- 5.6% comparable store sales(1) growth and 22.2%
increase in diluted net earnings per share to $0.77
- Dollarama increases equity interest in LATAM partnership and
expands countries of operation to include Mexico
- Long-term store target for Dollarcity increased from 850
stores by 2029 to 1,050 by 2031 in current four markets of
operation
MONTREAL, June 12,
2024 /PRNewswire/ - Dollarama Inc. (TSX: DOL)
("Dollarama" or the "Corporation") today reported its financial
results for the first quarter ended April
28, 2024.
Dollarama also announced today that it has acquired an
additional 10.0% equity interest in Latin American value retailer
Dollarcity, increasing its total equity interest to 60.1%, and that
it has expanded its partnership countries to include Mexico. See separate press release for more
details.
Fiscal 2025 First Quarter Results Highlights Compared to
Fiscal 2024 First Quarter Results
- Sales increased 8.6% to 1,405.8 million
- Comparable store sales grew 5.6%, over and above 17.1% growth
in the corresponding period of the previous year
- EBITDA(1) increased 14.0% to $417.7 million, representing an EBITDA
margin(1) of 29.7%, compared to 28.3%
- Operating income increased 16.0% to $322.0 million, representing an operating
margin(1) of 22.9%, compared to 21.4%
- Diluted net earnings per common share increased 22.2% to
$0.77, compared to $0.63
- 18 net new stores opened, compared to 21 net new stores
- 1,281,166 common shares repurchased for cancellation for
$145.5 million
"As anticipated, we are seeing a progressive normalization in
comparable store sales, with growth primarily driven by persistent
higher than historical demand for core consumables and other
everyday essentials. As Canadian consumers continue to seek out
compelling value for their hard-earned money, we will remain
focused on executing on our value and convenience
promise," said Neil Rossy, President and CEO.
"Like Dollarama in Canada, the
Dollarcity value proposition is resonating with consumers in LATAM.
The increase in Dollarcity's long-term target to 1,050 stores by
2031 in their current four countries of operation speaks to the
untapped growth potential in these markets and more broadly, the
relevance of our retail model across geographies and demographics,"
added Mr. Neil Rossy.
_________________________________
|
(1) Refer to
the section entitled "Non-GAAP and Other Financial Measures" of
this press release for the definition of these items and, where
applicable, their reconciliation with the most directly comparable
GAAP measure.
|
Fiscal 2025 First Quarter Financial Results
Sales for the first quarter of fiscal 2025 increased by 8.6% to
$1,405.8 million, compared to
$1,294.5 million in the
corresponding period of the prior fiscal year. This increase was
driven by growth in the total number of stores over the past
12 months (from 1,507 stores on April 30, 2023, to 1,569 stores on April 28, 2024) and comparable store
sales growth.
Comparable store sales for the first quarter of fiscal 2025
increased by 5.6%, consisting of an 8.7% increase in the number of
transactions and a 2.8% decrease in average transaction size, over
and above comparable store sales growth of 17.1% in the
corresponding period of the prior fiscal year. The increase in
comparable store sales was driven primarily by strong customer
demand for consumables.
Gross margin(1) was 43.2% of sales in the first
quarter of fiscal 2025, compared to 42.2% of sales in the first
quarter of fiscal 2024. Gross margin as a percentage of sales was
higher primarily as a result of lower inbound shipping costs,
mainly driven by the positive impact of renewed contracts with
carriers, as well as lower logistics costs.
General, administrative and store operating expenses
("SG&A") for the first quarter of fiscal 2025 increased by
11.0% to $217.2 million,
compared to $195.6 million for
the first quarter of fiscal 2024. SG&A represented 15.4% of
sales for the first quarter of fiscal 2025, compared to 15.1% of
sales for the first quarter of fiscal 2024. This variance reflects
higher store labour and operating costs.
EBITDA totalled $417.7 million, representing an EBITDA
margin of 29.7%, for the first quarter of fiscal 2025,
compared to $366.3 million, or
an EBITDA margin of 28.3%, in the first quarter of fiscal 2024.
