- 32.4% increase in diluted net earnings per share to
$0.49
- 20.9% increase in EBITDA(1) to $300.0 million
- Sales growth of 12.4% and comparable store sales(1)
growth of 7.3%
- Publication of Climate Strategy and 2022 ESG Update, including
first-generation intensity reduction target for Scope 1 and Scope 2
GHG emissions
MONTREAL, June 8, 2022
/CNW/ - Dollarama Inc. (TSX: DOL) ("Dollarama" or the
"Corporation") today reported its financial results for the first
quarter ended May 1, 2022.
Fiscal 2023 First Quarter Results
Highlights Compared to Fiscal 2022 First Quarter Results
- Sales increased by 12.4% to $1,072.9
million
- Comparable store sales(1) grew 7.3%
- EBITDA(1) increased by 20.9% to $300.0 million, or 28.0% of sales, compared to
26.0% of sales
- Operating income increased by 24.4% to $220.0 million, or 20.5% of sales, compared to
18.5% of sales
- Diluted net earnings per share increased by 32.4% to
$0.49, compared to $0.37
- 10 net new stores opened, compared to 12 net new stores
- 1,444,803 common shares repurchased for cancellation for
$107.3 million
"With the lifting of COVID-19 restrictions across Canada early in the quarter, we were pleased
to see a double-digit increase in customer traffic, coupled with
strong demand for our affordable, everyday consumables and seasonal
goods. Our strong performance across key metrics in the first
quarter reflects the relevance of our business model and positive
consumer response to our value proposition in a high-inflation
environment," said Neil Rossy,
President and CEO. "Mindful of the challenging environment in which
we are operating, we will continue to rely on the levers at our
disposal to mitigate ongoing supply chain and cost pressures, while
providing consumers with the best relative value on the market," he
added.
"I am also pleased with our continued progress over the last
year on the ESG front, including the publication of our climate
strategy and roadmap. We approach our sustainability commitments as
a journey on which we must continuously set the bar higher. We also
believe in setting measurable and achievable goals, that consider
our business and operations, the unique role we play in the lives
of Canadian consumers, and the expectations of our stakeholders,"
concluded Mr. Rossy.
Explanatory Notes
All comparative figures that follow are for the first quarter
ended May 1, 2022, compared to the
first quarter ended May 2, 2021. All
financial information presented in this press release has been
prepared in accordance with generally accepted accounting
principles in Canada ("GAAP") as
set out in the CPA Canada Handbook – Accounting under Part I, which
incorporates International Financial Reporting Standards ("IFRS")
as issued by the International Accounting Standards Board ("IASB").
For a full explanation of the Corporation's use of non-GAAP and
other financial measures, please refer to the section entitled
"Selected Consolidated Financial Information" of this press
release, under the heading "Non-GAAP and Other Financial Measures".
All references to "Fiscal 2022" are to the Corporation's
fiscal year ended January 30, 2022,
and to "Fiscal 2023" are to the Corporation's fiscal year
ending January 29, 2023.
|
|
(1)
|
We refer the reader to
the notes in the section entitled "Selected Consolidated Financial
Information" of this press release for the definition of these
items and, when applicable, their reconciliation with the most
directly comparable GAAP measure.
|
Fiscal 2023 First Quarter
Financial Results
Sales for the first quarter of Fiscal 2023 increased by 12.4% to
$1,072.9 million, compared to
$954.2 million for the first
quarter of Fiscal 2022. This increase was driven by growth in the
total number of stores over the past 12 months (from 1,368 stores
on May 2, 2021, to 1,431 stores on
May 1, 2022) and in comparable store
sales.
Comparable store sales for the first quarter of Fiscal 2023
increased by 7.3%, over and above 5.8% growth in the first quarter
of Fiscal 2022 and consisted of a 14.4% increase in the number
of transactions and a 6.2% decrease in average transaction size,
reflecting a reversal in consumer shopping patterns compared to the
prior year comparable period. The increase in comparable store
sales is attributable to good seasonal performance and higher sales
of consumables resulting in increased customer traffic across the
store network year over year, whereas the same quarter last year
was marked by a ban, effective April 8, 2021 and lifted after
quarter-end on June 11, 2021, on the sale of non-essential
goods in Ontario, where
approximately 40% of the Corporation's stores are
located.
EBITDA totalled $300.0 million, or
28.0% of sales, for the first quarter of Fiscal 2023, compared to
$248.2 million, or 26.0% of
sales, in the first quarter of Fiscal 2022. The increase in EBITDA
reflects a solid gross margin and strong SG&A performance.
Gross margin was 42.1% of sales in the first quarter of Fiscal
2023, compared to 42.3% of sales in the first quarter of Fiscal
2022. Gross margin was slightly lower this quarter due to a change
in the sales mix, with stronger sales of consumables, partially
offset by lower logistic costs.
