THE CANADIAN PRESS
MONTREAL — Dollarama Inc.’s expansion drive has decreased margins slightly due to the cost of store openings but has paid off with a 16 per cent increase in second-quarter sales and a higher net profit, Canada’s largest discount retailer said Wednesday.
“We are very satisfied with the financial and operating results being reported for our second quarter,” said Larry Rossy, Dollarama’s chairman and chief executive.
“These results demonstrate the growth of our business through our store expansion across Canada, the success of our merchandising strategy and our team’s ability to execute on our operating plans.”
Net income was $59.8 million or 82 cents per diluted share, up about 24 per cent from a year earlier, when Montreal-based Dollarama (TSX:DOL) had $49.8 million or 66 cents per diluted share net income
Second-quarter sales rose to $511.3 million, a 16 per cent increase over the same time last year, up from $440 million a year earlier. Dollarama’s comparable-store sales also increased by 6.2 per cent. .
The results were better than expected. Estimates compiled by Thomson Reuters called for $503.7 million of revenue and 79 cents per share of net income, or 78 cents per share on an adjusted basis.
Dollarama says its store openings reduced gross margin by about 0.2 per cent in the second quarter but predicted the impact will fall over the next two quarters.
The Montreal-based company added 93 stores over the 12 months ended Aug. 4, including 22 in its fiscal second quarter, bringing the total across Canada to 828.