- Discount retailer, Dollarama Inc (TSX:DOL) has seen recent sales figures fluctuate dramatically amid the COVID-19 pandemic
- Sales numbers initially went up early this quarter, due to customers stockpiling essential items in the early weeks of the outbreak
- However, recent lockdowns and self-isolation measures have decreased sales figures and temporarily shut some Dollarama sites in Canada and South America
- The company believes its strong previous year sales figures and available cash levels will sustain the company over the unpredictable months ahead
- At the previous market close, Dollarama Inc (DOL) was trading at C$39.04 a share, with a market cap of $12.2 billion
Discount retailer, Dollarama Inc (TSX:DOL) believes that a strong previous year will carry the company through recent sales fluctuations caused by COVID-19.
In its full-year financial report, released today, Dollarama has seen strong sales figures spill over into the present quarter.
Over the last 12 months, Dollarama’s sales grew by 4.3 per cent. Earnings before tax were also up 3 per cent.
Notably, net earnings increased around C$7 million, to $178.7 million. The slight bump in profit was organically grown through higher sales.
It seems these strong figures have followed the company into its first quarter of this year.
Dollarama sells a number of essential products across Canada and South America. As a result of stockpiling, sales figures are expected to be higher early on in the quarter.
However, these gains may be offset by a distinct slowdown in foot traffic as self-isolation measures and lockdowns keep potential customers at home.
This is already impacting the company’s DollarCity stores in South America. Currently, only 190 DollarCity stores are open and operational out of 228 locations across South America.
Similarly, the pandemic has forced the company to temporarily close around 45 stores in Canada, leaving the company’s current operating locations at 1,237.
Furthermore, the company stated that supply chain issues related to the pandemic, could impact the company’s operations in the coming months.
President and CEO of Dollarama, Neil Rossy, remains cautiously confident about the company’s future.
“In the current unprecedented situation, we cannot predict how shopping patterns will evolve.
“But as an essential business, we remain committed to maintaining well-stocked stores and the same compelling value proposition that has made Dollarama a household name,” he said.
The company currently has $490 million on hand, and a further $135 million left on its credit facility. Dollarama believes this amount of liquidity will sustain the company in the coming months.
At the previous market close, Dollarama Inc (DOL) was trading at $39.04 a share, with a market cap of $12.2 billion.