Texas Roadhouse (TXRH)

Consumer Discretionary

Quo Vadis Capital

John Zolidis updates his best Long and Short ideas in Retail and Restaurants to start Q2. This follows a successful first quarter, where his average Short fell 11%, while his average Long was flat. Both compared favourably to his universe, which was down 6%, on average. The key change this quarter sees John turn bearish on TXRH as the business decelerates, margins inflect negatively and consensus forecasts appear too high. Compounding matters, the shares also trade at a premium to historical levels. Additional Short ideas include Cava, Dollarama and Tractor Supply, while on the Long side, he continues to be bullish on names such as Ollie's Bargain Outlet, Sprouts Farmers Market and Walmart.

- 18 April, 2025

Dollarama (DOL CN) Canada

Consumer Staples

Quo Vadis Capital

John Zolidis turns bearish having previously removed the stock from his Buy list in early Dec 24 after booking a ~260% gain. His thesis is straightforward: industry tailwinds are shifting to headwinds, DOL shares are extended, estimates are too high and he expects downward revisions to drive a negative re-rating in the shares. The stock currently trades at a P/E of 30.5x and EV/EBITDA of 18.6x on consensus FY25 forecasts vs. 10-year averages of 25x and 17x, respectively. Considering growth well below historical averages in FY25, John believes a multiple below historical averages is warranted; targets ~25% downside.

- 24 January, 2025

Bear’s Den Idea Forum

MYST Advisors

While MYST’s generalist events typically offer a diverse set of ideas, they were shocked by the extremely high percentage (>70%) of Consumer-related Shorts (Cheesecake Factory, Dollarama, Ebay, Elf Beauty, Hertz, O'Reilly Automotive, Simply Good Foods, Utz Brands) presented last week! Other themes included companies facing funding issues (AST SpaceMobile, Hawaiian Electric Industries, HTZ) or exhibiting accounting red flags (CAKE, EBAY, UTZ) and stocks priced for perfection (CME Group, DOL CN, Loar Holdings, ORLY).

The ideas presented at MYST’s previous Bear’s Den Forum (Jun 24) dramatically outperformed over 1-month period (~71% hit rate, +7.4% average alpha).

- 20 September, 2024

Dollarama (DOL-TSE)

Consumer Staples

Quo Vadis Capital

DOL-TSE shares have gained 33% YTD and now trade nearly 19x EV/ FY24E (Jan-2025) EBITDA. The stock gains have been in reaction to very strong traffic-driven comparable-store sales growth. This has combined with generous flow-through to the bottom-line. FY23 (Jan-2024) same-store sales jumped 12.8% on top of a 12.1% increase in the prior year. EPS in FY23 grew 29% on top of 26% the prior year. Quo Vadis attribute DOL-TSE's strong performance to the impact of inflation on the Canadian consumer, which has prompted value-seeking behaviour. DOL-TSE has been well positioned to benefit from this based on its assortment, primarily direct-imports, which is offered at a discount to similar items at other retailers.

- 14 June, 2024

Which unit growth stories can be bought at a discount?

Consumer Discretionary / Staples

Quo Vadis Capital

John Zolidis reviewed 18 unit growth stories in the consumer space, breaking out the value of the existing business from the implied value of the growth option. He then calculated the value of future unit growth using a store level DCF. He compared the implied value of the growth option in the first exercise to expected value creation from store growth in the second. From this John solved for where the market was paying the largest premium to the value of future growth and where growth could be purchased at a discount. The most interesting names on the long side were Academy Sports & Outdoors, Luckin Coffee and Yum China. Sprouts Farmers Market still looks very cheap even after +50% move YTD. Investors are paying the biggest premium for Dollarama, Chipotle and Dollar Tree.

- 22 December, 2023

Dollarama (DOL CN) Canada

Consumer Staples

Quo Vadis Capital

Inflation to déclenche next round of pricing action - provides an opportunity for DOL to resume its extremely successful strategy of introducing higher prices and taking price on existing items. This action will generate faster same-store sales growth, margin gains, and accelerated EPS growth. The fact that DOL also represents a refuge from the supply-chain concerns that are severely impacting US retailers only increases John Zolidis’ bullish view. A 25x P/E (5-yr average is 24x) would see the shares appreciate 30%+ from here.

- 29 October, 2021