In the third quarter the number of Dollarama stores in operation rose to 761 from 690 in the year-earlier period.Deborah Baic/The Globe and Mail
Dollarama Inc. had a big increase in net earnings in its latest quarter, as well as a jump in revenue from higher sales at established locations and additional stores in its network.
The general merchandiser to the budget conscious said Thursday that net profits in the three months ended Oct. 28 were $51.5-million or 68 cents per diluted share.
That was up from $41.8-million or 55 cents in the comparable year-earlier period.
Dollarama's revenues soared 14.4 per cent to just under $458-million from $400.3-million and included a 6.6-per-cent increase in same-store sales at locations open at least a year.
The number of stores in operation rose to 761 from 690 in the year-earlier period. Normalized net earnings, or those adjusted for non-recurring charges net of tax impacts, were $53.7-million or 71 cents per diluted share, up 29.1 per cent from $41.8-million 55 cents a year ago.
Dollarama had been expected to earn 70 cents per share in adjusted net earnings on $458-million in revenues in the third quarter, according to analysts polled by Thomson Reuters.
The discount retailer originally sold products for a dollar but has since added more expensive items priced at up to $3 that were expected to benefit the bottom line.
"We once again delivered strong results in the third quarter," said chief executive officer Larry Rossy.
"We are pleased with our continued double-digit growth performance in sales,' Mr. Rossy said, adding that the company was "particularly happy" about the growth in same-store sales.
"We have maintained the focus on execution in a quarter where we have opened a record 26 new stores and we are on track to open 75 to 80 new stores for this fiscal year," he added.
The discount retailer is expanding faster than planned, taking advantage of a mall construction boom in Canada.
Dollarama also recently appointed the chief executive officer of auto parts distributor Uni-Select Inc. as an independent director of the company, replacing Matthew Levin.