Dol­larama re­ports $133.5M Q4 profit, com­pa­ra­ble store sales growth slows

Com­pany plans to call at­ten­tion to goods it sells for $1.25 and less

The Standard (St. Catharines) - - Business - TARA DESCHAMPS

MON­TREAL — Dol­larama Inc. will fo­cus more of its at­ten­tion on its low­est priced prod­ucts in a bid to keep its com­pa­ra­ble store sales growth from slow­ing.

On a Thurs­day call with an­a­lysts, chief ex­ec­u­tive of­fi­cer Neil Rossy said the Mon­treal-based dol­lar store chain saw its thirdquar­ter com­pa­ra­ble store sales grow 3.1 per cent com­pared with 4.6 per cent in the same quar­ter a year ago.

The com­pa­ra­ble store sales growth for the pe­riod ended Oct. 28 was due to a four per cent in­crease in av­er­age trans­ac­tion size, but was par­tially off­set by a 0.9 per cent drop in the num­ber of trans­ac­tions and was im­pacted by a de­ci­sion to strate­gi­cally limit price in­creases in re­cent quar­ters.

To keep growth from stalling, Dol­larama said it will call at­ten­tion to prod­ucts it sells for $1.25 and less.

Asked if Dol­larama will drop prices on more ex­pen­sive items, Rossy said, “We are go­ing to start with the high­light­ing and then de­pend­ing on the re­sults of the high­light­ing, we might take fur­ther ac­tion.”

Dol­larama has been slowly in­tro­duc­ing higher price points in stores for years as it has grap­pled with in­creased com­pe­ti­tion from e-com­merce giant Ama­zon and Asian re­tail­ers Min­iso and Muji, which re­cently en­tered the Cana­dian mar­ket.

It’s also faced pric­ing chal­lenges from pe­ri­ods when the loonie’s value was de­pre­ci­at­ing or the North Amer­i­can Free Trade Agree­ment was be­ing rene­go­ti­ated.

Their high­est priced items go for $4.

Rossy stressed that Dol­larama is “com­fort­able” with that price point “for the mo­ment” be­cause he feels “there is still run­way ahead of us at the cur­rent price point.”

“We are more com­mit­ted than ever to high­light what I feel is a mis­con­cep­tion po­ten­tially,” he added. “It has been said we are no longer a dol­lar store, but in re­al­ity, we have a ton of less than a dol­lar, a dol­lar and $1.25 items.”

De­spite the price points ris­ing, Rossy de­scribed the com­pany’s re­cent per­for­mance as sta­ble and re­vealed it earned $133.5 mil­lion in its lat­est quar­ter, up from $130.1 mil­lion a year ago.

That profit amounted to 41 cents per di­luted share, up from 38 cents per share in the same quar­ter last year.

An­a­lysts on av­er­age had ex­pected a profit of 42 cents per share for the quar­ter, ac­cord­ing to Thom­son Reuters Eikon.

Sales for the quar­ter ended

Oct. 28 to­talled $864.3 mil­lion.

PAUL CHI­AS­SON THE CANA­DIAN PRESS

Dol­larama has been slowly in­tro­duc­ing higher price points in stores for years as it has grap­pled with in­creased com­pe­ti­tion from e-com­merce giant Ama­zon and Asian re­tail­ers Min­iso and Muji.

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