- 17.1% increase in comparable store sales(1)
- 22.1% growth in EBITDA(1) to $366.3 million, representing 28.3% of sales
- 28.6% increase in diluted net earnings per share
- Publication of comprehensive annual 2023 ESG Report in
alignment with SASB standards and TCFD recommendations
MONTREAL, June 7, 2023
/PRNewswire/ - Dollarama Inc. (TSX: DOL) ("Dollarama" or the
"Corporation") today reported its financial results for the first
quarter ended April 30,
2023.
Fiscal 2024 First Quarter Results Highlights Compared to
Fiscal 2023 First Quarter Results
- Sales increased by 20.7% to $1,294.5
million, compared to $1,072.9
million
- Comparable store sales grew 17.1%, over and above the 7.3%
growth in the previous year
- EBITDA increased by 22.1% to $366.3
million, or 28.3% of sales, compared to 28.0% of sales
- Operating income increased by 26.2% to $277.6 million, or 21.4% of sales, compared to
20.5% of sales
- Diluted net earnings per share increased by 28.6% to
$0.63, compared to $0.49
- 21 net new stores opened, compared to 10 net new stores
"Canadians from all walks of life continue to respond positively
to our compelling value proposition and affordable product mix. In
the context of persistent inflationary pressure, we delivered a 17%
increase in comparable store sales in the first quarter of Fiscal
2024. The first quarter also marked the opening of our
1,500th Dollarama store, a significant milestone as we
pursue our target of 2,000 stores across Canada by 2031," said Neil Rossy, President and CEO.
Mr. Rossy added: "We were also pleased to publish our 2023 ESG
Report this morning, outlining our evolving ESG strategy, as well
as our progress against our goals. The objective is to ensure that
we continue delivering on our value promise to our customers and
our shareholders as we advance our ESG priorities across our key
pillars, from our climate strategy to our people, products and
supply chain."
Explanatory
Notes
|
All comparative figures
that follow are for the first quarter ended April 30, 2023,
compared to the first quarter ended May 1, 2022. All
financial information presented in this press release has been
prepared in accordance with generally accepted accounting
principles in Canada ("GAAP") as set out in the CPA Canada Handbook
– Accounting under Part I, which incorporates International
Financial Reporting Standards (IFRS) as issued by the International
Accounting Standards Board (IASB). EBITDA, EBITDA margin, total
debt, net debt and adjusted net debt to EBITDA ratio, which are
referred to as "non-GAAP measures", are used to provide a better
understanding of the Corporation's financial results. For a
full explanation of the Corporation's use of non-GAAP and other
financial measures, please refer to the section entitled "Non-GAAP
and Other Financial Measures" of this press release. All references
to "Fiscal 2023" are to the Corporation's fiscal year ended
January 29, 2023 and to "Fiscal 2024" are to the Corporation's
fiscal year ending January 28, 2024.
|
(1)
|
We refer the reader to
the notes in the section entitled "Non-GAAP and Other Financial
Measures" of this press release for the definition of these items
and, when applicable, their reconciliation with the most directly
comparable GAAP measure.
|
Fiscal 2024 First Quarter Financial Results
Sales for the first quarter of Fiscal 2024 increased
by 20.7% to $1,294.5 million,
compared to $1,072.9 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 1,431 stores
on May 1, 2022, to 1,507 stores on
April 30, 2023) and increased
comparable store sales.
Comparable store sales for the first quarter of Fiscal 2024
increased by 17.1%, reflecting a 15.5% increase in the number of
transactions and a 1.4% increase in average transaction size,
compared to comparable store sales growth of 7.3% in the
corresponding period of the previous fiscal year. The
year-over-year increase in comparable store sales is primarily
attributable to strong demand across our product categories, namely
consumables, seasonal items and general merchandise.
EBITDA totalled $366.3 million, or
28.3% of sales, for the first quarter of Fiscal 2024, compared to
$300.0 million, or 28.0% of
sales, in the first quarter of Fiscal 2023.
Gross margin(1) remained relatively flat
year-over-year, coming in at 42.2% of sales in the first quarter of
Fiscal 2024, compared to 42.1% of sales in the first quarter of
Fiscal 2023.
General, administrative and store operating expenses
("SG&A") for the first quarter of Fiscal 2024 increased to
$195.6 million, compared to
$160.6 million for the first quarter
of Fiscal 2023. SG&A represented 15.1% of sales, compared to
15.0% of sales for the first quarter of Fiscal 2023. This increase
in costs is primarily attributed to higher store labour costs.
The Corporation's 50.1% share of Dollarcity's net earnings for
the period from January 1, 2023, to
March 31, 2023, was $13.1
million, compared to $8.7
million for the same period last year, reflecting a strong
financial and operational performance by Dollarcity. The
Corporation's investment in Dollarcity is accounted for as a joint
arrangement using the equity method.
