Dollarama sales rise 10% as discount retailer expands to Australia, Mexico
Dollarama Continues to See Growth in Second Quarter with Expansion into New Markets
Dollarama Inc. has reported a strong second quarter with increased sales and earnings, driven by its expansion into two new international markets. The company’s sales rose by 10.3 per cent to $1.72 billion in the quarter ended Aug. 3, fueled by same store sales growth in Canada and additional revenue from its expanding number of stores.
One of the key highlights of the quarter was Dollarama’s entry into the Asian-Pacific market through its acquisition of The Reject Shop Ltd., the largest discount retailer in Australia. This move added 395 stores to Dollarama’s network and marked a significant milestone in the company’s international expansion strategy. Additionally, Dollarama opened its first Dollarcity store in Mexico, further solidifying its presence in Latin America.
Neil Rossy, the company’s chief executive, expressed excitement about the progress made in deploying the Dollarama business model in Australian stores and the phasing-in of select company merchandise. Once stores reach a critical mass of Dollarama products, they will be rebranded under the Dollarama banner.
In Canada, Dollarama saw a 4.9 per cent increase in comparable store sales, with a rise in the number of transactions by 3.9 per cent. The company opened 27 new stores in Canada during the quarter, further expanding its reach in the country. Strong demand for consumables continued to be a key driver of sales, with general and seasonal merchandise remaining stable.
While the company remains optimistic about its growth prospects, Chief Financial Officer Patrick Bui noted that Canadian consumers are still cautious about discretionary spending due to economic uncertainty. This cautious behavior may impact same-store sales in the second half of the year, traditionally a period of strong seasonal sales.
Despite the potential headwinds, Dollarama reported a 12.4 per cent increase in net earnings to $321.5 million, resulting in a 13.7 per cent growth in diluted net earnings per common share. Earnings before interest, taxes, depreciation, and amortization (EBITDA) were up by 12.2 per cent to $588.5 million, with an EBITDA margin of 34.1 per cent. Operating income also saw a significant increase of 14.3 per cent to $483.5 million.
Bui emphasized that Dollarama’s international expansion strategy is creating value for shareholders while keeping a close eye on the evolving macroeconomic environment and consumer behaviors. The company’s strong performance in the second quarter positions it well for continued growth and success in the future.
For more information, visit the Dollarama website or contact the company directly via email.
