- 4.7% comparable store sales(1) growth
- 14.7% growth in EBITDA(1) to $524.3 million, or 33.5% of sales
- 18.6% increase in diluted net earnings per share to
$1.02
MONTREAL, Sept. 11,
2024 /CNW/ - Dollarama Inc. (TSX: DOL) ("Dollarama"
or the "Corporation") today reported its financial results for the
second quarter ended July 28,
2024.
Fiscal 2025 Second Quarter Highlights Compared to Fiscal 2024
Second Quarter Results
- Sales increased by 7.4% to $1,563.4
million, compared to $1,455.9
million
- Comparable store sales increased by 4.7%, over and above 15.5%
growth in the corresponding period of the previous year
- EBITDA increased by 14.7% to $524.3
million, representing an EBITDA margin(1) of
33.5%, compared to 31.4%
- Operating income increased by 15.3% to $422.9 million, representing an operating
margin(1) of 27.0%, compared to 25.2%
- Diluted net earnings per common share increased by 18.6% to
$1.02, compared to $0.86
- 14 net new stores opened, compared to 18 net new stores
- 2,104,691 common shares repurchased for cancellation for
$263.1 million
"For the second quarter of fiscal 2025, we generated strong
results across the board as comparable store sales continue to
normalize. Canadian consumers continue to recognize and rely on our
compelling value as they deploy their discretionary spending
prudently in a challenging economic environment. Our strong traffic
trends quarter after quarter also confirm that the breadth of our
product offering is allowing us to meet the needs of our
consumers," said Neil Rossy,
President and CEO.
Fiscal 2025 Second Quarter Financial Results
Sales for the second quarter of fiscal 2025 increased by
7.4% to $1,563.4 million,
compared to $1,455.9 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 1,525 stores on July 30, 2023,
to 1,583 stores on July 28, 2024) and increased
comparable store sales.
Comparable store sales for the second quarter of
fiscal 2025 increased by 4.7%, consisting of a 7.0% increase
in the number of transactions and a 2.2% decrease in average
transaction size, over and above comparable store sales growth of
15.5% in the corresponding period of the prior fiscal year. The
increase in comparable store sales reflects sustained customer
demand for consumables offset by softer demand for spring-summer
assortment, compared to the same period last year.
Gross margin(1) reached 45.2% of sales in the second
quarter of fiscal 2025, compared to 43.9% of sales in the
second quarter of fiscal 2024. The increase is mainly due to
the positive impact of lower contractual rates with carriers and
lower logistics costs.
______________________________
|
(1) Refer to
the section entitled "Non-GAAP and Other Financial Measures" of
this press release for the definition of these items and, where
applicable, their reconciliation with the most directly comparable
GAAP measure.
|
General, administrative and store operating expenses
("SG&A") for the second quarter of fiscal 2025 increased
by 7.3% to $212.9 million,
compared to $198.4 million for
the second quarter of fiscal 2024. Despite an increase in
store labour and operating costs, SG&A as a percentage of sales
remained flat at 13.6% for the second quarter of fiscal 2025,
compared to the second quarter of fiscal 2024.
EBITDA totalled $524.3 million, representing an EBITDA
margin of 33.5%, for the second quarter of fiscal 2025,
compared to $457.2 million, or
an EBITDA margin of 31.4% of sales, in the second quarter of
fiscal 2024.
The Corporation's 50.1% share of Dollarcity's net earnings for
the period from April 1, 2024 to June 10, 2024
and its 60.1% share for the period from June 11, 2024 to
June 30, 2024 amounted to
$22.7 million. This compares to
$11.4 million for the Corporation's
50.1% share during the same periods last year. The Corporation's
investment in Dollarcity is accounted for as a joint arrangement
using the equity method.
Net financing costs increased by $4.8 million, from $36.1 million for the second quarter of
fiscal 2024 to $40.9 million for the second quarter of
fiscal 2025. The increase is mainly due to a higher average
borrowing rate on Fixed Rate Notes (as defined herein) and higher
interest expense on lease obligations, partially offset by an
increase in interest income resulting from higher invested
capital.
Net earnings increased by 16.3% to $285.9 million, compared to $245.8 million in the second quarter of
fiscal 2024. Diluted net earnings per common share increased
by 18.6% from $0.86 per diluted
common share to $1.02 per
diluted common share, in the second quarter of
fiscal 2025.
Dollarcity Store Count
During its second quarter ended June 30, 2024,
Dollarcity opened 23 net new stores, compared to
10 net new stores in the same period last year. As at
June 30, 2024, Dollarcity had 570 stores with
338 locations in Colombia,
101 in Guatemala, 74 in
El Salvador and 57 in Peru. This compares to 532 stores as at
December 31, 2023.