General, administrative and store operating expenses
("SG&A") for the first quarter of Fiscal 2023 increased by only
1.2% to $160.6 million, compared
to $158.7 million for the first
quarter of Fiscal 2022. SG&A represented 15.0% of sales,
compared to 16.6% of sales for the first quarter of Fiscal 2022.
This improvement is primarily attributed to the fact that
incremental direct costs related to COVID-19 measures for the first
quarter of Fiscal 2023 were only $1.6
million, representing a 15 basis-point impact, compared to
$18.3 million, representing a 190
basis-point impact, in the same period last year.
The Corporation's 50.1% share of Dollarcity's net earnings for
the period from January 1, 2022, to
March 31, 2022, was $8.7
million, compared to $3.4
million for the same period last year, reflecting a strong
financial and operational performance by Dollarcity. The
Corporation's investment in Dollarcity is accounted for as a joint
arrangement using the equity method.
Financing costs increased by $2.3
million, from $22.1 million
for the first quarter of Fiscal 2022 to $24.4 million for the first quarter of
Fiscal 2023, mainly due to slightly higher average
borrowings.
Net earnings were $145.5 million,
or $0.49 per diluted common share, in
the first quarter of Fiscal 2023, compared to $113.6 million, or $0.37 per diluted common share, in the first
quarter of Fiscal 2022. Net earnings improved due to higher
sales, and a higher equity pick-up from Dollarcity's net earnings,
partially offset by a slightly lower gross margin.
Dollarcity Update
During its first quarter ended March 31,
2022, Dollarcity opened 8 net new stores, compared to 15 net
new stores in the same period last year. As at March 31, 2022, Dollarcity had a total of 358
stores, with 210 locations in Colombia, 78 in Guatemala, 60 in El Salvador and 10 in
Peru. This compares to a total of
350 stores as at December 31,
2021.
Normal Course Issuer Bid
During the first quarter of Fiscal 2023, 1,444,803 common
shares were repurchased for cancellation under the Corporation's
normal course issuer bid, for a total cash consideration of
$107.3 million, at a weighted average
price of $74.29 per share. As at
May 1, 2022, the Corporation's adjusted net debt to EBITDA
ratio was 2.74 times.
Dividend
On June 8, 2022, the Corporation
announced that its Board of Directors had approved a quarterly cash
dividend for holders of common shares of $0.0553 per common share. This dividend is
payable on August 5, 2022 to shareholders of record at the
close of business on July 8, 2022.
The dividend is designated as an "eligible dividend" for Canadian
tax purposes.
Publication of Climate Strategy
and 2022 ESG Update
As part of its sustainability commitments, Dollarama today
published its Climate Strategy and 2022 ESG Update. This latest
report includes Dollarama's first Scope 1 and Scope 2 emissions
intensity reduction target of 25% by 2030 from a 2019 baseline, on
a square footage basis. Dollarama also reiterated its commitment to
pursue further alignment with the recommendations of the Task Force
on Climate-related Financial Disclosures (TCFD).
In addition, Dollarama provides annual progress updates and
additional information across select material topics ranging from
diversity and inclusion to responsible sourcing. It also published
an updated annual Sustainability Accounting Standards Board (SASB)
Index.
Intended for all stakeholders and to be read in conjunction with
regulatory filings, Dollarama's Climate Strategy and 2022 ESG
Update is available for download in the Sustainability section of
its corporate website.
Forward-Looking
Information
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 first
quarter of Fiscal 2023 and discussed in greater detail in the
"Risks and Uncertainties" section of the Corporation's annual
management's discussion and analysis for Fiscal 2022, both
available on SEDAR at www.sedar.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 June 8,
2022 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. The forward-looking statements contained
in this press release are expressly qualified by this cautionary
statement.
Virtual Shareholder Meeting and
First Quarter Results Conference Call
Dollarama will hold its annual general meeting of shareholders
today, June 8, 2022 at 9:00 a.m. (ET). The meeting will be conducted
online only, via live audio webcast. All shareholders of record as
of the close of business on April 14,
2022, regardless of geographic location, will be able to
listen to the live audio webcast and submit questions. However,
only registered shareholders and duly appointed proxyholders
(including non-registered shareholders who have duly appointed
themselves as proxyholder) will be able to vote at the meeting.
Dollarama will also hold a conference call to discuss its
Fiscal 2023 first quarter results today,
June 8, 2022 at 11:00 a.m.
(ET). Financial analysts are invited to ask questions during
the call. Other interested parties may participate in the call on a
listen-only basis.
Both live audio webcasts are accessible through Dollarama's
website at
https://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 1,431 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 50.1% 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
358 conveniently located stores in El Salvador, Guatemala, Colombia and Peru.
