Dollarama Bucks Retail Trends With Plan to Open 1,700 StoresBy
Canadian dollar-store chain also tops fourth-quarter estimates
Domestic market is less saturated with dollar stores than U.S.
As retailers across North America shutter hundreds of stores, one chain is doing the opposite.
The long-term goal comes after the company topped estimates for the fourth quarter. Dollarama posted profit of C$1.24 a share in the period, which ended Jan. 29. Analysts analysts had projected C$1.12 on average.
Dollarama is capitalizing on a domestic market that’s less saturated with dollar stores than the neighboring U.S. The company also is introducing more products priced at C$3.50 ($2.60) and C$4, investing in technology to boost productivity and will start accepting credit cards at all stores in the second quarter.
The store expansion and earnings beat lifted shares to C$107.23 in Toronto trading, their highest-ever intraday price. The stock had increased 1.4 percent to C$99.74 this year through Wednesday.
Sales rose almost 12 percent to C$854.5 million last quarter, beating the average C$842.1 million. Same-store sales, a measure closely watched by analysts, rose 5.8 percent.
The company netted 26 new locations last quarter, and the new store target “provides Dollarama with several years of additional footprint growth,” Chief Executive Officer Neil Rossy said.
Dollarama also increased its quarterly dividend by 10 percent to 11 Canadian cents a share.