Discount chain reported a Q4 profit — and plans for expansion
Dollarama ended the year with a strong fourth quarter, an increase it credits to higher customer spending.
For the fourth quarter ended January 29, 2017, the Canadian discount retailer’s sales increased by 11.5% to $854.5 million. The chain’s gross margin was 41.4% of sales, compared to 40.8% of sales.
Comparable store sales grew 5.8% — this was on top of 7.9% growth for the same period last year. The chain also opened 26 net new stores during the fourth quarter of Fiscal 2017, compared to 25 net new stores during the corresponding period of the previous fiscal year.
For the year, sales increased by 11.8% to $2,963.2 million, and gross margin was 39.2% of sales, compared to 39.0% of sales.
Comparable store sales grew 5.8%, above 7.3% growth the previous year. During the year, there was a 1.9% decrease in the number of transactions, however there was a 7.8% increase in the average transaction size. The company opened 65 net new stores during fiscal 2017.
"Our financial and operating results for Fiscal 2017 reflect the strength of our business strategy and our execution,” said Neil Rossy, president and CEO.
“We realized a particularly strong fourth quarter with solid comparable store sales reflecting, in part, the continued customer appeal of our product offering, with gross margin also ahead of guidance," he stated. “Thanks to outstanding execution by our operational and real estate teams, we opened 26 net new stores during our busiest quarter. Also, following a review of the market potential for Dollarama stores across Canada, we have revised our long-term target from 1,400 to 1,700 stores. This provides Dollarama with several years of additional footprint growth.”
Dollarama’s new 500,000 square foot warehouse in the Lachine borough of Montreal, Québec will support this expansion. The new facility has added approximately 40% more warehousing capacity, and will “accommodate the company's future growth as it continues to expand its store network,” according to the chain.
Meanwhile, based on positive results of its year-long credit card pilot program, the chain plans to accept credit cards as a payment method in all stores across Canada in the second quarter of fiscal 2018.
For the fourth quarter ended January 29, 2017, the Canadian discount retailer’s sales increased by 11.5% to $854.5 million. The chain’s gross margin was 41.4% of sales, compared to 40.8% of sales.
Comparable store sales grew 5.8% — this was on top of 7.9% growth for the same period last year. The chain also opened 26 net new stores during the fourth quarter of Fiscal 2017, compared to 25 net new stores during the corresponding period of the previous fiscal year.
For the year, sales increased by 11.8% to $2,963.2 million, and gross margin was 39.2% of sales, compared to 39.0% of sales.
Comparable store sales grew 5.8%, above 7.3% growth the previous year. During the year, there was a 1.9% decrease in the number of transactions, however there was a 7.8% increase in the average transaction size. The company opened 65 net new stores during fiscal 2017.
"Our financial and operating results for Fiscal 2017 reflect the strength of our business strategy and our execution,” said Neil Rossy, president and CEO.
“We realized a particularly strong fourth quarter with solid comparable store sales reflecting, in part, the continued customer appeal of our product offering, with gross margin also ahead of guidance," he stated. “Thanks to outstanding execution by our operational and real estate teams, we opened 26 net new stores during our busiest quarter. Also, following a review of the market potential for Dollarama stores across Canada, we have revised our long-term target from 1,400 to 1,700 stores. This provides Dollarama with several years of additional footprint growth.”
Dollarama’s new 500,000 square foot warehouse in the Lachine borough of Montreal, Québec will support this expansion. The new facility has added approximately 40% more warehousing capacity, and will “accommodate the company's future growth as it continues to expand its store network,” according to the chain.
Meanwhile, based on positive results of its year-long credit card pilot program, the chain plans to accept credit cards as a payment method in all stores across Canada in the second quarter of fiscal 2018.