Sales in what was the company's first quarter totalled $1.29 billion
Montreal-based Dollarama Inc. (TSX: DOL) enjoyed a 21% year-over-year jump in sales and it totalled the sales with $1.29 billion in its latest quarter as the discount retailer scooped up consumers seeking cheaper products amid high inflation.
For same-store sales, the number of transactions grew nearly 16% while purchase sizes also nudged up.In the quarter ended April 30, the company said strong demand held up across the board, from consumables to seasonal items and general merchandise, resulting in a profit boost of 23% from a year earlier.
Dollarama's real estate footprint is increasing as well. It opened 21 net new stores in its first quarter, pushing its network to 1,507 locations by April 30 versus 1,431 a year earlier – an 11% expansion. Dollarama hopes to reach 2,000 stores in Canada by 2031.
As interest rates rise along with the cost of living, the customer boost stemmed partly from "trade-down, no doubt,'' a spokesman of Dollarama said, referring to shoppers who swap their previous retailers of choice for more affordable alternatives.
The trend came as Dollarama was relatively indifferent to competitor discounts. "We don't react to promotional activity. We never have,'' Dollarama said. "If you come in our stores at back to school, you're probably going to pay more for the hundred-pack of looseleaf – of ruled white paper – than you will walking into another retailer that's giving it away at that time of the year. But for the other 11 and a half months of the year, we're cheaper,'' the CEO said.
On Wednesday, the company reported earnings of $179.9 million in its latest quarter, up from $145.5 million in the same period the year before. The profits amounted to 63 cents per diluted share for the quarter ended April 30, up from 49 cents per diluted share a year earlier.
Sales totaled $1.29 billion, up from $1.07 billion in the same quarter last year. Analysts on average had expected a profit of 59 cents per share and $1.25 billion in sales, according to estimates compiled by financial markets data firm Refinitiv. Source: Canadian Grocer, Refinitiv
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