Selected Consolidated Financial
Information
|
|
|
|
13-Week Periods
Ended
|
(dollars and shares
in thousands, except per share amounts)
|
|
|
|
|
|
May 1,
2022
|
|
May 2,
2021
|
|
$
|
|
$
|
|
|
|
|
|
|
|
|
|
Earnings
Data
|
|
|
|
|
|
|
|
|
Sales
|
|
|
|
|
|
1,072,884
|
|
954,246
|
Cost of
sales
|
|
|
|
|
|
620,992
|
|
550,806
|
Gross profit
|
|
|
|
|
|
451,892
|
|
403,440
|
SG&A
|
|
|
|
|
|
160,625
|
|
158,672
|
Depreciation and
amortization
|
|
|
|
|
|
79,972
|
|
71,402
|
Share of net earnings
of equity-accounted investment
|
|
|
|
(8,737)
|
|
(3,403)
|
Operating
income
|
|
|
|
|
|
220,032
|
|
176,769
|
Financing
costs
|
|
|
|
|
|
24,355
|
|
22,146
|
Earnings before income
taxes
|
|
|
|
|
|
195,677
|
|
154,623
|
Income taxes
|
|
|
|
|
|
50,175
|
|
41,049
|
Net earnings
|
|
|
|
|
|
145,502
|
|
113,574
|
|
|
|
|
|
|
|
|
|
Basic net earnings per
common share
|
|
|
|
|
|
$0.50
|
|
$0.37
|
Diluted net earnings
per common share
|
|
|
|
|
|
$0.49
|
|
$0.37
|
Weighted average number
of common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
292,721
|
|
309,400
|
|
Diluted
|
|
|
|
|
|
294,477
|
|
310,742
|
|
|
|
|
|
|
|
|
|
Other
Data
|
|
|
|
|
|
|
|
|
Year-over-year sales
growth
|
|
|
|
|
|
12.4%
|
|
13.0%
|
Comparable store sales
growth (1)
|
|
|
|
|
|
7.3%
|
|
5.8%
|
Gross margin
(1)
|
|
|
|
|
|
42.1%
|
|
42.3%
|
SG&A as a % of
sales (1)
|
|
|
|
|
|
15.0%
|
|
16.6%
|
EBITDA
(1)
|
|
|
|
|
|
300,004
|
|
248,171
|
Operating margin
(1)
|
|
|
|
|
|
20.5%
|
|
18.5%
|
Capital
expenditures
|
|
|
|
|
|
31,343
|
|
30,370
|
Number of stores
(2)
|
|
|
|
|
|
1,431
|
|
1,368
|
Average store size
(gross square feet) (2)
|
|
|
|
|
|
10,391
|
|
10,336
|
Declared dividends per
common share
|
|
|
|
|
|
$0.0553
|
|
$0.0503
|
|
|
As at
|
|
|
May
1,
2022
|
|
January 30,
2022
|
|
|
$
|
|
$
|
Statement of
Financial Position Data
|
|
|
|
|
Cash
|
|
71,574
|
|
71,058
|
Inventories
|
|
646,713
|
|
590,927
|
Total current
assets
|
|
786,760
|
|
717,367
|
Property, plant and
equipment
|
|
766,175
|
|
761,876
|
Right-of-use
assets
|
|
1,523,226
|
|
1,480,255
|
Total assets
|
|
4,194,279
|
|
4,063,562
|
Total current
liabilities
|
|
978,900
|
|
911,891
|
Total non-current
liabilities
|
|
3,232,508
|
|
3,217,705
|
Total debt
(1)
|
|
1,947,418
|
|
1,894,309
|
Net debt
(1)
|
|
1,875,844
|
|
1,823,251
|
Shareholders'
deficit
|
|
(17,129)
|
|
(66,034)
|
|
|
|
|
|
(1)
|
Refer to the section
below entitled "Non-GAAP and Other Financial Measures" for the
definition of these items and, when applicable, their
reconciliation with the most directly comparable GAAP
measure.
|
(2)
|
At the end of the
period.
|
Non-GAAP and Other Financial
Measures
The Corporation prepares its financial information in accordance
with GAAP. We have included non-GAAP and other financial measures
to provide investors with supplemental measures of our operating
and financial performance. We believe that those measures are
important supplemental metrics of operating and financial
performance because they eliminate items that have less bearing on
our operating and financial performance and thus highlight trends
in our core business that may not otherwise be apparent when
relying solely on GAAP measures. We also believe that securities
analysts, investors and other interested parties frequently use
non-GAAP and other financial measures in the evaluation of issuers.
Our management also uses non-GAAP and other financial measures in
order to facilitate operating and financial performance comparisons
from period to period, to prepare annual budgets, and to assess our
ability to meet our 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.
