Dollarama wobbles despite soaring Q3 profit, revenue
DOLLARAMA INC. had year-over-year increases in sales, net earnings and earnings per common share for the third quarter ended Oct. 29, 2017. Diluted net earnings per common share rose 25.0 per cent to $1.15.
During the third quarter of fiscal 2018, the corporation opened 10 net new stores, compared with 18 net new stores during the corresponding period of the previous fiscal year.
“We are pleased to announce that fiscal 2018 guidance has been enhanced on gross margin and general, administrative and store operating expenses. This is attributable to our strong results and consistent performance through the first nine months of the current fiscal year,” said Dollarama’s president and chief executive officer, Neil Rossy. “We are focused on executing our growth strategy and providing compelling value to our customers. We are also on track to meet our fiscal 2018 net new store target.”
Sales for the third quarter of fiscal 2018 increased by 9.7 per cent to $810.6-million, compared with $738.7-million in the corresponding period of the prior fiscal year. The increase in sales was driven by continued organic sales growth fuelled by comparable store sales growth of 4.6 per cent, over and above comparable store sales growth of 5.1 per cent in the third quarter of fiscal 2017, and the growth in the total number of stores over the past 12 months, from 1,069 stores on Oct. 30, 2016, to 1,135 stores on Oct. 29, 2017.
(See DOL Table 1 on page 35)
Comparable store sales growth for the third quarter of fiscal 2018 consisted of a 4.5-per-cent increase in the average transaction size, over and above a 5.8-per-cent increase in the corresponding quarter of fiscal 2017, and a 0.1-per-cent increase in the number of transactions.
Net earnings increased to $130.1-million, or $1.15 per diluted common share, in the third quarter of fiscal 2018, compared with $110.1-million, or 92 cents per diluted common share, in the third quarter of fiscal 2017. The increase in net earnings is mainly the result of a 9.7-per-cent increase in sales, a stronger gross margin and lower SG&A as a percentage of sales. Earnings per share were also positively impacted by the repurchase of shares through the corporation’s normal course issuer bid.
(See DOL Table 2 on page 35)
On Dec. 6, 2017, the corporation announced that the board of directors had approved a quarterly cash dividend for holders of common shares of 11 cents per common share. The corporation’s quarterly dividend will be paid on Jan. 31, 2018, to shareholders of record at the close of business on Jan. 5, 2018, and is designated as an eligible dividend for Canadian tax purposes.
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Erika Flores condensed this news release (firstname.lastname@example.org).
Joshua Bekenstein, Gregory David, Elisa D C Garcia, Stephen Kenrick Gunn, Nicholas George Nomicos, Lawrence Rossy, Neil George Rossy, Richard G Roy, John Huw Thomas
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