Normal Course Issuer Bid
On July 4, 2024, the Corporation announced the renewal
of its normal course issuer bid and the approval from the Toronto
Stock Exchange to repurchase up to 16,549,476 of its common shares,
representing approximately 6.0% of the public float of
275,824,605 common shares as at June 28, 2024,
during the 12‑month period starting on July 7, 2024 and
ending no later than July 6, 2025 (the
"2024-2025 NCIB").
During the second quarter of fiscal 2025, 2,104,691 common
shares were repurchased for cancellation under the 2024-2025 NCIB
and the normal course issuer bid previously in effect, for a total
cash consideration of $263.1 million,
representing a weighted average price of $125.04 per share, excluding the tax on share
repurchases enacted during the second quarter of fiscal 2025.
Dividend
On September 11, 2024, the Corporation announced that
its Board of Directors approved a quarterly cash dividend for
holders of common shares of $0.0920 per common share. This dividend is
payable on November 1, 2024 to shareholders of record at
the close of business on October 4, 2024. The dividend is
designated as an "eligible dividend" for Canadian tax purposes.
Outlook(2)
The Corporation's financial annual guidance ranges for fiscal
2025 issued on April 4, 2024, as well
as the assumptions on which these ranges are based, remain
unchanged:
(as a percentage of
sales except net new store openings in
units and capital expenditures in millions of
dollars)
|
|
Fiscal
2025
|
|
Guidance
|
Net new store
openings
|
|
60 to 70
|
Comparable store
sales
|
|
3.5% to 4.5%
|
Gross margin
|
|
44.0% to
45.0%
|
SG&A
|
|
14.5% to
15.0%
|
Capital
expenditures
|
|
$175.0 to
$200.0
|
These guidance ranges are based on several assumptions,
including the following:
- The number of signed offers to lease and store pipeline for the
remainder of fiscal 2025, the absence of delays outside of our
control on construction activities and no material increases in
occupancy costs in the short- to medium-term
- Approximately three months visibility on open orders and
product margins
- Continued positive customer response to our product offering,
value proposition and in-store merchandising
- The active management of product margins, including through
pricing strategies and product refresh, and of inventory
shrinkage
- The Corporation continuing to account for its investment in
Dollarcity as a joint arrangement using the equity method
- The entering into of foreign exchange forward contracts to
hedge the majority of forecasted merchandise purchases in USD
against fluctuations of CAD against USD
- The continued execution of in-store productivity initiatives
and 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
environment
- No significant changes in the capital budget for fiscal 2025
for new store openings, maintenance and transformational capital
expenditures, the latter mainly related to IT projects
- The absence of unusually adverse weather, especially in peak
seasons around major holidays and celebrations
The guidance ranges included in this section are forward-looking
statements within the meaning of applicable securities laws, are
subject to a number of risks and uncertainties and should be read
in conjunction with the "Forward-Looking Statements" section of
this press release.
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 second quarter of the fiscal year ending
February 2, 2025 and discussed in
greater detail in the "Risks and Uncertainties" section of the
Corporation's annual management's discussion and analysis for the
fiscal year ended January 28, 2024, both available on
SEDAR+ at www.sedarplus.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 September 11, 2024 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. All of the
forward‑looking statements contained in this press release are
expressly qualified by this cautionary statement.
___________________________
|
(2) To be
read in conjunction with the "Forward-Looking Statements" section
of this press release.
|
Second Quarter Results Conference Call
Dollarama will hold a conference call to discuss its fiscal 2025
second quarter results today, September 11, 2024 at
10:30 a.m. (ET) followed by a
question-and-answer period for financial analysts only. Other
interested parties may participate in the call on a listen‑only
basis via live audio webcast accessible through Dollarama's website
at 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 1,583 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 60.1% 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
570 conveniently located stores in El
Salvador, Guatemala,
Colombia and Peru.
