logo-loader

Dollarama Q2 profits fall, but sales hit record highs

Published: 20:45 14 Sep 2010 BST

no_picture_pai

Canadian savings haven Dollarama (TSX: DOL) has reported a 23% dip in its second quarter profits due to high expenses and foreign exchange impacts, but saw a 13% increase in its sales, fueled by the addition of 38 new stores since August 2009.

For the second quarter ending August 1 2010, profits were C$20.98 million, or $0.28 per share on a diluted basis, versus income of C$26.58 million, or $0.61 per share.

Excluding one-time items, net earnings increased slightly by $0.4 million to $27.7 million from the same period last year.

Operating profit improved to $47.1 million from $35.2 million a year earlier.

Sales also hit a record high this quarter. Revenues were $343.5 million versus the the second quarter of 2009, driven by new stores and comparable store sales growth of 7.8%.

This was achieved by a 1.4% increase in the number of transactions and a 6.2% rise in average transaction size.

Gross margin also improved to 35.3% of sales from 33.2% of sales last year, due mainly to refining the company`s multi-price point strategy.

"We sustained healthy growth through the opening of new stores and increased comparable store sales. We also remain committed to tightly managing our operating and office expenses and generating value for our shareholders," said CEO Larry Rossy.

General administrative and store-operating expenses grew 13% during the quarter.

In June, the company secured a new loan consisting of a $75 million revolving credit facility, and a $525 million term loan, due to mature in June 2014.

Dollarama, founded in 1992, is Canada`s largest dollar store operator with 623 locations across the country.

FTSE rises ahead of Easter weekend, JD Sport gains on upbeat outlook -...

The FTSE 100 gained on the final morning of this shortened Easter trading week. Festive cheer was limited though, as Thames Water confirmed shareholders would not provide it with a £500 million rescue package, prompting speculation over the London supplier’s future. On a more positive...

1 hour, 9 minutes ago