February’s retail sales rose 0.7%, coming up short of the expected 0.9% increase - but keeping up the momentum from January’s 1.1% lift…

… thanks to a continued recovery in motor vehicle sales and resilience in general merchandise - a category which has steadily grinded higher since the pandemic…

… which tracks to Dollarama’s (DOL) step up in same-store growth over the period.

Health and personal care retailers have seen similar stability, further evidenced by Jamieson’s (JWEL) steady mid-to-high single digit growth in Canada…

… and together, these two less elastic buckets have taken an additional 5% of discretionary spend since 2017.

That’s pushed discretionary wallet share higher in recent years, but we’re starting to see moderation…

… which should be further pressured by elevated crude oil prices, where large swings have historically altered the composition of consumer spending.

The longer that lasts, the more dollars will flow out of non-core discretionary - mimicking the “trade down” we’ve seen from sit-down restaurants to fast-food…

… and showing a consumer that’s not as healthy as the headline data might suggest.

If the Natural Resource Minister delivers on his goal to have ~10 new projects reach FID over the next year, demand for workforce accommodation will rise - leaving Black Diamond (BDI) well-positioned…

… following its $165M acquisition of Royal Camp Services, which doubled room count - nearly 50% of which isn’t currently in use. New projects breaking ground could drive a step-change in utilization, flowing through to margins…

… and to forward estimates, which investors are starting to price in.

Dexterra (DXT) is another name that’s bulked up through M&A, though the company is heavily skewed to services…

… making the operation of the camps its main exposure (catering, janitorial, hospitality, etc.). DXT has re-rated too…

… and the pair have outperformed the index meaningfully over the past few years - but they should have more juice if the underlying theme cooperates.

Hammond Power (HPS-A) added over 20% last week after Trump invoked the Defense Production Act for grid manufacturing capacity, explicitly naming transformers…

… for which America is the company’s dominant end market. The release also lists power control electronics, which bodes well for its $365M acquisition of AEG Power…

… a deal that diversifies Hammond’s product mix, supporting a valuation re-rate towards larger electrification peers.

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