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Tuesday, 07 February 2023
Dollarama’s Financials: Full Year and Fourth Quarter Results – Fiscal Year 2022

Dollarama’s Financials: Full Year and Fourth Quarter Results – Fiscal Year 2022

2022-10-31

 

Dollarama Inc. operates a chain of general merchandise stores under the Dollarama brand. The Company operates in four business segments: Dollarama U.S., which primarily operates in the United States; Dollarama Latin America, which primarily operates in Mexico, Central America and the Caribbean; Dollarama International, which primarily operates in the United Kingdom, Ireland, Australia and New Zealand; and The Home Store, which primarily operates in Canada.

The Dollarama U.S. segment sells general merchandise, including discounted brand-name products under the Dollarama brand at its discount retail stores in the United States. The Dollarama U.S. segment also sells general merchandise at its online stores in the United States. The Dollarama Latin America segment primarily operates in Mexico, Central America and the Caribbean. The Dollarama International segment primarily operates in the United Kingdom, Ireland, Australia and New Zealand. The Dollarama Home Store segment primarily sells general merchandise, including housewares, craft supplies, seasonal items, greeting cards and seasonal merchandise, such as Christmas trees and Thanksgiving decorations, at its discount retail stores in Canada.

How Does Dollarama Make Money?

The Company’s segments sell products under the brand names of Dollarama, which are primarily sourced from third party suppliers. The Company’s U.S. stores primarily sell products at discount prices under the Dollarama brand name. The Company’s international stores primarily sell products under the brand names of Le Dollar, which are primarily sourced from third party suppliers.

The Company’s segments also sell products under the house brand name of The Home Store. The Company’s Canadian stores sell products under the house brand name of HomeSense. The Company’s online stores sell products at various price points under various brand names and country-specific Top Shop and TopSelling products. The Company also has a loyalty program called Club Dollar, which offers rewards to members who regularly shop at its stores.

How Does Dollarama Spend Money?

Product development is a significant expense for the Company. Research and development expenses, as a percentage of net sales, were 3.2% for the year ended December 31, 2018. For the year ended December 31, 2017, research and development expenses were 3.1% of net sales.

The Company’s advertising expenses were $275.6 million for the year ended December 31, 2018. The Company’s advertising expenses were $265.0 million for the year ended December 31, 2017. The Company’s advertising expenses include the cost of television, radio and digital advertisements as well as administrative costs necessary to support its advertising expenditures.

The Company’s selling, general and administrative expenses were $398.6 million for the year ended December 31, 2018. The Company’s selling, general and administrative expenses were $388.6 million for the year ended December 31, 2017. The Company’s selling, general and administrative expenses include costs associated with the Company’s growth and its organizational structure, including labor and benefits related costs, rent, depreciation and other expenses associated with its corporate offices.

Dividend Declaration

Dollarama’s Board of Directors has declared a $0.03 per share quarterly dividend on the Company’s common shares. The dividend is payable on June 15, 2020, to shareholders of record on June 2, 2020, and is based on a deemed closing price of $13.25 on the last trading day of the June 1, 2020, quarterly period.

Buying Office Supplies

According to a survey by Leonard Laski on behalf of the Canada Mortgage and Housing Corporation, Canadians across the country are feeling the impact of an increasingly tight rental market. Nearly two-thirds of respondents said that they are spending more on rent than a year ago, and 29% said that they are spending more than they can afford. The survey also found that one in five respondents reported that they have been threatened with eviction because they were late with their rent payment.

Key Operational Metric: Same Store Sales Growth

Same store sales growth is the difference between sales growth at existing locations and sales growth at new locations. The Company’s U.S. stores had same store sales growth of 2.2% for the year ended December 31, 2018. The Company’s U.S. stores had same store sales growth of 1.9% for the year ended December 31, 2017.

Key Financial Metric: Adjusted EBITDA Margin

 
 

This metric represents operating income before interest, taxes, depreciation and amortization. The Company’s adjusted EBITDA margin was 26.6% for the year ended December 31, 2018. The Company’s adjusted EBITDA margin was 26.5% for the year ended December 31, 2017.

Key Investor Momentum Indicator: Dividend Rate Increase

This indicator measures the rate at which a company pays out dividends. A high percentage here may indicate that a company is financially strong and is able to invest a large percentage of its earnings back into the business to expand its operation. A low percentage here may indicate that a company is not in a position to pay out dividends at the moment and may be in need of financial assistance.

Conclusion

Dollarama Inc. operates a chain of general merchandise stores under the Dollarama brand. The Company’s U.S. segment sells general merchandise, including discounted brand-name products under the Dollarama brand at its discount retail stores in the United States. The Dollarama U.S. segment also sells general merchandise at its online stores in the United States. The Dollarama Latin America segment primarily operates in Mexico, Central America and the Caribbean. The Dollarama International segment primarily operates in the United Kingdom, Ireland, Australia and New Zealand. The Dollarama Home Store segment primarily sells general merchandise, including housewares, craft supplies, seasonal items, greeting cards and seasonal merchandise, such as Christmas trees and Thanksgiving decorations, at its discount retail stores in Canada.

Dollarama Inc. operates as a discount department store that sells various brand-name products under the brand names of Dollarama, which are primarily sourced from third party suppliers. The Company’s primary products are generally home and lifestyle products at discount prices.

The Company’s segments sell products under the brand names of Dollarama, which are primarily sourced from third party suppliers. The Company’s U.S. stores primarily sell products at discount prices under the Dollarama brand name. The Company’s international stores primarily sell products under the brand names of Le Dollar, which are primarily sourced from third party suppliers.

The Company’s segments also sell products under the house brand name of The Home Store. The Company’s Canadian stores sell products under the house brand name of HomeSense. The Company’s online stores sell products at various price points under various brand names and country-specific Top Shop and TopSelling products. The Company also has a loyalty program called Club Dollar, which offers rewards to members who regularly shop at its stores.

How Does Dollarama Make Money?

The Company’s segments sell products under the brand names of Dollarama, which are primarily sourced from third party suppliers. The Company’s U.S. stores primarily sell products at discount prices under the Dollarama brand name. The Company’s international stores primarily sell products under the brand names of Le Dollar, which are primarily sourced from third party suppliers.

The Company’s segments also sell products under the house brand name of The Home Store. The Company’s Canadian stores sell products under the house brand name of HomeSense. The Company’s online stores sell products at various price points under various brand names and country-specific Top Shop and TopSelling products. The Company also has a loyalty program called Club Dollar, which offers rewards to members who regularly shop at its stores.

How Does Dollarama Spend Money?

Product development is a significant expense for the Company. Research and development expenses, as a percentage of net sales, were 3.2% for the year ended December 31, 2018. For the year ended December 31, 2017, research and development expenses were 3.1% of net sales.

The Company’s advertising expenses were $275.6 million for the year ended December 31, 2018. The Company’s advertising expenses were $265.0 million for the year ended December 31, 2017. The Company’s advertising expenses include the cost of television, radio and digital advertisements as well as administrative costs necessary to support its advertising expenditures.

The Company’s selling, general and administrative expenses were $398.6 million for the year ended December 31, 2018. The Company’s selling, general and administrative expenses were $388.6 million for the year ended December 31, 2017. The Company’s selling, general and administrative expenses include costs associated with the Company’s growth and its organizational structure, including labor and benefits related costs, rent, depreciation and other expenses associated with its corporate offices.

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