- Comparable store sales(1) growth of 8.7% for the fourth quarter and 12.8% for Fiscal 2024
- Diluted net EPS up 26.4% to
$1.15 for the fourth quarter; up 29.0% to$3.56 for Fiscal 2024 - Fiscal 2024 guidance met or exceeded on all key metrics
- Quarterly dividend increase of 29.9% to
$0.0920 per common share
Fiscal 2024 Fourth Quarter Results Highlights Compared to Fiscal 2023 Fourth Quarter Results
- Sales increased 11.3% to
$1,639.2 million , compared to$1,473.2 million - Comparable store sales grew 8.7%, over and above a 15.9% growth in the corresponding period of the previous fiscal year
- EBITDA(1) increased 19.5% to
$558.9 million , representing an EBITDA margin(1) of 34.1%, compared to 31.7% - Operating income increased 21.8% to
$464.7 million , representing an operating margin(1) of 28.3%, compared to 25.9% - Diluted net earnings per common share increased by 26.4%, from
$0.91 to$1.15
Fiscal 2024 Results Highlights Compared to Fiscal 2023 Results
- Sales increased 16.1% to
$5,867.3 million , compared to$5,052.7 million - Comparable store sales grew 12.8%, over and above a 12.0% growth the previous year
- EBITDA increased 22.2% to
$1,861.2 million , representing an EBITDA margin of 31.7%, compared to 30.1% - Operating income increased 25.5% to
$1,495.7 million , representing an operating margin of 25.5%, compared to 23.6% - Diluted net earnings per common share increased by 29.0%, from
$2.76 to$3.56 - 65 net new stores opened, same as prior year, bringing total store count to 1,551
- 7,125,730 common shares repurchased for cancellation for
$655.9 million
"In Fiscal 2024, we met or exceeded our guidance for all our key performance metrics, including higher than expected comparable store sales, translating into a 29% increase in EPS. Our strong financial and operational performance demonstrates the enduring strength of our business model and that our compelling value proposition continues to resonate with consumers, including in an uncertain economic context," said
"Looking ahead to Fiscal 2025, we expect to generate strong comparable store sales growth of between 3.5% to 4.5%, over and above an exceptional two years of double-digit growth, by staying true to our value and convenience promise to Canadian consumers,"
_______ |
(1) We refer the reader to the notes in the section entitled "Non-GAAP and Other Financial Measures" of this press release for the definition of these items and, where applicable, their reconciliation with the most directly comparable GAAP measure. |
Fiscal 2024 Fourth Quarter Financial Results
Sales for the fourth quarter of Fiscal 2024 increased by 11.3% to
Comparable store sales for the fourth quarter of Fiscal 2024 increased by 8.7%, consisting of a 11.2% increase in the number of transactions and a 2.2% decrease in average transaction size, over and above comparable store sales growth of 15.9% for the fourth quarter of Fiscal 2023. The increase in comparable store sales is primarily attributable to higher sales across all product categories, including continued higher than historical demand for consumables.
Gross margin(1) was 46.3% of sales in the fourth quarter of Fiscal 2024, compared to 44.6% of sales in the fourth quarter of Fiscal 2023. Gross margin as a percentage of sales was higher primarily as a result of lower inbound shipping costs, as well as lower logistics costs.
General, administrative and store operating expenses ("SG&A") for the fourth quarter of Fiscal 2024 increased by 13.1% to
EBITDA was
The Corporation's 50.1% share of Dollarcity's net earnings for the period from
Net financing costs increased by
Net earnings were
Fiscal 2024 Financial Results
Sales in Fiscal 2024 increased by 16.1% to
Comparable store sales increased 12.8% for Fiscal 2024, consisting of a 12.3% increase in the number of transactions and a 0.4% increase in average transaction size, over and above comparable store sales growth of 12.0% for Fiscal 2023. Strong comparable store sales reflect strong demand across all product categories, including stronger than historical demand for consumables, and the continued refresh of our product offering.
