Yahoo Finance Dollarama raises dividend after sales, earnings climb
Dollarama Inc. raised its dividend after ending its fiscal year on a high, buoyed by elevated inflation levels and high interest rates that sent shoppers seeking out value items, particularly on consumables.
The Montreal-based company reported on March 29 that sales increased by more than 20 per cent to $1.47 billion, beating expectations of $1.39 billion in the fourth quarter ended Jan. 29. Earnings before interest, tax, debt and amortization increased almost 19 per cent to $467.7 million.
Comparable store sales, a metric that excludes newly opened stores in the period, grew 16 per cent and in the fiscal year, the value retailer opened 65 new brick-and-mortar locations.
Dollarama raised its quarterly dividend by 28 per cent to 7.08 cents per share, from 5.08 cents.
“Our outstanding performance in fiscal 2023 … further reinforces the relevance of our value retail concept for consumers, the enduring strength of our unique business model and our disciplined execution,” said chief executive Neil Rossy in a statement.
For the full fiscal year, Dollarama’s earnings jumped nearly 17 per cent to $5.05 billion. Net earnings totalled $801.9 million, or $2.76 per diluted common share. Last fiscal year, net earnings were $663.2 million or $2.18 per diluted share.
High levels of inflation have been a boost for Dollarama compared to other businesses, all of which are contending with tighter economic conditions after rising inflation forced the Bank of Canada to lift interest rates at an unprecedented pace starting last March.
The consumer price index, which measures inflation growth, peaked in June at 8.1 per cent and the latest reading pegged year-over-year price growth at 5.2 per cent, a steady decrease but still outside the Bank of Canada’s target of two per cent.
For the first half of the fiscal 2024 year, Dollarama expects to benefit from strong demand as inflation levels stay high, but expects demand to normalize in the second half of the year.
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