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Industry NewsDollarama sales jump 11% in Q4; plans to open more stores

Dollarama sales jump 11% in Q4; plans to open more stores

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Dollarama posted an 11 per cent increase in fourth quarter sales and a 5.7 per cent increase for comparable store sales and says it plans to open 60 to 70 new stores for  fiscal 2023.

Demand for household essentials and seasonal items for the holiday season and growth of total number of stores were the main drivers behind the strong sales performance.

“Dollarama delivered strong operational and financial results in fiscal 2022, including EPS growth of 20 per cent, 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,” says Neil Rossy, president and CEO. “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.”

Sales for the fourth quarter increased to $1,224.9 million, compared to $1,103.7 million for the fourth quarter of fiscal 2021.

Dollarama says the 5.7 per cent increase in comparable sales reflects “full product assortment across all provinces during the quarter and strong seasonal product sales, whereas in the same period last year there was a temporary ban on the sale of non-essential items in Quebec, where the corporation has approximately 30 per cent of its stores, from December 26, 2020, to February 8, 2021.”

The company says overall sales and comparable store sales for the fourth quarter of fiscal 2022 were dampened by the impact of the omicron variant on consumer shopping patterns and by COVID-related provincial restrictions over critical sales weeks leading up to the holidays and carrying into the month of January.

Expansion plans

Dollarama says it plans to have 2,000 stores in Canada by 2031 and to support this, it’s building a new 500,000 sq foot warehouse in Laval, Que. that is expected to be operational by the end of the company’s fiscal 2023 year.

The company says it expects sales to pick up in the first half of fiscal 2023 with the lifting of pandemic restrictions but cautions that “supply chain and other inflationary pressures are expected to be felt more.”

Despite the market pressures, it expects to open 60 to 70 stores during its fiscal 2023, achieve a comparable store sales growth of 4.0 to 5.0 percent and to see an increase in gross margin as percentage of sales, between 42.9 and 43.9 per cent.

It also plans to gradually introduce additional price points up to $5 throughout fiscal 2023.

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