By Adriano Marchese
Dollarama Inc. is expected to post higher profits and revenue in the second quarter of fiscal 2023. The Canadian dollar store chain has managed its supply chains well and has been able to manage labor inflation. labor and costs during the pandemic. Investors will be keen to hear how the company’s value proposition continues to resonate with consumers, especially against a backdrop of rising inflation. Here’s what you need to know ahead of Friday’s results.
REVENUES: According to analysts polled on FactSet, revenue is expected to reach C$1.19 billion ($907 million) in the period, from C$1.03 billion a year earlier.
ADJUSTED EARNINGS PER SHARE: Earnings on an adjusted basis are expected to rise to C$0.64 at analyst consensus, up from C$0.48.
WHAT TO LOOK FOR:
SALES: Scotiabank suggests that the addition of new stores and growth in same-store sales will drive revenue up nearly 17% in the quarter. Same-store sales growth expected to be 11.8% higher year-over-year due to overlap with the prior year period when the Province of Ontario banned the sale of non-essential goods .
EFFECTS OF INFLATION: Scotiabank says the quarter likely saw a higher mix of consumables sales as consumers flocked to Dollarama stores for essential items to combat the impact of rising prices elsewhere . “We expect strong demand for Dollarama’s products as its value proposition continues to resonate well with Canadian consumers in a high inflation environment.
COSTS: Last year, costs were higher as Dollarama incurred Covid-related costs. Scotiabank expects costs to face a different challenge related to near-term wage pressure.
Write to Adriano Marchese at [email protected]