl. D&A) dollars were up 28.3% y/y and leveraged 270 bps y/y to 39.3% of sales, 60 Associate Analyst

bps worse than consensus’ 38.7%. The increase was due to strategic investments to natalie.koltermann@ubs.com

support UK market expansion and technology costs. Adj. EBITDA thus increased 71.3% +1-212-713 4229

y/y to C$114M with a 36.8% margin, up 730 bps y/y and 310 bps above the Street’s

33.7% estimate. Inventories ended Q1 up 19% y/y.