Dollarama Sees Rise in Second-Quarter Profits, Sales as Consumers Hunt for Bargains
Dollarama Inc. reported growth in sales and profit in its latest quarter, with traffic to its stores continuing to grow. This includes more visits from higher-income customers who might not have to or want to shop at Dollarama generally. The Montreal-based discount retailer reported that comparable sales grew by 4.7% in the second quarter ended July 28, building on growth in the same period last year.
Dollarama is still benefiting from strong demand for “consumables” such as food and household products. However, demand for the stores’ seasonal spring-summer products fell compared to last year due to consumers being more cautious with their discretionary spending and bad weather.
Overall, the stores saw a 7% increase in the number of transactions, while people are buying slightly less during each visit. The average transaction decreased by 2.2% in the quarter. On a per-share basis, Dollarama’s profits grew by 18.6% in the second quarter, and the company’s net earnings increased to $285.9-million, or $1.02 per share, compared with $245.8-million, or 86 cents per share, in the second quarter last year. Total sales grew by 7.4% compared to the same period the previous year, reaching $1.56-billion. The company opened 14 net new stores in the quarter, for a total of 1,583 locations as of July 28.
Dollarama Inc.‘s food aisles may have expanded far beyond sweet treats or piles of gum by the checkout counter in recent years, but its chief executive maintains his company is “not in the grocery business,” even if it’s keeping an eye on the sector. “It’s just one small part of our store,” Neil Rossy told analysts on a Wednesday call, where he was questioned about the company’s food merchandise and rivals playing in the same space.
Source: Globe and Mail
Source: The Star
Source: Financial Post
Source: Dollarama
Sobeys Parent Empire Sees Modest Sales Increase in First Quarter
Empire Co. Ltd., parent company of Sobeys, reported a modest increase in sales in its first quarter, but profits were impacted by the sale of gas stations and a recent decision to slow the pace of its e-commerce expansion. Net earnings fell to $207.8-million or 86 cents per share in the quarter ended Aug. 3, compared to $261-million or $1.03 per share in the same period the prior year.
Profits were impacted by a decline in fuel sales, related to last year’s sale of the company’s Western Canadian gas station locations to Shell Canada subsidiary Canadian Mobility Services Ltd. The $100-million deal closed in July, 2023. Empire also reported a non-cash charge in the quarter, related to its decision to end its exclusive partnership with e-commerce technology provider Ocado Group PLC.
Empire made changes to its leadership team and cut some jobs through employee buyouts during the summer. However, adjusted net earnings grew to $218.7-million or 90 cents per share in the quarter, compared to $196.2-million of 78 cents per share in the prior year.
Sales grew by 0.8% compared to the prior year, reaching $8.14-billion. Empire’s gross profit margins improved to 26.1% of sales in the quarter compared to 26.7% in the prior year. However, operating income fell in Empire’s grocery operations due to the sale of the western fuel business and rising expenses.
RBC analyst Irene Nattel said Empire’s operating results came in “a tick above forecast as consumer value-seeking behaviour stabilizes.” She said the company continues to execute on its strategy to maximize revenue in its full-service stores, despite the broader momentum in discount stores, though she noted Empire is also growing its discount presence.
Source: Globe and Mail
Source: CTV News
Wholesale Corporation Reports Fourth Quarter and Fiscal Year 2024 Operating Results
Costco reported mixed fiscal fourth quarter results, with earnings per share beating estimates at $5.29, but revenue slightly missed expectations at $79.7 billion. CFO Gary Millerchip emphasized the importance of quality and value, citing the dissipation of inflation and increased spending on nonfood items among members. Costco stock fell 1.4% in extended trading, but year to date, shares have risen nearly 40%, compared to a 20% gain for the S&P 500.
Costco Wholesale missed market expectations for fourth-quarter revenue due to cautious consumer spending on pricier items at its membership-only stores and lower gasoline prices.
Ultra-low prices are driving demand for groceries and kitchen staples, while spending on furniture, home, and sporting goods has been choppy, hurting sales at Costco’s warehouses.
Consumers are looking for more deals, and appliances and electronics categories became more promotional over time. Online shopping is also driving sales for retailers as consumers look for the convenience of choice and delivery.
Costco has worked on drawing more sales through its website and mobile app, but its e-commerce sales growth slowed to 18.9% from 20.7% in the previous quarter. Same-store sales also took a hit from lower gasoline prices, growing 5.4% in the reported period ended Sept. 1, compared with a 6.6% rise in the third quarter.
Costco’s fourth-quarter revenue rose nearly 1% to $79.70 billion, falling short of analysts’ average estimate of $79.97 billion. However, net income of $5.29 per share beat estimates of $5.08 apiece, as gross margins grew by 40 basis points.
Costco announced in July that it would hike its annual membership fee by $5 to $65 for “gold star” members and to $130 from $120 for executive members, effective Sept. 1.
Source: Costco
Source: Reuters
Source: Yahoo Finance
