Dollarama beats analysts’ expectations for its first quarter of 2024 and reports earnings per share of $0.63, up 28.6% from the same quarter last year and net profit of $179.9 million. dollars ($M)
The rise in profit was driven by a 20.7% rise in sales to $1.295 billion (B$) compared to $1,073 billion last year and higher same-store sales increased by 17, 1%.
Earnings before tax, interest and amortization rose 22.1% to $366.3 million, the equivalent of 28.3% of sales, slightly better than the previous quarter when it represented 28% of sales.
Gross margins remained stable at 42.2% and management expects them to evolve according to its forecasts.
The company maintained its paused share buyback program in Q1, but expects its capital flows to resume buying common stock for cancellation.
New stores
Dollarama doubled the number of store openings with 21 new stores, compared to 10 in Q1 2023. During its earnings conference call, management attributed the increase to the real estate market being more favorable to its objectives than in previous quarters, as well as a ‘to the company’s desire to open new stores earlier in its financial year, without waiting for Q3-Q4, a period during which, historically, it opens the greatest number of stores.
Management notes that the increase in sales of consumables continues in all product categories.
To a question from Martin Landry, analyst at Stifel GMP, management replied that it was not considering drastic changes to its ways of doing things and was working in continuity on interesting offers and a shopping experience that meets the expectations of its customers. Nor does it plan to react to the aggressive promotions of its competitors.