Financing costs increased by $12.3
million, from $24.4 million
for the first quarter of Fiscal 2023 to $36.7 million for the first quarter of
Fiscal 2024. The increase is mainly due to a higher average
borrowing rate, as well as higher average debt levels.
Net earnings were $179.9 million,
or $0.63 per diluted common share, in
the first quarter of Fiscal 2024, compared to $145.5 million, or $0.49 per diluted common share, in the first
quarter of Fiscal 2023.
Inventory remained stable at $937.7
million as at April 30, 2023,
compared to $957.2 million as at
January 29, 2023.
Dollarcity Store Growth
During its first quarter ended March 31,
2023, Dollarcity opened 8 net new stores, in line with
the same period last year. As at March 31,
2023, Dollarcity had 448 stores, including 267 locations in
Colombia, 91 in Guatemala, 66 in El Salvador and 24 in
Peru. This compares to 440 stores
as at December 31, 2022.
Normal Course Issuer Bid
During the first quarter of Fiscal 2024, no common shares were
repurchased for cancellation under the Corporation's 2022-2023
normal course issuer bid.
Dividend
On June 7, 2023, the Corporation
announced that its board of directors had approved a quarterly cash
dividend for holders of common shares of $0.0708 per common share. This dividend is
payable on August 4, 2023 to shareholders of record at the
close of business on July 7, 2023.
The dividend is designated as an "eligible dividend" for Canadian
tax purposes.
(1)
|
We refer the reader to
the notes in the section entitled "Non-GAAP and Other Financial
Measures" of this press release for the definition of these items
and, when applicable, their reconciliation with the most directly
comparable GAAP measure.
|
Publication of 2023 ESG Report
Dollarama today published its comprehensive 2023 ESG Report:
Serving Canadians with Purpose. This latest report provides a
comprehensive overview of the Corporation's ESG strategy and
evolving priority issues, as identified through its ongoing
assessment process and stakeholder engagement. It also provides an
annual update on key data, goals and initiatives. The Corporation's
2023 ESG Report was prepared in alignment with the Sustainability
Accounting Standards Board (SASB) standards relevant to its
industry sectors and with an increasing number of recommendations
from the Taskforce on Climate-related Financial Disclosures (TCFD)
framework.
Intended for all stakeholders and to be read in conjunction with
regulatory filings, Dollarama's 2023 ESG Report and supporting
documents are available for download in the Sustainability section
of www.dollarama.com.
Outlook
The Corporation's financial annual guidance ranges for Fiscal
2024 issued on March 29, 2023, as
well as other previously disclosed assumptions on which these
ranges are based, remain unchanged.
As previously disclosed, the Corporation expects the following
for Fiscal 2024:
|
Fiscal
2024
|
Guidance
|
Net new store
openings
|
60 to 70
|
Comparable store
sales
|
5.0% and
6.0%
|
Gross margin
|
43.5% to
44.5%
|
SG&A(i)
|
14.7% to
15.2%
|
Capital
expenditures(ii)
|
$190.0 to
$200.0(iii)
|
(i)
|
As a percentage of
sales.
|
(ii)
|
In millions of
dollars.
|
(iii)
|
Excludes the previously
announced property acquisition expected to close in Fiscal
2024.
|
These guidance ranges are based on several assumptions, including
the following:
- The number of signed offers to lease and store pipeline for the
next nine months and the absence of delays outside of our control
on construction activities
- No material increases in occupancy costs in the short to medium
term
- Continued positive customer response to our product offering,
value proposition and in-store merchandising
- Approximately three months of visibility on open orders and
product margins
- The active management of product margins, including through
pricing strategies and refreshing some of the product offering
- The continued stabilisation of our supply chain and logistics
environment
- The inclusion of the Corporation's share of net earnings of its
equity-accounted investment
- The entering into of foreign exchange forward contracts to
hedge the majority of forecasted purchases of merchandise in U.S.
dollars against fluctuations of the Canadian dollar against the
U.S. dollar
- The continued execution of in-store productivity initiatives
and the 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
competitive environment
- No significant changes in the capital budget for Fiscal 2024
for new store openings, maintenance capital expenditures, and
transformational capital expenditures, the latter being mainly
related to information technology projects and which budget
excludes the purchase price for the previously announced property
acquisition
- The successful execution of our business strategy
- The absence of pandemic-related restrictions impacting consumer
shopping patterns or incremental direct costs related to health and
safety measures
- 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
forward-looking statements. This guidance, including the various
underlying assumptions, is forward-looking and should be read in
conjunction with the cautionary statement on forward-looking
statements.