The Corporation's 50.1% share of Dollarcity's net earnings for
the period from January 1, 2024, to
March 31, 2024, increased by 68.3% to $22.1 million, compared to $13.1 million for the same period last year.
The Corporation's investment in Dollarcity is accounted for as a
joint arrangement using the equity method.
Net financing costs were $36.5 million for the first quarter of
fiscal 2025, compared to $36.7 million for the first quarter of
fiscal 2024. The slight decrease reflects higher interest income
from invested capital, partially offset by a higher average
borrowing rate on Fixed Rate Notes and lease
liabilities.
Net earnings increased by 20.0% to $215.8 million, or $0.77 per diluted common share, in the first
quarter of fiscal 2025, compared to $179.9
million, or $0.63 per
diluted common share, in the first quarter of fiscal 2024.
Dollarcity Store Count and New Long-term Store Target
During its first quarter ended March 31,
2024, Dollarcity opened 15 net new
stores, compared to 8 net new stores in the same period
last year. As at March 31, 2024,
Dollarcity had 547 stores with 324 locations in
Colombia, 99 in Guatemala, 72 in El Salvador and
52 in Peru. This compares to
532 stores as at December 31, 2023.
Following an updated evaluation of the market potential for
Dollarcity stores in its current markets of operation, comprised of
Colombia, Guatemala, El
Salvador and Peru,
Dollarcity's management believes that it can profitably grow its
store network in these four markets to approximately 1,050 stores
by 2031, up from its previous long-term target of 850 stores by
2029. The increased store target reflects anticipated growth
primarily in Peru and Colombia.
______________________________
|
(1) Refer to
the section entitled "Non-GAAP and Other Financial Measures" of
this press release for the definition of these items and, where
applicable, their reconciliation with the most directly comparable
GAAP measure.
|
Normal Course Issuer Bid
During the first quarter of fiscal 2025, 1,281,166 common
shares were repurchased for cancellation under the Corporation's
normal course issuer bid for a total cash consideration of
$145.5 million, at a weighted
average price of $113.60
per share.
Dividend
On June 12, 2024, the Corporation announced that its
board of directors approved a quarterly cash dividend for holders
of common shares of $0.0920 per
common share. This dividend is payable on August 2, 2024 to
shareholders of record at the close of business on July
5, 2024. The dividend is designated as an "eligible dividend"
for Canadian tax purposes.
Publication of Fiscal 2024 ESG Report
Dollarama today published its fiscal 2024 ESG Report, prepared
in alignment with relevant Sustainability Accounting Standards
Board (SASB) standards and with an increasing number of
recommendations from the Taskforce on Climate-related Financial
Disclosures (TCFD). This latest report provides a comprehensive
overview of the Corporation's ESG strategy, governance oversight
and priority topics across five pillars: our products and
customers, our operations and climate strategy, our people, our
supply chain and our governance. It also provides an annual update
on key indicators, goals and initiatives.
Our fiscal 2024 ESG Report and accompanying SASB Index is in
complement to our previous ESG disclosure and related documents,
all available in the Sustainability section of
www.dollarama.com, and should be read in conjunction with our
regulatory filings.
