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    DOL   CA25675T1075

DOLLARAMA INC.

(DOL)
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Delayed Toronto Stock Exchange  -  05/27 04:00:00 pm EDT
71.41 CAD   +1.84%
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Dollarama well-stocked for holidays but faces supply chain, inflation pressures

12/08/2021 | 03:00pm EDT

Dollarama Inc. says it's well-stocked for the busy holiday shopping period despite facing ongoing supply chain issues, inflationary pressure and a tight labour market across Canada.

"We entered the fourth quarter in a solid inventory position with well-stocked stores ahead of the important holiday season," Dollarama president and CEO Neil Rossy told analysts during a conference call on Wednesday.

"This is despite the various headwinds which continue impacting the retail sector, namely supply chain pressures and cost inflation."

The retailer beat estimates with its third-quarter profit on Wednesday, posting a profit of $183.4 million up from $161.9 million in the same quarter last year. The profit amounted to 61 cents per diluted share, up from 52 cents per diluted share a year earlier.

Rossy said the retailer's financial performance in the quarter ended Oct. 31 represents a "return to a more normalized situation."

"There were fewer restrictions in place, and no restrictions on the sale of goods or on specific retail channels," he told analysts during a conference call.

The reduction in restrictions led to a shift in shopping habits, he said.

Customers shopped more often but bought less at one time — a reversal of the pandemic trend of shoppers stocking up but making fewer trips to the store.

Dollarama said the average transaction size fell 2.8 per cent, but the number of transactions rose 3.7 per cent.

Sales in the quarter totalled $1.12 billion, up from $1.06 billion in the same quarter last year.

Meanwhile, despite ongoing inflation and logistics challenges, Rossy said Dollarama is avoiding price increases — for now.

"There are a number of strategies on the table to address the inflation question," he said. "One of those strategies is adding a new price point. But for the moment, we have nothing to announce on adding a new price point."

The retailer is also facing a challenging labour market across the country, and has ramped up its usual hiring practices to attract workers.

"We've put more effort into our HR initiatives for job fairs and other like-practices to help us garner the attention we need to get the employees we need," he said. "It's a greater challenge than it's been in the past ... it's more difficult, no question about it."

Dollarama chief financial officer J.P. Towner added that from a wage perspective, the company hasn't yet seen any "material increases in wages" as a result of the labour market issues.

This report by The Canadian Press was first published Dec. 8, 2021.

Companies in this story: (TSX:DOL)

© 2021 The Canadian Press. All rights reserved., source Canadian Press DataFile

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Financials
Sales 2023 4 734 M 3 715 M 3 715 M
Net income 2023 759 M 596 M 596 M
Net Debt 2023 1 879 M 1 474 M 1 474 M
P/E ratio 2023 27,1x
Yield 2023 0,32%
Capitalization 20 838 M 16 349 M 16 349 M
EV / Sales 2023 4,80x
EV / Sales 2024 4,43x
Nbr of Employees 14 230
Free-Float 96,1%
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Number of Analysts 13
Last Close Price 71,41 CAD
Average target price 76,77 CAD
Spread / Average Target 7,50%
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Managers and Directors
Neil George Rossy President, Chief Executive Officer & Director
Jean Philippe Towner Chief Financial Officer
Stephen K. Gunn Chairman
Nicolas Hien Chief Information Officer
Johanne Choinière Chief Operating Officer
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