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 Fiscal 2024 and discussed in greater detail in the
"Risks and Uncertainties" section of the Corporation's annual
management's discussion and analysis for Fiscal 2023, both
available on SEDAR at www.sedar.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 7,
2023 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 7, 2023 at 9:00 a.m. (ET). The meeting will be conducted
online only, via live audio webcast. All shareholders of record as
of the close of business on April 13,
2023 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 2024 first quarter results today,
June 7, 2023 at 11:00 a.m.
(ET). Financial analysts are invited to ask questions during
the call. Other interested parties may participate in the call on a
listen-only basis.
Both live audio webcasts are accessible through Dollarama's
website at
https://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 1,507 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 50.1% 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
448 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
30,
2023
|
|
May
1,
2022
|
|
|
|
|
|
|
$
|
|
$
|
Earnings
Data
|
|
|
|
|
|
|
|
|
Sales
|
|
|
|
|
|
1,294,549
|
|
1,072,884
|
Cost of
sales
|
|
|
|
|
|
748,807
|
|
620,992
|
Gross profit
|
|
|
|
|
|
545,742
|
|
451,892
|
SG&A
|
|
|
|
|
|
195,598
|
|
160,625
|
Depreciation and
amortization
|
|
|
|
|
|
85,638
|
|
79,972
|
Share of net earnings
of equity-accounted investment
|
|
|
|
(13,125)
|
|
(8,737)
|
Operating
income
|
|
|
|
|
|
277,631
|
|
220,032
|
Financing
costs
|
|
|
|
|
|
36,685
|
|
24,355
|
Earnings before income
taxes
|
|
|
|
|
|
240,946
|
|
195,677
|
Income taxes
|
|
|
|
|
|
61,073
|
|
50,175
|
Net earnings
|
|
|
|
|
|
179,873
|
|
145,502
|
|
|
|
|
|
|
|
|
|
Basic net earnings per
common share
|
|
|
|
|
|
$0.63
|
|
$0.50
|
Diluted net earnings
per common share
|
|
|
|
|
|
$0.63
|
|
$0.49
|
Weighted average number
of common shares outstanding:
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
284,811
|
|
292,721
|
Diluted
|
|
|
|
|
|
286,179
|
|
294,477
|
|
|
|
|
|
|
|
|
|
Other
Data
|
|
|
|
|
|
|
|
|
Year-over-year sales
growth
|
|
|
|
|
|
20.7 %
|
|
12.4 %
|
Comparable store sales
growth(1)
|
|
|
|
|
|
17.1 %
|
|
7.3 %
|
Gross
margin(1)
|
|
|
|
|
|
42.2 %
|
|
42.1 %
|
SG&A as a % of
sales(1)
|
|
|
|
|
|
15.1 %
|
|
15.0 %
|
EBITDA(1)
|
|
|
|
|
|
366,269
|
|
300,004
|
Operating
margin(1)
|
|
|
|
|
|
21.4 %
|
|
20.5 %
|
Capital
expenditures
|
|
|
|
|
|
47,083
|
|
31,343
|
Number of
stores(2)
|
|
|
|
|
|
1,507
|
|
1,431
|
Average store size
(gross square feet)(2)
|
|
|
|
|
|
10,469
|
|
10,391
|
Declared dividends per
common share
|
|
|
|
|
|
$0.0708
|
|
$0.0553
|
|
|
As at
|
|
|
April
30,
2023
|
|
January 29,
2023
|
|
|
$
|
|
$
|
Statement of
Financial Position Data
|
|
|
|
|
Cash and cash
equivalents
|
|
252,063
|
|
101,261
|
Inventories
|
|
937,687
|
|
957,172
|
Total current
assets
|
|
1,267,979
|
|
1,156,947
|
Property, plant and
equipment
|
|
819,336
|
|
802,750
|
Right-of-use
assets
|
|
1,727,024
|
|
1,699,755
|
Total assets
|
|
4,993,852
|
|
4,819,656
|
Total current
liabilities
|
|
1,123,719
|
|
1,162,874
|
Total non-current
liabilities
|
|
3,651,897
|
|
3,628,372
|
Total
debt(1)
|
|
2,255,414
|
|
2,251,903
|
Net
debt(1)
|
|
2,003,351
|
|
2,150,642
|
Shareholders'
equity
|
|
218,236
|
|
28,410
|
|
|
|
|
|
(1)
|
Refer to the section
below entitled "Non-GAAP and Other Financial Measures" for the
definition of these items and, when applicable, their
reconciliation with the most directly comparable GAAP
measure.
|
(2)
|
At the end of the
period.
|
Non-GAAP and Other Financial Measures
The Corporation prepares its financial information in accordance
with GAAP. We have included non-GAAP and other financial measures
to provide investors with supplemental measures of our operating
and financial performance. We believe that those measures are
important supplemental metrics of operating and financial
performance because they eliminate items that have less bearing on
our operating and financial performance and thus highlight trends
in our core business that may not otherwise be apparent when
relying solely on GAAP measures. We also believe that securities
analysts, investors and other interested parties frequently use
non-GAAP and other financial measures in the evaluation of issuers.