Outlook(2)
The Corporation's financial annual guidance ranges for fiscal
2025 issued on April 4, 2024, as well
as the assumptions on which these ranges are based, remain
unchanged:
(as a percentage of
sales except net new store
openings in units and capital expenditures in millions
of dollars)
|
|
Fiscal
2025
|
|
Guidance
|
Net new store
openings
|
|
60 to 70
|
Comparable store
sales
|
|
3.5% to 4.5%
|
Gross margin
|
|
44.0% to
45.0%
|
SG&A
|
|
14.5% to
15.0%
|
Capital
expenditures
|
|
$175.0 to
$200.0
|
These guidance ranges are based on several assumptions, including
the following:
- The number of signed offers to lease and store pipeline for the
remainder of fiscal 2025, the absence of delays outside of our
control on construction activities and no material increases in
occupancy costs in the short- to medium-term
- Approximately three months visibility on open orders and
product margins
- Continued positive customer response to our product offering,
value proposition and in-store merchandising
- The active management of product margins, including through
pricing strategies and product refresh, and of inventory
shrinkage
- The Corporation continues to account for its investment
in Dollarcity as a joint arrangement using the equity
method
- The entering into of foreign exchange forward contracts to
hedge the majority of forecasted merchandise purchases in USD
against fluctuations of CAD against USD
- The continued execution of in-store productivity initiatives
and realization of cost savings and benefits aimed at improving
operating expense
- The absence of a significant shift in labour, economic and
geopolitical conditions, or material changes in the retail
environment
- No significant changes in the capital budget for fiscal 2025
for new store openings, maintenance and transformational capital
expenditures, the latter mainly related to IT projects
- The absence of unusually adverse weather, especially in peak
seasons around major holidays and celebrations
Many factors could cause actual results, level of activity,
performance or achievements or future events or developments to
differ materially from those expressed or implied by the foregoing
forward-looking statements, including the fiscal 2025 guidance
and the underlying assumptions. These statements, including the
various underlying assumptions, are forward-looking and should be
read in conjunction with the cautionary statement on
forward-looking statements.
_________________________________
|
(2) To be
read in conjunction with the "Forward-Looking Statements" section
of this press release.
|
Forward-Looking Statements
Certain statements in this press release about our current and
future plans, expectations and intentions, results, levels of
activity, performance, goals or achievements or any other future
events or developments constitute forward-looking statements. The
words "may", "will", "would", "should", "could", "expects",
"plans", "intends", "trends", "indications", "anticipates",
"believes", "estimates", "predicts", "likely" or "potential" or the
negative or other variations of these words or other comparable
words or phrases, are intended to identify forward-looking
statements.
Forward-looking statements are based on information currently
available to management and on estimates and assumptions made by
management regarding, among other things, general economic and
geopolitical conditions and the competitive environment within the
retail industry in Canada and in
Latin America, in light of its
experience and perception of historical trends, current conditions
and expected future developments, as well as other factors that are
believed to be appropriate and reasonable in the circumstances.
However, there can be no assurance that such estimates and
assumptions will prove to be correct. Many factors could cause
actual results, level of activity, performance or achievements or
future events or developments to differ materially from those
expressed or implied by the forward-looking statements, including
the factors which are outlined in the management's discussion and
analysis for the first quarter of the fiscal year ending
February 2, 2025 and discussed in
greater detail in the "Risks and Uncertainties" section of the
Corporation's annual management's discussion and analysis for the
fiscal year ended January 28, 2024,
both available on SEDAR+ at www.sedarplus.com and on the
Corporation's website at www.dollarama.com.
These factors are not intended to represent a complete list of
the factors that could affect the Corporation or Dollarcity;
however, they should be considered carefully. The purpose of the
forward-looking statements is to provide the reader with a
description of management's expectations regarding the
Corporation's and Dollarcity's financial performance and may not be
appropriate for other purposes. Readers should not place undue
reliance on forward-looking statements made herein. Furthermore,
unless otherwise stated, the forward-looking statements contained
in this press release are made as at June 12, 2024 and
management has no intention and undertakes no obligation to update
or revise any forward-looking statements, whether as a result of
new information, future events or otherwise, except as required by
law. The forward-looking statements contained in this press release
are expressly qualified by this cautionary statement.
Virtual Shareholder Meeting and First Quarter Results
Conference Call
Dollarama will hold its annual general meeting of shareholders
today, June 12, 2024 at 9:00 a.m. (ET). The meeting will be conducted
virtually, via live audio webcast. All shareholders of record as of
the close of business on April 18,
2024 will be able to listen to the live audio webcast and
submit questions. However, only registered shareholders and duly
appointed proxyholders (including non-registered shareholders who
have duly appointed themselves as proxyholder) will be able to vote
at the meeting.