www.dollarama.com
Selected Consolidated Financial Information
|
|
13-week periods
ended
|
|
26-week periods
ended
|
(dollars and shares
in thousands, except per share amounts)
|
|
July
28,
2024
|
|
July
30,
2023
|
|
July
28,
2024
|
|
July
30,
2023
|
|
|
$
|
|
$
|
|
$
|
|
$
|
Earnings
Data
|
|
|
|
|
|
|
|
|
Sales
|
|
1,563,384
|
|
1,455,936
|
|
2,969,156
|
|
2,750,485
|
Cost of
sales
|
|
856,189
|
|
817,081
|
|
1,654,685
|
|
1,565,888
|
Gross profit
|
|
707,195
|
|
638,855
|
|
1,314,471
|
|
1,184,597
|
SG&A
|
|
212,946
|
|
198,360
|
|
430,112
|
|
393,958
|
Depreciation and
amortization
|
|
94,091
|
|
85,110
|
|
184,253
|
|
170,748
|
Share of net earnings
of equity-accounted investment
|
|
(22,698)
|
|
(11,371)
|
|
(44,788)
|
|
(24,496)
|
Operating
income
|
|
422,856
|
|
366,756
|
|
744,894
|
|
644,387
|
Net financing
costs
|
|
40,939
|
|
36,068
|
|
77,462
|
|
72,753
|
Earnings before income
taxes
|
|
381,917
|
|
330,688
|
|
667,432
|
|
571,634
|
Income taxes
|
|
95,975
|
|
84,926
|
|
165,647
|
|
145,999
|
Net earnings
|
|
285,942
|
|
245,762
|
|
501,785
|
|
425,635
|
|
|
|
|
|
|
|
|
|
Basic net earnings per
common share
|
|
$1.02
|
|
$0.86
|
|
$1.80
|
|
$1.50
|
Diluted net earnings
per common share
|
|
$1.02
|
|
$0.86
|
|
$1.79
|
|
$1.49
|
|
|
|
|
|
|
|
|
|
Weighted average number
of common shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
280,174
|
|
284,366
|
|
279,440
|
|
284,588
|
Diluted
|
|
281,149
|
|
285,243
|
|
280,427
|
|
285,789
|
|
|
|
|
|
|
|
|
|
Other
Data
|
|
|
|
|
|
|
|
|
Year-over-year sales
growth
|
|
7.4 %
|
|
19.6 %
|
|
8.0 %
|
|
20.1 %
|
Comparable store sales
growth (1)
|
|
4.7 %
|
|
15.5 %
|
|
5.1 %
|
|
16.3 %
|
Gross margin
(1)
|
|
45.2 %
|
|
43.9 %
|
|
44.3 %
|
|
43.1 %
|
SG&A as a % of
sales (1)
|
|
13.6 %
|
|
13.6 %
|
|
14.5 %
|
|
14.3 %
|
EBITDA
(1)
|
|
524,305
|
|
457,193
|
|
942,048
|
|
823,462
|
Operating margin
(1)
|
|
27.0 %
|
|
25.2 %
|
|
25.1 %
|
|
23.4 %
|
Capital
expenditures
|
|
53,952
|
|
41,813
|
|
100,219
|
|
88,896
|
Number of stores
(2)
|
|
1,583
|
|
1,525
|
|
1,583
|
|
1,525
|
Average store size
(gross square feet) (2) (3)
|
|
10,439
|
|
10,420
|
|
10,439
|
|
10,420
|
Declared dividends per
common share
|
|
$0.0920
|
|
$0.0708
|
|
$0.1840
|
|
$0.1416
|
|
|
As at
|
(dollars in
thousands)
|
|
July 28,
2024
|
|
January 28,
2024
|
|
|
$
|
|
$
|
Statement of
Financial Position Data
|
|
|
|
|
Cash and cash
equivalents
|
|
271,460
|
|
313,915
|
Inventories
|
|
884,307
|
|
916,812
|
Total current
assets
|
|
1,230,587
|
|
1,309,093
|
Property, plant and
equipment
|
|
975,873
|
|
950,994
|
Right-of-use
assets
|
|
2,066,650
|
|
1,788,550
|
Total assets
|
|
6,313,986
|
|
5,263,607
|
Total current
liabilities
|
|
618,729
|
|
677,846
|
Total non-current
liabilities
|
|
4,509,818
|
|
4,204,913
|
Total debt
(1)
|
|
2,276,982
|
|
2,264,394
|
Net debt
(1)
|
|
2,005,522
|
|
1,950,479
|
Shareholders'
equity
|
|
1,185,439
|
|
380,848
|
|
|
|
|
|
(1)
|
Refer to the section
entitled "Non-GAAP and Other Financial Measures" of this press
release for the definition of these items and, where applicable,
their reconciliation with the most directly comparable GAAP
measure.
|
(2)
|
At the end of the
period.
|
(3)
|
The Corporation revised
its prior years square footage information to align with its
current and updated methodology.
|
|
|
|
|
|
|
Non-GAAP and Other Financial Measures
The Corporation prepares its financial information in accordance
with GAAP. Management has included non-GAAP and other financial
measures to provide investors with supplemental measures of the
Corporation's operating and financial performance. Management
believes that those measures are important supplemental metrics of
operating and financial performance because they eliminate items
that have less bearing on the Corporation's operating and financial
performance and thus highlight trends in its core business that may
not otherwise be apparent when relying solely on GAAP measures.
