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MarketScreener Homepage  >  Equities  >  Toronto Stock Exchange  >  Dollarama Inc.    DOL   CA25675T1075

DOLLARAMA INC.

(DOL)
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Delayed Quote. Delayed Toronto Stock Exchange - 01/19 04:00:00 pm
51.24 CAD   --.--%
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2020DOLLARAMA INC. : - sale of shares by dollarama insiders
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Dollarama : Gardeners, grillers and swimmers fuel Dollarama sales surge in second quarter

09/02/2020 | 09:34am EST

MONTREALDollarama Inc. enjoyed a seven per cent sales boost and flat profits in its second quarter as Canadians bought seasonal items for home and patio during the pandemic’s summer months.

"Our sales mix reflects the fact that our customers are spending more time at home — think more gardening, more barbecue, things of that nature,” CEO Neil Rossy said on a conference call with analysts Wednesday.

While purchases of impulse items such as candy and chewing gum dropped off, the spike in seasonal products such as pool toys meant higher margins, he said.

Dollarama started the quarter with 104 of its more than 1,300 stores temporarily closed — mainly in Quebec malls — due to provincial health measures, while the vast majority of the others were operating under reduced hours. By June 19, all stores were reopened on top of 13 new locations, with only six per cent now operating at reduced hours.

The average transaction size ballooned by 42 per cent, mitigated by a 26 per cent drop in the number of transactions.

"Customers continue to consolidate their trips, but they leave the stores with larger baskets," Rossy said.

The coronavirus incurred incremental costs of $32.4 million last quarter due to additional health measures and a temporary wage increase, which ended in early August after being extended for a month and a half beyond the expected date.

Employees received a 10 per cent pay increase beginning in late March while warehouse workers saw a $3 raise on an income that starts near minimum wage, which in Quebec is $13.10. The so-called pandemic pay program applicable to most of its 20,000-plus workers cost Dollarama roughly $11 million in its second quarter, leaving it with profits of $142.5 million.

The company has faced blowback from advocacy groups and workers who are demanding higher wages and better working conditions after the retailer spiked the pay hike.

Rossy rejected the notion of discontent in the ranks.

"The morale in the field is excellent and the hiring status is excellent. We're very happy with that situation, and our employees seem to be very, very comfortable, at ease with how we've handled the situation to date," he said.

Dollarama and several other retailers launched their pandemic pay programs as COVID-19 began to spread throughout Canada, triggering unprecedented working conditions amid a shopping frenzy that left some store shelves bare as companies scrambled to restock products.

The Montreal-based company topped expectations as it reported a second-quarter profit of 46 cents per diluted share for the quarter ended Aug. 2 compared with a profit of $143.2 million or 45 cents per diluted share in the same quarter a year earlier when it had more shares outstanding.

Sales in the quarter climbed to $1.01 billion from $946 million a year ago, boosted in part by a run on cleaning products.

"Compared to the roller coaster we experienced in Q1 with the shift from panic buying to full lockdown, the situation stabilized on several fronts during Q2. We saw a steady improvement in customer traffic throughout the quarter," Rossy said.

Analysts on average had expected a profit of 42 cents per share and $975.7 million in revenue, according to financial markets data firm Refinitiv.

Comparable store sales excluding temporarily closed stores grew 5.4 per cent, while comparable store sales including temporarily closed stores rose 2.5 per cent.

This report by The Canadian Press was first published Sept. 2, 2020.

Companies in this story: (TSX:DOL)

© 2020 The Canadian Press. All rights reserved., source Canadian Press DataFile

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Financials
Sales 2021 4 096 M 3 224 M 3 224 M
Net income 2021 591 M 465 M 465 M
Net Debt 2021 2 238 M 1 762 M 1 762 M
P/E ratio 2021 27,4x
Yield 2021 0,35%
Capitalization 15 898 M 12 481 M 12 515 M
EV / Sales 2021 4,43x
EV / Sales 2022 4,12x
Nbr of Employees 14 230
Free-Float 93,5%
Chart DOLLARAMA INC.
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Dollarama Inc. Technical Analysis Chart | DOL | CA25675T1075 | MarketScreener
Technical analysis trends DOLLARAMA INC.
Short TermMid-TermLong Term
TrendsBearishBullishBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 14
Average target price 59,93 CAD
Last Close Price 51,24 CAD
Spread / Highest target 28,8%
Spread / Average Target 17,0%
Spread / Lowest Target 5,39%
EPS Revisions
Managers and Directors
NameTitle
Neil George Rossy President, Chief Executive Officer & Director
Stephen K. Gunn Chairman
Johanne Choinière Chief Operating Officer
Michael Ross Chief Financial Officer
Joshua Bekenstein Independent Director
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