Dollarama will also hold a conference call to discuss its fiscal
2025 first quarter results and the Dollarcity transaction today,
June 12, 2024 at 11:00 a.m. (ET) followed by a
question and answer period for financial analysts only. Other
interested parties may participate in the call on a listen-only
basis via live audio webcast accessible through Dollarama's website
at www.dollarama.com/en-CA/corp/events-presentations.
About Dollarama
Dollarama is a recognized Canadian value retailer offering a
broad assortment of consumable products, general merchandise and
seasonal items both in-store and online. Our 1,569 locations across
Canada provide customers with
compelling value in convenient locations, including metropolitan
areas, mid-sized cities and small towns. Select products are also
available, by the full case only, through our online store at
www.dollarama.com. Our quality merchandise is sold at select fixed
price points up to $5.00.
Dollarama also owns a 60.1% interest in Dollarcity, a growing
Latin American value retailer. Dollarcity offers a broad assortment
of consumable products, general merchandise and seasonal items at
select, fixed price points up to US$4.00 (or the equivalent in local currency) in
547 conveniently located stores in El
Salvador, Guatemala,
Colombia and Peru.
www.dollarama.com
Selected Consolidated Financial Information
|
|
13-Week Periods
Ended
|
|
(dollars and shares
in thousands, except per share amounts)
|
|
April
28,
2024
|
|
April
30,
2023
|
|
|
|
$
|
|
$
|
|
Earnings
Data
|
|
|
|
|
|
Sales
|
|
1,405,772
|
|
1,294,549
|
|
Cost of
sales
|
|
798,496
|
|
748,807
|
|
Gross profit
|
|
607,276
|
|
545,742
|
|
SG&A
|
|
217,166
|
|
195,598
|
|
Depreciation and
amortization
|
|
90,162
|
|
85,638
|
|
Share of net earnings
of equity-accounted investment
|
|
(22,090)
|
|
(13,125)
|
|
Operating
income
|
|
322,038
|
|
277,631
|
|
Net financing
costs
|
|
36,523
|
|
36,685
|
|
Earnings before income
taxes
|
|
285,515
|
|
240,946
|
|
Income taxes
|
|
69,672
|
|
61,073
|
|
Net earnings
|
|
215,843
|
|
179,873
|
|
|
|
|
|
|
|
Basic net earnings per
common share
|
|
$0.77
|
|
$0.63
|
|
Diluted net earnings
per common share
|
|
$0.77
|
|
$0.63
|
|
|
|
|
|
|
|
Weighted average number
of common shares outstanding:
|
|
|
|
|
|
Basic
|
|
278,707
|
|
284,811
|
|
Diluted
|
|
279,686
|
|
286,179
|
|
|
|
|
|
|
|
Other
Data
|
|
|
|
|
|
Year-over-year sales
growth
|
|
8.6 %
|
|
20.7 %
|
|
Comparable store sales
growth (1)
|
|
5.6 %
|
|
17.1 %
|
|
Gross margin
(1)
|
|
43.2 %
|
|
42.2 %
|
|
SG&A as a % of
sales (1)
|
|
15.4 %
|
|
15.1 %
|
|
EBITDA
(1)
|
|
417,743
|
|
366,269
|
|
Operating margin
(1)
|
|
22.9 %
|
|
21.4 %
|
|
Capital
expenditures
|
|
46,267
|
|
47,083
|
|
Number of stores
(2)
|
|
1,569
|
|
1,507
|
|
Average store size
(gross square feet) (2) (3)
|
|
10,430
|
|
10,417
|
|
Declared dividends per
common share
|
|
$0.0920
|
|
$0.0708
|
|
|
|
|
As at
|
|
(dollars in
thousands)
|
|
April 28,
2024
|
|
January 28,
2024
|
|
|
|
$
|
|
$
|
|
Statement of
Financial Position Data
|
|
|
|
|
|
Cash and cash
equivalents
|
|
292,602
|
|
313,915
|
|
Inventories
|
|
888,022
|
|
916,812
|
|
Total current
assets
|
|
1,242,585
|
|
1,309,093
|
|
Property, plant and
equipment
|
|
963,673
|
|
950,994
|
|
Right-of-use
assets
|
|
2,043,791
|
|
1,788,550
|
|
Total assets
|
|
5,489,033
|
|
5,263,607
|
|
Total current
liabilities
|
|
593,414
|
|
677,846
|
|
Total non-current
liabilities
|
|
4,468,093
|
|
4,204,913
|
|
Total debt
(1)
|
|
2,255,292
|
|
2,264,394
|
|
Net debt
(1)
|
|
1,962,690
|
|
1,950,479
|
|
Shareholders'
equity
|
|
427,526
|
|
380,848
|
|
|
|
|
|
|
(1)
|
Refer to the section
entitled "Non-GAAP and Other Financial Measures" of this press
release for the definition of these items and, where applicable,
their reconciliation with the most directly comparable GAAP
measure.
