#Canada #Q3 Results #Montreal #Fiscal 2025 #Dollarama

Dollarama Reports Fiscal 2025 Third Quarter Results

Dollarama Inc. announced its financial results for the third quarter ending October 27, 2024, showcasing a robust 5.7% increase in sales, totaling approximately $1.563 billion, an increase from the $1.478 billion reported in the same period last year. Remarkably, comparable store sales grew by 3.3%, building on an impressive 11.1% surge in the previous year.

Key Financial Highlights

During this quarter, Dollarama's Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) reached $509.7 million, which resulted in an EBITDA margin of 32.6%. This reflects a slight increase from 32.4% in the prior year. Operating income also saw a positive trend, increasing by 5.4% to $407.5 million, alongside a diluted net earnings per share of $0.98, up from $0.92 in the third quarter of fiscal 2024.

Moreover, Dollarama opened 18 new stores during this quarter, compared to 16 in the previous year, bringing its total count to 1,601 stores across Canada. This expansion reflects the company’s commitment to growth and its robust operational strategy.

Long-Term Store Target Expansion

In light of favorable consumer responses and a strategic reevaluation of its market potential, Dollarama's management has adjusted its long-term growth target. The company aims to increase its store footprint in Canada from a prior target of 2,000 stores by 2031 to 2,200 stores by 2034, demonstrating confidence in its business model and customer value proposition.

Logistics Hub Development

Another significant development is Dollarama's agreement to acquire land in Calgary, Alberta, intended for a new logistics hub that is set to further optimize the company's distribution operations in Western Canada. The planned logistics center, with an expected commissioning date in late 2027, aims to enhance efficiencies and support ongoing expansion.

Total capital expenditures for the construction are projected to reach approximately $450 million over three years, primarily funded from cash flows generated through operations. This investment illustrates Dollarama's proactive approach to enhancing its logistics capabilities to match anticipated growth.

Insight from Leadership

Neil Rossy, President and CEO of Dollarama, expressed optimism regarding the company's third-quarter performance, highlighting the steady same-store sales growth despite prevailing cautious consumer spending patterns. He emphasized the importance of adapting to market conditions while ensuring the company continues to deliver on its value proposition.

Investment and Shareholder Returns

In a move to bolster shareholder confidence, Dollarama has implemented a share repurchase program, having repurchased 1,360,635 shares for $186.2 million during the quarter. Furthermore, the Board of Directors declared a quarterly cash dividend of $0.0920 per common share, payable to shareholders in early 2025, reaffirming the corporation’s commitment to returning value to its shareholders.

As we look forward, Dollarama remains focused on executing its strategies to enhance growth, customer engagement, and operational efficiencies. The company’s guidance for fiscal 2025 remains unchanged, with expectations of 60 to 70 net new store openings and a moderate growth forecast for comparable store sales.

In summary, Dollarama continues to demonstrate resilience and adaptability, as it navigates the evolving retail landscape while firmly positioning itself for future growth through strategic expansion and operational enhancements.