Dollarama Inc. has reported its financial results for the fourth quarter and fiscal year ended January 30, 2022. The highlights from the results are as follows. 

Fiscal 2022 Fourth Quarter Results Highlights Compared to Fiscal 2021 Fourth Quarter Results

  • Sales increased by 11.0% to $1,224.9 million
  • Comparable store sales grew 5.7%
  • Gross margin was 45.2% of sales, compared to 45.5% of sales
  • EBITDA increased by 20.4% to $393.7 million, or 32.1% of sales, compared to 29.6% of sales
  • Operating income increased by 23.3% to $315.7 million, or 25.8% of sales, compared to 23.2% of sales
  • Incremental direct costs related to COVID-19 measures totalled $4.4 million, compared to $23.8 million
  • Diluted net earnings per share increased by 32.1% to $0.74, compared to $0.56
  • 24 net new stores were opened, compared to 23 net new stores
  • 5,090,587 common shares were repurchased for cancellation for $318.5 million

Fiscal 2022 Results Highlights Compared to Fiscal 2021 Results

  • Sales increased by 7.6% to $4,330.8 million
  • Comparable store sales grew 1.7%
  • Gross margin was 43.9% of sales, compared to 43.8% of sales
  • EBITDA increased by 13.4% to $1,282.6 million, or 29.6% of sales, compared to 28.1% of sales
  • Operating income increased by 14.4% to $984.6 million, or 22.7% of sales, compared to 21.4% of sales
  • Incremental direct costs related to COVID-19 measures totalled $35.5 million, compared to $84.0 million, of which $2.9 million relates to cost of sales and $81.1 million to SG&A
  • Diluted net earnings per share increased by 20.4% to $2.18, compared to $1.81
  • 65 net new stores were opened, same as prior year, bringing total store count to 1,421
  • 18,176,760 common shares were repurchased for cancellation for $1,059.9 million

“Dollarama delivered strong operational and financial results in Fiscal 2022, including EPS growth of 20%, all this while navigating the ebb and flow of the pandemic’s impacts on retailers and consumer shopping patterns and in the context of supply chain and inflationary pressures. This remarkable performance speaks to the resilience of our business model and the relevance of our value promise to Canadian consumers, a promise we are committed to fulfilling in what remains a complex and volatile environment as we enter Fiscal 2023,” said Neil Rossy, President and CEO. 

Dollarama Inc. also announced the roll out of additional price points up to $5 in order to help the retail chain maintain and enhance its product assortment and value. “There will be a gradual ramp up starting mid-year and becoming more noticeable through the second half of the year,” Rossy said. “This brings additional flexibility to manage cost pressures in a heightened inflationary environment.”

But the store is “extremely sensitive to this not simply being a markup tool,” Rossy added. “It enables us to deepen our broad and compelling product assortment,” Rossy said. “It allows us to bring in goods that we’ve never been able to buy because they weren’t in our price range.”

Looking forward, Dollarama said it expects to benefit from a more upbeat sales environment in the coming months compared with the same period in 2021 when pandemic restrictions limited non-essential shopping. However, the company cautioned that supply chain and other inflationary pressures are expected to be felt more this year.

“Our procurement and logistics teams have been working relentlessly to ensure that stores are well-stocked, especially from a seasonal perspective,” Rossy said. The challenge isn’t supply but rather getting goods into Dollarama’s warehouses and on store shelves, he said. “The supply is really very stable,” Rossy said. “It’s more a question of logistics challenges between the supply and the store and that involves mostly overseas challenges and port challenges (and) a little bit of trucking challenges.”

Still, Dollarama has an ample buffer built into its business model, which means even if seasonal products arrive at the company’s warehouses later than usual they will still hit store shelves on time, he said. “We can cover these issues and mitigate those risks better than most,” Rossy said.

Meanwhile, Dollarama said it expects its new warehouse in Laval, Que., to open by the end of its current fiscal year, increasing its storage capacity and supporting its long-term target of 2,000 stores in Canada by 2031.

Source: Globe and Mail
Source: The Star
Source: Financial Post
Source: Dollarama