|
|
(2)
|
At the end of the
period.
|
|
(3)
|
The Corporation revised
its prior years square footage information to align with its
current and updated methodology.
|
|
Non-GAAP and Other Financial Measures
The Corporation prepares its financial information in accordance
with GAAP. Management has included non-GAAP and other financial
measures to provide investors with supplemental measures of the
Corporation's operating and financial performance. Management
believes that those measures are important supplemental metrics of
operating and financial performance because they eliminate items
that have less bearing on the Corporation's operating and financial
performance and thus highlight trends in its core business that may
not otherwise be apparent when relying solely on GAAP measures.
Management also believes that securities analysts, investors and
other interested parties frequently use non-GAAP and other
financial measures in the evaluation of issuers. Management also
uses non-GAAP and other financial measures to facilitate operating
and financial performance comparisons from period to period, to
prepare annual budgets and to assess their ability to meet the
Corporation's future debt service, capital expenditure and working
capital requirements.
The below-described non-GAAP and other financial measures do not
have a standardized meaning prescribed by GAAP and are therefore
unlikely to be comparable to similar measures presented by other
issuers and should be considered as a supplement to, not a
substitute for, or superior to, the comparable measures calculated
in accordance with GAAP.
(A) Non-GAAP Financial Measures
EBITDA
EBITDA represents operating income plus depreciation and
amortization and includes the Corporation's share of net earnings
of its equity-accounted investment. Management believes EBITDA
represents a supplementary metric to assess profitability and
measure the Corporation's underlying ability to generate liquidity
through operating cash flows.
|
|
13-Week Periods
Ended
|
(dollars in
thousands)
|
|
April
28,
2024
|
|
April
30,
2023
|
|
|
$
|
|
$
|
A reconciliation of
operating income to EBITDA is included below:
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
322,038
|
|
277,631
|
Add: Depreciation and
amortization
|
|
95,705
|
|
88,638
|
EBITDA
|
|
417,743
|
|
366,269
|
Total debt
Total debt represents the sum of long-term debt (including
unamortized debt issue costs, accrued interest and fair value hedge
– basis adjustment), short-term borrowings under the US commercial
paper program and other bank indebtedness (if any). Management
believes Total debt is a measure that facilitates the understanding
of the Corporation's corporate financial position in relation to
its financing obligations.
(dollars in
thousands)
|
As at
|
A reconciliation of
long-term debt to total debt is included below:
|
April 28,
2024
|
|
January 28,
2024
|
Senior unsecured notes
(the "Fixed Rate Notes") bearing interest at:
|
$
|
|
$
|
Fixed annual rate of
5.165% payable in equal semi-annual instalments,
maturing April 26,
2030
|
450,000
|
|
450,000
|
Fixed annual rate of
2.443% payable in equal semi-annual instalments,
maturing July
9, 2029
|
375,000
|
|
375,000
|
Fixed annual rate of
5.533% payable in equal semi-annual instalments,
maturing September 26,
2028
|
500,000
|
|
500,000
|
Fixed annual rate of
1.505% payable in equal semi-annual instalments,
maturing September 20,
2027
|
300,000
|
|
300,000
|
Fixed annual rate of
1.871% payable in equal semi-annual instalments,
maturing July 8,
2026
|
375,000
|
|
375,000
|
Fixed annual rate of
5.084% payable in equal semi-annual instalments,
maturing October 27,
2025
|
250,000
|
|
250,000
|
|
|
|
|
Unamortized debt issue
costs, including $1,176 (January 28, 2024 – $1,320) for the
credit facility
|
(8,467)
|
|
(9,049)
|
Accrued interest on the
Fixed Rate Notes
|
14,704
|
|
21,460
|
Fair value hedge –
basis adjustment on interest rate swap
|
(945)
|
|
1,983
|
Total
debt
|
2,255,292
|
|
2,264,394
|
Net debt
Net debt represents total debt minus cash and cash equivalents.