Gross margin was
SG&A for Fiscal 2024 was
EBITDA was
The Corporation's 50.1% share of Dollarcity's net earnings for the period from
Net financing costs increased by
Net earnings were
_____ |
(1) We refer the reader to the notes in the section entitled "Non-GAAP and Other Financial Measures" of this press release for the definition of these items and, where applicable, their reconciliation with the most directly comparable GAAP measure. |
Dollarcity Store Count and Dividend
During its fourth quarter ended
In the fourth quarter of Fiscal 2024, Dollarcity's board of directors approved the declaration and distribution of a first dividend totaling
Dollarama Normal Course Issuer Bid and Dividend
During Fiscal 2024, 7,125,730 common shares were repurchased for cancellation at a weighted average price of
On
Fiscal 2025 Outlook and Capital Allocation Strategy(1)
While the path of the economy and its impact on future consumer behaviour remains hard to predict, the Corporation expects to benefit from a continued positive consumer response to the convenience and compelling value it offers, through its expansive store network and broad offering of everyday and seasonal products at low fixed price points. In Fiscal 2025, the Corporation expects to generate continued comparable store sales growth, over and above two years of double-digit comparable store sales growth which was fueled, in part, by an inflationary environment for consumers.
In Fiscal 2025, we expect to maintain a strong gross margin as a percentage of sales, with the positive impact of lower inbound shipping costs anticipated through the first half of the fiscal year, partially offset by higher inventory shrinkage. SG&A as a percentage of sales is expected to continue to be pressured as a result of higher store labour and operating costs, partially offset by ongoing efficiency and labour productivity initiatives. In Fiscal 2025, the Corporation will maintain its balanced approach to capital allocation, investing in organic growth and keeping its focus on returning capital to shareholders. The Corporation also intends to maintain its pace of new store openings and investments in maintenance and transformational capital expenditures. In addition to its intent to maintain a dividend subject to quarterly approval, the Corporation intends to continue allocating the majority of excess cash toward the repurchase of shares through its normal course issuer bid.
______ |
(1) To be read in conjunction with the "Forward-Looking Statements" section of this press release. |
The Corporation's outlook for Fiscal 2025, as well as a summary of how it performed against Fiscal 2024 guidance, is provided below:
(as a percentage of sales except net new store | Fiscal 2024 | Fiscal 2025 | ||
Revised Guidance as | Actual results | Guidance | ||
Net new store openings | 60 to 70 | 65 | 60 to 70 | |
Comparable store sales | 11.0% to 12.0% | 12.8 % | 3.5% to 4.5% | |
Gross margin | 43.5% to 44.5% | 44.5 % | 44.0% to 45.0% | |
SG&A | 14.7% to 15.2% | 14.4 % | 14.5% to 15.0% | |
Capital expenditures(i) | ||||
(i) | For Fiscal 2024, capital expenditures exclude the cost of the property acquisition which closed on |
These guidance ranges are based on several assumptions, including the following:
- The number of signed offers to lease and store pipeline for the next 12 months, the absence of delays outside of our control on construction activities and no material increases in occupancy costs in the short- to medium-term
- Approximately three months visibility on open orders and product margins
- Continued positive customer response to our product offering, value proposition and in-store merchandising
- The active management of product margins, including through pricing strategies and product refresh, and of inventory shrinkage
- The inclusion of the Corporation's 50.1% share of net earnings of its equity-accounted investment
- The entering into of foreign exchange forward contracts to hedge the majority of forecasted merchandise purchases in USD against fluctuations of CAD against USD
- The continued execution of in-store productivity initiatives and realization of cost savings and benefits aimed at improving operating expense
- The absence of a significant shift in labour, economic and geopolitical conditions, or material changes in the retail environment
- No significant changes in the capital budget for Fiscal 2025 for new store openings, maintenance and transformational capital expenditures, the latter mainly related to IT projects
- The absence of unusually adverse weather, especially in peak seasons around major holidays and celebrations
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 foregoing forward-looking statements, including the Fiscal 2025 guidance and the underlying assumptions. These statements, including the various underlying assumptions, are forward-looking and should be read in conjunction with the cautionary statement on forward-looking statements.
