Costco Profit Beats Estimates on Healthy Consumer Spending
Costco Wholesale Corp. reported a quarterly profit that exceeded expectations, indicating that the company remains unfazed by tighter consumer spending. The results highlight Costco’s unique position among retailers, as its affluent customer base, which is willing to pay an annual membership, helps to insulate the company. The company’s ever-changing offering of jumbo-sized products, seen as good value, is drawing consumers, while the Kirkland brand remains a popular choice for customers.
Costco reported more members during their last quarter, and about 90% of existing members renewed their service. Shopper traffic rose on a same-store basis, but the number of transactions remained flat. Earnings were US$4.04 per share in the quarter ending Nov. 24, above the average analyst estimate compiled by Bloomberg.
Costco has reported increases in sales and traffic in recent months, with food and discretionary items like jewelry and home furnishings selling well. Comparable sales, excluding gasoline and currency impacts, rose 7.1% in the quarter. Costco was among the last retailers to report earnings in 2024.
Source: Financial Post
Source: Costco
Dollarama Reports Fiscal 2025 Third Quarter Results, Expedites Growth Plan and Announces new distribution Center
Dollarama Inc., plans to expand its Canadian presence by building 2,200 locations by 2034. The company, which currently operates 1,601 stores across the country, had previously set a goal of 2,000 locations by 2031. The new plan follows a thorough revaluation of the market potential for Dollarama stores. In recent years, Dollarama has typically opened 60 to 70 new locations a year, and sales have been growing as consumers feel the sting of inflation.
Third-quarter sales grew 5.7% year-over-year, reaching nearly $1.6 billion, driven by the opening of 60 new stores in the previous 12 months and rising sales at existing stores. The company plans to commission a new warehouse and distribution center in Calgary, which will handle logistics closer to its stores in Western Canada. The project is expected to cost around $450 million and will generate savings for the company, including on transportation costs.
Cautious consumers are shopping at Dollarama stores more often, although they are buying slightly less on average during each visit. Comparable sales rose 3.3%, compared with an 11.1% rise in the same quarter last year. Sales grew even though people splurged less on Halloween than last year, as sales of seasonal products were down while shoppers continued to buy more “consumable” items such as food and household products. Seasonal results were also affected by a calendar shift, with the final days leading up to Halloween occurring during the company’s fourth quarter.
Consumables come with tighter profit margins than other merchandise, leading to a slight decrease in the company’s gross profit margin, which fell to 44.7% of sales in the quarter, compared with 44.4% in the same period last year. Dollarama’s net earnings grew to $275.8-million in the quarter, up 5.6% from $261.1-million in the same period last year.
Source: Globe and Mail
Source: Dollarama
Source: Grocery Bussiness
Sobeys Parent Empire Reports $173.4m Q2 Profit, Sales Edge Higher
Empire has seen a positive inflection point for full service as consumer sentiment improves amid lower inflation and interest rates. The company’s CEO, Michael Medline, believes that this will be advantageous for Empire as it continues to lean into its strengths as a full-service foremost grocer. Empire has been increasing its discount store footprint through new stores and conversions, but also plans for its higher-end stores in Ontario.
The company earned a second-quarter profit of $173.4 million, compared with $181.1 million a year earlier. Sales for the quarter totalled $7.78 billion, up from $7.75 billion a year earlier. Same-store sales rose 1.1%, while same-store sales growth, excluding fuel sales, were up 1.8%. The company’s e-commerce sales grew 12.2% during the quarter, driven primarily by Voilà.
Empire plans to continue investing in its store network, including renovating approximately 20% to 25% of stores between fiscal 2024 and 2026. The company invested $149.2 million in capital expenditures, including renovations, construction of new stores, and other technological investments.
president and CEO Michael Medline said that the company completed the expansion of one of its distribution centers in Ontario, which has helped margins by redirecting some deliveries to the distribution center instead of individual stores. Empire also provided an update on its expansion of discount banner FreshCo in Western Canada, with 48 stores now operating in the region.
The company’s profit amounted to 73 cents per diluted share for the 13-week period ended Nov. 2, compared with a profit of 72 cents per diluted share a year ago when it had more shares outstanding.
Source: Financial Post
Source: The Star
