Strong Q2 boosts Dollarama to new high

MONTREAL — Management at Dollarama Inc. says it has been exploring the possibility of selling products online, though it wouldn’t revise its business model anytime soon as Canadian shoppers spend more money at the growing number of discount retail stores across the country.

“At this stage we continue to proactively explore e-commerce options that would complement our business model,” said Dollarama’s chief financial officer Michael Ross in a conference call Thursday morning following the release of the company’s secondquarter results. “Our priority very much remains an enhancement of our in-store customer experience.”

Dollarama confirms it has been working with the Montreal-based Orckestra e-commerce company, though it only is a research stage and has no immediate plans to launch into online retail.

“Competition will always intensify, the consumer will always ask for more and we cannot assume otherwise,” Ross said.

If Dollarama did begin selling online, it would likely be for a customer buying in bulk, not picking up a single box of tissue paper, he added.

“It’s more to look for ways to service customers who are looking for things in a Dollarama that we can’t service at the store level,” Ross said. “If a customer wants hundreds of an item, they would have to go to multiple stores and that’s simply impractical.”

On Thursday, the Montrealbased chain reported an 11.6 per cent sales increase to $729 million in the second quarter of fiscal 2017 ended July 31, compared to $653.3 million in the same period last year.

The company says this increase was partially driven by a 5.7 per cent growth in same-store sales, over and above a 7.9 per cent growth the previous year.

“The careful execution of our merchandising strategy and the implementation of operational improvements have made us stronger as we grow,” said Dollarama chief executive Neil Rossy. “We also continue to reach new customers in an efficient manner, while providing a consistent shopping experience across our network of stores.”

Dollarama Inc. reported net earnings increased to $106.4 million, or 88 cents per share, in the second quarter, compared to $95.5 million, or 74 cents per share in Q2 of fiscal 2016.

Following the earnings report, the company’s stock climbed more than three per cent to an all-time high of $100.08 by 12:25 p.m.in Toronto.