Management believes Net debt represents a measure to assess the
financial position of the Corporation including all financing
obligations, net of cash and cash equivalent.
(dollars in
thousands)
|
|
As at
|
|
|
April
28,
2024
|
|
January
28,
2024
|
|
|
$
|
|
$
|
A reconciliation of
total debt to net debt is included below:
|
|
|
|
|
|
|
|
|
|
Total debt
|
|
2,255,292
|
|
2,264,394
|
Cash and cash
equivalents
|
|
(292,602)
|
|
(313,915)
|
Net
debt
|
|
1,962,690
|
|
1,950,479
|
(B) Non-GAAP Ratios
Adjusted net debt to EBITDA ratio
Adjusted net debt to EBITDA ratio is a ratio calculated using
adjusted net debt over consolidated EBITDA for the last twelve
months. Management uses this ratio to partially assess the
financial condition of the Corporation. An increasing ratio would
indicate that the Corporation is utilizing more debt per dollar of
EBITDA generated.
(dollars in
thousands)
|
|
As at
|
|
|
April
28,
2024
|
|
January
28,
2024
|
|
|
$
|
|
$
|
A calculation of
adjusted net debt to EBITDA ratio is included below:
|
|
|
|
|
|
|
|
|
|
Net debt
|
|
1,962,690
|
|
1,950,479
|
Lease
liabilities
|
|
2,331,341
|
|
2,069,229
|
Unamortized debt issue
costs, including $1,176 (January 28, 2024 – $1,320)
for the credit facility
|
|
8,467
|
|
9,049
|
Fair value hedge -
basis adjustment on interest rate swap
|
|
945
|
|
(1,983)
|
Adjusted net
debt
|
|
4,303,443
|
|
4,026,774
|
|
|
|
|
|
EBITDA for the last
twelve-month period
|
|
1,912,640
|
|
1,861,166
|
Adjusted net debt to
EBITDA ratio
|
|
2.25x
|
|
2.16x
|
|
|
|
|
|
EBITDA margin
EBITDA margin represents EBITDA divided by sales. Management
believes that EBITDA margin is useful in assessing the performance
of ongoing operations and efficiency of operations relative to its
sales.
(dollars in
thousands)
|
|
13-Week Periods
Ended
|
|
|
April
28,
2024
|
|
April
30,
2023
|
|
|
$
|
|
$
|
A reconciliation of
EBITDA to EBITDA margin is included below:
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
417,743
|
|
366,269
|
Sales
|
|
1,405,772
|
|
1,294,549
|
EBITDA
margin
|
|
29.7 %
|
|
28.3 %
|
(C) Supplementary Financial Measures
Gross
margin
|
Represents gross profit
divided by sales, expressed as a percentage of sales.
|
Operating
margin
|
Represents operating
income divided by sales, expressed as a percentage of
sales.
|
SG&A as a % of
sales
|
Represents SG&A
divided by sales.
|
Comparable store
sales
|
Represents sales of
Dollarama stores, including relocated and expanded stores, open for
at least
13 complete fiscal months relative to the same period in the prior
fiscal year.
|
Comparable store
sales growth
|
Represents the
percentage increase or decrease, as applicable, of comparable store
sales
relative to the same period in the prior fiscal year.
|
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content:https://www.prnewswire.com/news-releases/dollarama-reports-fiscal-2025-first-quarter-results-302170700.html
SOURCE Dollarama Inc.