Forward-Looking Statements
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, including the statements relating to the Corporation's Fiscal 2025 outlook and its capital allocation strategy, 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
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
Conference Call
Dollarama will hold a conference call to discuss its Fiscal 2024 fourth quarter and annual results today,
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 1,551 locations across
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
www.dollarama.com
Selected Consolidated Financial Information
13-week Periods Ended | 52-week Periods Ended | ||||||
(dollars and shares in thousands, except per share amounts) |
|
|
|
| |||
$ | $ | $ | $ | ||||
Earnings Data | |||||||
Sales | 1,639,171 | 1,473,223 | 5,867,348 | 5,052,741 | |||
Cost of sales | 880,557 | 815,703 | 3,253,907 | 2,854,535 | |||
Gross profit | 758,614 | 657,520 | 2,613,441 | 2,198,206 | |||
SG&A | 237,147 | 209,609 | 844,871 | 720,312 | |||
Depreciation and amortization | 89,597 | 86,278 | 348,142 | 331,792 | |||
Share of net earnings of equity-accounted investment | (32,808) | (19,772) | (75,293) | (45,399) | |||
Operating income | 464,678 | 381,405 | 1,495,721 | 1,191,501 | |||
Net financing costs | 35,384 | 34,014 | 144,842 | 115,394 | |||
Earnings before income taxes | 429,294 | 347,391 | 1,350,879 | 1,076,107 | |||
Income taxes | 105,524 | 86,103 | 340,419 | 274,244 | |||
Net earnings | 323,770 | 261,288 | 1,010,460 | 801,863 | |||
Basic net earnings per common share | |||||||
Diluted net earnings per common share | |||||||
Weighted average number of common shares outstanding | |||||||
Basic | 280,533 | 286,928 | 283,074 | 289,412 | |||
Diluted | 281,456 | 288,548 | 284,168 | 291,005 | |||
Other Data | |||||||
Year-over-year sales growth | 11.3 % | 20.3 % | 16.1 % | 16.7 % | |||
Comparable store sales growth (1) | 8.7 % | 15.9 % | 12.8 % | 12.0 % | |||
Gross margin (1) | 46.3 % | 44.6 % | 44.5 % | 43.5 % | |||
SG&A as a % of sales (1) | 14.5 % | 14.2 % | 14.4 % | 14.3 % | |||
EBITDA (1) | 558,901 | 467,683 | 1,861,166 | 1,523,293 | |||
Operating margin (1) | 28.3 % | 25.9 % | 25.5 % | 23.6 % | |||
Adjusted net debt to EBITDA ratio (1) | 2.16x | 2.71x | 2.16x | 2.71x | |||
Capital expenditures (2) | 59,975 | 52,558 | 278,764 | 156,827 | |||
Number of stores (3) | 1,551 | 1,486 | 1,551 | 1,486 | |||
Average store size (gross square feet) (3) (4) | 10,422 | 10,407 | 10,422 | 10,407 | |||
Declared dividends per common share | |||||||
As at | ||||
(dollars in thousands) |
|
| ||
$ | $ | |||
Statement of Financial Position Data | ||||
Cash and cash equivalents | 313,915 | 101,261 | ||
Inventories | 916,812 | 957,172 | ||
Total current assets | 1,309,093 | 1,156,947 | ||
Property, plant and equipment | 950,994 | 802,750 | ||
Right-of-use assets | 1,788,550 | 1,699,755 | ||
Total assets | 5,263,607 | 4,819,656 | ||
Total current liabilities | 677,846 | 1,162,874 | ||
Total non-current liabilities | 4,204,913 | 3,628,372 | ||
Total debt (1) | 2,264,394 | 2,251,903 | ||
Net debt (1) | 1,950,479 | 2,150,642 | ||
Shareholders' equity | 380,848 | 28,410 | ||
(1) | Refer to the section below entitled "Non-GAAP and Other Financial Measures" for the definition of these items and, where applicable, their reconciliation with the most directly comparable GAAP measure. |
(2) | For Fiscal 2024, includes the acquisition of the industrial property adjacent to the Corporation's distribution center in the |
(3) | At the end of the period. |
(4) | The Corporation revised its prior years square footage information to align with its current and updated methodology. |
Non-GAAP and Other Financial Measures
In addition to the measures prescribed by the International Financial Reporting Standards as issued by the International Accounting Standards Board ("IFRS"), we have included certain non-GAAP and other financial measurements in our financial documents to provide a better understanding of the Corporation's financial results. The Corporation uses the following non-GAAP and other financial measures and ratios: EBITDA, EBITDA margin, total debt, net debt, adjusted net debt to EBITDA ratio, gross margin, operating margin, SG&A as a percentage of sales, comparable store sales and comparable store sales growth. We believe that such 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 majority of these measures are used to bridge differences between external reporting under GAAP and external reporting that is tailored to the retail industry, and should not be considered in isolation or as a substitute for financial performance measures calculated in accordance with GAAP.
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.
(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. Management believes EBITDA represents a useful supplemental metric to assess profitability and measure the Corporation's underlying ability to generate liquidity through operating cash flows.