(dollars in
thousands)
|
|
|
|
13-Week Periods
Ended
|
|
|
|
|
|
|
May
1,
2022
|
|
May
2,
2021
|
|
|
|
|
|
|
$
|
|
$
|
A reconciliation of
operating income to EBITDA is included below:
|
|
|
|
|
Operating
income
|
|
|
|
|
|
220,032
|
|
176,769
|
Add: Depreciation and
amortization
|
|
|
|
|
|
79,972
|
|
71,402
|
EBITDA
|
|
|
|
|
|
300,004
|
|
248,171
|
|
|
|
|
|
|
|
|
|
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 and
other bank indebtedness (if any).
(dollars in
thousands)
|
|
As at
|
A reconciliation of
long-term debt to total debt is included below:
|
|
May
1,
2022
|
|
January 30,
2022
|
|
Senior unsecured notes
bearing interest at:
|
|
$
|
|
$
|
|
|
Fixed annual rate
of 2.443% payable in equal semi-annual instalments, maturing July
9, 2029
|
|
375,000
|
|
375,000
|
|
|
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 3.55% payable in equal semi-annual instalments, maturing
November 6, 2023
|
|
500,000
|
|
500,000
|
|
|
Fixed annual rate
of 2.203% payable in equal semi-annual instalments, maturing
November 10, 2022
|
|
250,000
|
|
250,000
|
|
|
|
|
|
|
|
Accrued interest on
Fixed Rate Notes
|
|
16,506
|
|
7,850
|
|
Fair value hedge -
basis adjustment on interest rate swap
|
|
(6,475)
|
|
(2,927)
|
|
Total long-term
debt
|
|
1,810,031
|
|
1,804,923
|
|
USCP Notes issued under
US commercial paper program
|
|
137,387
|
|
89,386
|
|
Total
debt
|
|
1,947,418
|
|
1,894,309
|
|
Net debt
Net debt represents total debt minus cash.
(dollars in
thousands)
|
|
As at
|
|
|
May 1,
2022
|
|
January 30,
2022
|
|
|
$
|
|
$
|
A reconciliation of
total debt to net debt is included below:
|
|
|
|
|
|
|
|
|
|
Total debt
|
|
1,947,418
|
|
1,894,309
|
Cash
|
|
(71,574)
|
|
(71,058)
|
Net
debt
|
|
1,875,844
|
|
1,823,251
|
(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.
(dollars in
thousands)
|
|
As at
|
|
|
May 1,
2022
|
|
January 30,
2022
|
|
|
$
|
|
$
|
A calculation of
adjusted net debt to EBITDA ratio is included below:
|
|
|
|
|
|
|
|
|
|
Net debt
|
|
1,875,844
|
|
1,823,251
|
Lease
liabilities
|
|
1,771,448
|
|
1,727,428
|
Fair value hedge -
basis adjustment on interest rate swap
|
|
6,475
|
|
2,927
|
Adjusted net
debt
|
|
3,653,767
|
|
3,553,606
|
|
|
|
|
|
EBITDA for the last
twelve-month period
|
|
1,334,410
|
|
1,282,577
|
Adjusted net debt to
EBITDA ratio
|
|
2.74x
|
|
2.77x
|
|
|
|
|
|
EBITDA margin
EBITDA margin represents EBITDA divided by sales.
(dollars in
thousands)
|
|
13-Week Periods
Ended
|
|
|
May
1,
2022
|
|
May
2,
2021
|
|
|
$
|
|
$
|
A reconciliation of
EBITDA to EBITDA margin is included below:
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
300,004
|
|
248,171
|
Sales
|
|
1,072,884
|
|
954,246
|
EBITDA
margin
|
|
28.0%
|
|
26.0%
|
(C) Supplementary Financial
Measures
Gross
margin
|
Represents gross profit
divided by sales.
|
Operating
margin
|
Represents operating
income divided by sales.
|
SG&A as a % of
sales
|
Represents SG&A
divided by sales.
|
Comparable store
sales
|
Represent 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. For the
first quarter of Fiscal 2022, the calculation of comparable store
sales growth excludes stores that were temporarily closed, either
in Fiscal 2022 or in the same period in the prior fiscal year,
in the context of the COVID-19 pandemic.
|
Incremental direct
costs related to COVID-19
|
Represents costs
incurred for the implementation and execution of health and safety
measures in stores and in logistic operations in response to the
pandemic, including costs associated with additional labor hours
for the execution of sanitization and crowd control protocols and
with the procurement of personal protection equipment for employees
and cleaning supplies and equipment.
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content:https://www.prnewswire.com/news-releases/dollarama-reports-fiscal-2023-first-quarter-results-301563558.html
SOURCE Dollarama Inc.