Dollarama increased sales 18.2 per cent, including a 13.2 per cent increase in comparable store sales and profit reached $193.5 million in its fiscal 2023 second quarter.
“Our strong performance in the first half of fiscal 2023 reflects a sustained consumer response to our unique value proposition, especially for everyday essentials, as Canadians from all walks of life adapt to a high-inflation environment. As a result, we are increasing our assumption for annual comparable store sales growth to between 6.5 per cent and 7.5 per cent,” says Neil Rossy, president and CEO.
“As we strive to provide Canadians with a wide variety of merchandise, I am pleased with our progress rebuilding our inventory, thereby ensuring that our conveniently located stores are well-stocked for our customers ahead of key seasons in the second half of the fiscal year.”
Sales for the second quarter of fiscal 2023 increased by 18.2 per cent to $1,217.1 million, compared to $1,029.3 million in the corresponding period of the prior fiscal year. Dollarama says the increase was driven by growth in the total number of stores over the past 12 months (from 1,381 stores on August 1, 2021, to 1,444 stores on July 31, 2022) and in comparable store sales.
Comparable store sales for the second quarter increased by 13.2 per cent consisting of a 20.2 per cent increase in the number of transactions and a 5.8 per cent decrease in average transaction size. Dollarama reports that the increase in comparable store sales is primarily attributable to higher sales of consumables, as well as seasonal products. Comparable store sales in the corresponding period of the prior fiscal year declined 5.1 per cent per cent primarily as a result of the ban on the sale of non-essential goods in Ontario in place for the first 5.5 weeks of the quarter, where approximately 40 per cent of the corporation’s stores are located.
Outlook
In the second half of fiscal 2023, Dollarama says it expects to continue to benefit from strong demand for “its affordable, everyday items at compelling value in the context of inflation,” including stronger demand than historically for lower-margin consumable products. Dollarama has increased its comparable store sales growth assumption for fiscal 2023 from a range of 4.0 per cent to 5.0 per cent to the range of 6.5 per cent to 7.5 per cent.
Dollarama’s outlook for fiscal 2023:
- open 60 to 70 net new stores
- gross margin as a percentage of sales to be in the range of 42.9 per cent to 43.9 per cent
- SG&A (operating expenses – selling, general and administrative expenses) as a percentage of sales to be in the range of 13.8 per cent to 14.3 per cent
- deploy $160 million to $170 million in capital expenditures
- actively repurchase shares under its normal course issuer bid.