13‘week Periods Ended | 52-week Periods Ended | ||||||
| (dollars in thousands) |
|
|
|
| |||
$ | $ | $ | $ | ||||
A reconciliation of operating income to EBITDA is included below: | |||||||
Operating income | 464,678 | 381,405 | 1,495,721 | 1,191,501 | |||
Add: Depreciation and amortization | 94,223 | 86,278 | 365,445 | 331,792 | |||
EBITDA | 558,901 | 467,683 | 1,861,166 | 1,523,293 | |||
Total debt
Total debt represents the sum of long-term debt (including unamortized debt issue costs, accrued interest and fair value hedge “ basis adjustment), short-term borrowings under the US commercial paper program and other bank indebtedness (if any). Management believes Total debt is a measure that is useful to facilitate the understanding of the Corporation's corporate financial position in relation to its financing obligations.
(dollars in thousands) | As at | ||
A reconciliation of long-term debt to total debt is included below: |
|
| |
Senior unsecured notes (the "Fixed Rate Notes") bearing interest at: | $ | $ | |
Fixed annual rate of 5.165% payable in equal semi-annual instalments, maturing | 450,000 | 450,000 | |
Fixed annual rate of 2.443% payable in equal semi-annual instalments, maturing | 375,000 | 375,000 | |
Fixed annual rate of 5.533% payable in equal semi-annual instalments, maturing | 500,000 | - | |
Fixed annual rate of 1.505% payable in equal semi-annual instalments, maturing | 300,000 | 300,000 | |
Fixed annual rate of 1.871% payable in equal semi-annual instalments, maturing | 375,000 | 375,000 | |
Fixed annual rate of 5.084% payable in equal semi-annual instalments, maturing | 250,000 | 250,000 | |
Fixed annual rate of 3.550% payable in equal semi-annual instalments, matured on | - | 500,000 | |
Unamortized debt issue costs, including | (9,049) | (9,107) | |
Accrued interest on the Fixed Rate Notes | 21,460 | 17,177 | |
Fair value hedge “ basis adjustment on interest rate swap | 1,983 | (6,167) | |
Total debt | 2,264,394 | 2,251,903 | |
Net debt
Net debt represents total debt minus cash and cash equivalents. Management believes Net debt represents a useful additional measure to assess the financial position of the Corporation by showing all of the Corporation's financing obligations, net of cash and cash equivalents.
(dollars in thousands) | As at | |||
|
| |||
$ | $ | |||
A reconciliation of total debt to net debt is included below: | ||||
Total debt | 2,264,394 | 2,251,903 | ||
Cash and cash equivalents | (313,915) | (101,261) | ||
Net debt | 1,950,479 | 2,150,642 | ||
(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 12 months. Management uses this ratio to partially assess the financial condition of the Corporation. An increasing ratio would indicate that the Corporation is utilizing more debt per dollar of EBITDA generated.
(dollars in thousands) | As at | |||
|
| |||
$ | $ | |||
A calculation of adjusted net debt to EBITDA ratio is included below: | ||||
Net debt | 1,950,479 | 2,150,642 | ||
Lease liabilities | 2,069,229 | 1,960,743 | ||
Unamortized debt issue costs, including | 9,049 | 9,107 | ||
Fair value hedge - basis adjustment on interest rate swap | (1,983) | 6,167 | ||
Adjusted net debt | 4,026,774 | 4,126,659 | ||
EBITDA for the last twelve-month period | 1,861,166 | 1,523,293 | ||
Adjusted net debt to EBITDA ratio | 2.16x | 2.71x | ||
EBITDA margin
EBITDA margin represents EBITDA divided by sales. Management believes that EBITDA margin is useful in assessing the performance of ongoing operations and efficiency of operations relative to its sales.
13-week Periods Ended | 52-week Periods Ended | ||||||
| (dollars in thousands) |
|
|
| January | |||
$ | $ | $ | $ | ||||
A reconciliation of EBITDA to EBITDA margin is included below: | |||||||
EBITDA | 558,901 | 467,683 | 1,861,166 | 1,523,293 | |||
Sales | 1,639,171 | 1,473,223 | 5,867,348 | 5,052,741 | |||
EBITDA margin | 34.1 % | 31.7 % | 31.7 % | 30.1 % | |||
(C) Supplementary Financial Measures
Gross margin | Represents gross profit divided by sales, expressed as a percentage of sales. |
Operating margin | Represents operating income divided by sales, expressed as a percentage of sales. |
SG&A as a % of sales | Represents SG&A divided by sales. |
Comparable store sales | Represents 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. |