Dollarama expands growth plans as profits slip amid pandemic

Dollarama Inc. remained bullish on the future of the discount chain in Canada even as its profits slipped amid higher costs and restrictions related to the pandemic in its latest quarter.

The Montreal-based retailer raised the number of stores it plans to have in Canada to 2,000 within the next decade, a nearly 50% jump compared with its total of 1,356 stores at the end of January.

"Based on our historical performance, our hard-earned position as a weekly shopping destination for Canadian families, and a careful evaluation of market potential and dynamics, we are increasing our long-term growth target in Canada to 2,000 stores by 2031,'' Neil Rossy, Dollarama president and CEO, said in a statement.

The new target is up from an earlier goal of 1,700 stores by 2027.

The plan to open new stores across the country continues despite a tough fourth quarter--historically the company's strongest sales period of the year.

"Our strong sales momentum was interrupted by the introduction of more stringent public health measures in several provinces in the month of December," Rossy said. "These stricter measures resulted in an abrupt and sustained decline in store traffic and sales through to fiscal year-end."

The retailer said it earned $173.9 million or 56 cents per diluted share for the quarter ended Jan. 31, down from a profit of $178.7 million or 57 cents per diluted share a year earlier.

Sales in the 13-week period totalled $1.10 billion, up from nearly $1.07 billion.

Excluding temporarily closed stores, comparable store sales for the quarter fell 0.2% compared with a year earlier.

Meanwhile, Dollarama's full-year results showed positive growth, with sales increasing 6.3% to $4.03 million in fiscal 2021.

"We achieved solid results in a truly unprecedented year, which reconfirmed the resilience of our business model and the relevance of our offering to Canadians from all walks of life," Rossy said.