Management also believes that securities analysts, investors and
other interested parties frequently use non-GAAP and other
financial measures in the evaluation of issuers. Management also
uses non-GAAP and other financial measures to facilitate operating
and financial performance comparisons from period to period, to
prepare annual budgets and to assess their ability to meet the
Corporation's 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. Management believes EBITDA
represents a supplementary metric to assess profitability and
measure the Corporation's underlying ability to generate liquidity
through operating cash flows.
|
|
13-week periods
ended
|
|
26-week periods
ended
|
(dollars in
thousands)
|
|
July
28,
2024
|
|
July
30,
2023
|
|
July
28,
2024
|
|
July
30,
2023
|
|
|
$
|
|
$
|
|
$
|
|
$
|
A reconciliation of
operating income to EBITDA is included below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
422,856
|
|
366,756
|
|
744,894
|
|
644,387
|
Add: Depreciation and
amortization
|
|
101,449
|
|
90,437
|
|
197,154
|
|
179,075
|
EBITDA
|
|
524,305
|
|
457,193
|
|
942,048
|
|
823,462
|
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,
long-term financing arrangements and other bank indebtedness (if
any). Management believes Total debt represents a measure to
facilitate the understanding of the Corporation's corporate
financial position in relation to its financing obligations.
(dollars in
thousands)
|
As at
|
A reconciliation of
long-term debt to total debt is included below:
|
July 28,
2024
|
|
January 28,
2024
|
|
Senior unsecured notes
(the "Fixed Rate 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
5.533% payable in equal semi-annual instalments,
maturing September 26,
2028
|
500,000
|
|
500,000
|
|
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
|
|
|
|
|
|
|
Unamortized debt issue
costs, including $1,513 (January 28, 2024 – $1,320) for the credit
facility
|
(8,341)
|
|
(9,049)
|
|
Accrued interest on the
Fixed Rate Notes
|
21,625
|
|
21,460
|
|
Long-term financing
arrangement
|
7,045
|
|
-
|
|
Fair value hedge –
basis adjustment on interest rate swap
|
6,653
|
|
1,983
|
|
Total
debt
|
2,276,982
|
|
2,264,394
|
|
Net debt
Net debt represents total debt minus cash and cash equivalents.
Management believes Net debt represents a measure to assess the
financial position of the Corporation including all financing
obligations, net of cash and cash equivalents.
(dollars in
thousands)
|
|
As at
|
|
|
July 28,
2024
|
|
January 28,
2024
|
|
|
$
|
|
$
|
A reconciliation of
total debt to net debt is included below:
|
|
|
|
|
|
|
|
|
|
Total debt
|
|
2,276,982
|
|
2,264,394
|
Cash and cash
equivalents
|
|
(271,460)
|
|
(313,915)
|
Net
debt
|
|
2,005,522
|
|
1,950,479
|
(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. Management uses this ratio to partially assess the
financial condition of the Corporation. An increasing ratio would
indicate that the Corporation is utilizing more debt per dollar of
EBITDA generated.
(dollars in
thousands)
|
|
As at
|
|
|
July 28,
2024
|
|
January 28,
2024
|
|
|
$
|
|
$
|
A calculation of
adjusted net debt to EBITDA ratio is included below:
|
|
|
|
|
|
|
|
|
|
Net debt
|
|
2,005,522
|
|
1,950,479
|
Lease
liabilities
|
|
2,360,970
|
|
2,069,229
|
Unamortized debt issue
costs, including $1,513 (January 28, 2024 - $1,320) for the credit
facility
|
|
8,341
|
|
9,049
|
Fair value hedge -
basis adjustment on interest rate swap
|
|
(6,653)
|
|
(1,983)
|
Adjusted net
debt
|
|
4,368,180
|
|
4,026,774
|
|
|
|
|
|
EBITDA for the last
twelve-month period
|
|
1,979,752
|
|
1,861,166
|
Adjusted net debt to
EBITDA ratio
|
|
2.21x
|
|
2.16x
|
EBITDA margin
EBITDA margin represents EBITDA divided by sales. Management
believes that EBITDA margin is useful in assessing the performance
of ongoing operations and efficiency of operations relative to its
sales.
|
|
13-week periods
ended
|
|
26-week periods
ended
|
(dollars in
thousands)
|
|
July
28,
2024
|
|
July
30,
2023
|
|
July
28,
2024
|
|
July
30,
2023
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
A reconciliation
of EBITDA to EBITDA margin
is included below:
|
EBITDA
|
|
524,305
|
|
457,193
|
|
942,048
|
|
823,462
|
Sales
|
|
1,563,384
|
|
1,455,936
|
|
2,969,156
|
|
2,750,485
|
EBITDA
margin
|
|
33.5 %
|
|
31.4 %
|
|
31.7 %
|
|
29.9 %
|
(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, expressed as a percentage of
sales.
|
SG&A as a % of
sales
|
Represents SG&A
divided by sales.
|
Comparable store
sales
|
Represents sales of
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-2025-second-quarter-results-302244562.html
SOURCE Dollarama Inc.