Our management also uses non-GAAP and other financial measures in
order to facilitate operating and financial performance comparisons
from period to period, to prepare annual budgets, and to assess our
ability to meet our 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.
(dollars in
thousands)
|
|
|
|
13-Week Periods
Ended
|
|
|
|
|
|
|
April
30,
2023
|
|
May
1,
2022
|
|
|
|
|
|
|
$
|
|
$
|
A reconciliation of
operating income to EBITDA is included below:
|
|
|
|
|
Operating
income
|
|
|
|
|
|
277,631
|
|
220,032
|
Add: Depreciation and
amortization
|
|
|
|
|
|
88,638
|
|
79,972
|
EBITDA
|
|
|
|
|
|
366,269
|
|
300,004
|
|
|
|
|
|
|
|
|
|
Total debt
Total debt represents the sum of long-term debt (including
accrued interest and fair value hedge – basis adjustment),
short-term borrowings under the US commercial paper program and
other bank indebtedness (if any).
(dollars in
thousands)
|
As at
|
A reconciliation of
long-term debt to total debt is included below:
|
April 30,
2023
|
|
January 29,
2023
|
Senior unsecured 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
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
|
Fixed annual rate of
3.550% payable in equal semi-annual instalments,
maturing
November 6, 2023
|
500,000
|
|
500,000
|
|
|
|
|
Less: Unamortized debt
issue costs, including $1,347 (January 29, 2023 – $1,609) for the
credit facility
|
(8,299)
|
|
(9,107)
|
Accrued interest on
senior unsecured notes
|
18,041
|
|
17,177
|
Fair value hedge –
basis adjustment on interest rate swap
|
(4,328)
|
|
(6,167)
|
Total long-term
debt
|
2,255,414
|
|
2,251,903
|
USCP Notes issued under
US commercial paper program
|
-
|
|
-
|
Total
debt
|
2,255,414
|
|
2,251,903
|
Net debt
Net debt represents total debt minus cash and cash
equivalents.
(dollars in
thousands)
|
|
As at
|
|
|
April 30,
2023
|
|
January 29,
2023
|
|
|
$
|
|
$
|
A reconciliation of
total debt to net debt is included below:
|
|
|
|
|
|
|
|
|
|
Total debt
|
|
2,255,414
|
|
2,251,903
|
Cash and cash
equivalents
|
|
(252,063)
|
|
(101,261)
|
Net
debt
|
|
2,003,351
|
|
2,150,642
|
(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.
(dollars in
thousands)
|
|
As at
|
|
|
April
30,
2023
|
|
January 29,
2023
|
|
|
$
|
|
$
|
A calculation of
adjusted net debt to EBITDA ratio is included below:
|
|
|
|
|
|
|
|
|
|
Net debt
|
|
2,003,351
|
|
2,150,642
|
Lease
liabilities
|
|
1,995,709
|
|
1,960,743
|
Unamortized debt issue
costs
|
|
8,299
|
|
9,107
|
Fair value hedge -
basis adjustment on interest rate swap
|
|
4,328
|
|
6,167
|
Adjusted net
debt
|
|
4,011,687
|
|
4,126,659
|
|
|
|
|
|
EBITDA for the last
twelve-month period
|
|
1,589,558
|
|
1,523,293
|
Adjusted net debt to
EBITDA ratio
|
|
2.52x
|
|
2.71x
|
|
|
|
|
|
EBITDA margin
EBITDA margin represents EBITDA divided by sales.
(dollars in
thousands)
|
|
13-Week Periods
Ended
|
|
|
April
30,
2023
|
|
May
1,
2022
|
|
|
$
|
|
$
|
A reconciliation of
EBITDA to EBITDA margin is included below:
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
366,269
|
|
300,004
|
Sales
|
|
1,294,549
|
|
1,072,884
|
EBITDA
margin
|
|
28.3 %
|
|
28.0 %
|
(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.
|
SG&A as a % of
sales
|
Represents SG&A
divided by sales.
|
Comparable store
sales
|
Represents sales from
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.
|
View original
content:https://www.prnewswire.com/news-releases/dollarama-reports-fiscal-2024-first-quarter-results-301844367.html
SOURCE Dollarama Inc.