In This Article:
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EPS: $0.98, a 6.5% increase over the same quarter last year.
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Comparable Store Sales Growth: 3.3%.
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Revenue: Over $1.5 billion, a 5.7% increase over Q3 of fiscal 2024.
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Gross Margin: 44.7%, down from 45.4% in Q3 of last year.
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SG&A: 14.3% of sales, down from 14.5% in Q3 of fiscal 2024.
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EBITDA: $509.7 million, compared to $478.8 million last year.
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Net Earnings Contribution from Dollar City: $27.1 million, up from $18 million last year.
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Store Count: 1,600 stores in Canada, with plans to reach 2,200 by 2034.
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New Stores Opened: 50 net new stores, aiming for 60 to 70 by fiscal year-end.
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Share Repurchase: Nearly 1.4 million common shares repurchased for $186.2 million.
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Dividend: Quarterly cash dividend of $0.092 per share.
Release Date: December 04, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Dollarama Inc (DLMAF) reported a 6.5% increase in EPS to $0.98, indicating strong financial performance.
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Comparable store sales increased by 3.3%, reflecting continued consumer interest in Dollarama's value proposition.
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The company announced an ambitious plan to expand to 2,200 stores in Canada by 2034, up from the previous target of 2,000 by 2031.
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Dollarama Inc (DLMAF) is optimizing its logistics operations with a new two-node system, enhancing service and resilience across Canada.
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Dollar City, a subsidiary, continues to grow with 18 new stores opened in the third quarter, expanding its presence in Latin America.
Negative Points
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Gross margin decreased to 44.7% from 45.4% due to stronger sales of consumables and higher logistics costs.
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The company faces challenges with cautious consumer spending, impacting discretionary sales.
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There is a potential for increased costs due to tariffs and a weaker Canadian dollar, which may pressure margins.
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Dollarama Inc (DLMAF) is investing heavily in a new logistics hub, with a projected CapEx of $450 million, which could strain resources.
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The expansion into Mexico by Dollar City may require significant capital, potentially impacting cash flow.
Q & A Highlights
Q: Can you provide insights into consumer spending trends, particularly around Halloween and early Christmas demand? A: Neil Rossy, President and CEO, noted that while it's too early to comment on Christmas, Halloween performed satisfactorily despite conservative consumer spending. The focus remains on everyday essentials, reflecting a cautious approach due to economic concerns.
Q: Regarding the new distribution center in Calgary, what was the thought process behind its design and location? A: Neil Rossy explained that the decision was based on market diligence, opting for a setup similar to Montreal's operations for efficiency and flexibility. Future automation tests will occur in Montreal before potential implementation in Calgary.