Discount retailer Dollarama to set up 60 stores in 2012

12 April 2012 (Last Updated April 12th, 2012 07:00)

Canada-based discount stores operator Dollarama intends add up to 60 new stores this year, primarily in Ontario and Western Canada, after opening 52 new stores last year.

Dollarama

Canada-based discount stores operator Dollarama intends add up to 60 new stores this year, primarily in Ontario and Western Canada, after opening 52 new stores last year.

The company has reported a 14.7% increase in fourth quarter sales to $468.7m, compared to $408.7m in prior year quarter, mainly driven by store openings.

The increase in sales was also driven by comparable store sales growth of 7.9% in the quarter ended 29 January 2012.

Comparable store sales growth for the fourth quarter consisted of a 3.8% increase in average transaction size combined with a 4% rise in the number of transactions.

Earnings before interest, taxes, depreciation and amortization (EBITDA) surged 33.1% to $100.1m or 21.4% of sales in the quarter ended January.

General, administrative and store operating expenses (SG&A) decreased to 18.4% of sales in the fourth quarter, compared to 19.8% of sales in the corresponding period a year ago.

Net earnings increased to $63.6m in the quarter ended January 2012, compared to $42m in the corresponding period last year.

During the quarter, the company opened 14 net new stores.

In full fiscal 2012, sales increased 12.9% to $1,602.8m, compared to $1,419.9m in the fiscal 2011.

The increase was mainly driven by new store openings as well as a 5.4% rise in comparable store sales.

Comparable store sales growth consisted of a 5.2% gain in the average transaction size combined with a 0.2% rise in the number of transactions.

In the fiscal 2012, EBITDA grew 26.2% to $295.2m, or 18.4% of sales, while operating income rose 27.5% to $261.9m or 16.3% of sales.

The company operates 704 locations across the country, offering a broad assortment of everyday consumer products, general merchandise and seasonal items.

Dollarama, which operates 704 stores across the country, is facing tough competition from US-based discount retailer Dollar Tree in Western Canada.

Last year, Dollar Tree Canada acquired 86 stores from Vancouver-based Dollar Giant.

Image: The company operates 704 locations across the country, offering a broad assortment of everyday consumer products, general merchandise and seasonal items. Photo: Dollarama