Tags: Dollarama | Open | More | Stores | Profit | Jumps

Dollarama to Open More Stores as Profit Jumps

Thursday, 07 April 2011 11:01 AM EDT

Dollarama Inc., Canada's largest operator of dollar stores, said Thursday it plans to open 50 new stores, accelerating a rapid growth trajectory that will give it 700 outlets within a year.

The company, which went public in 2009, has grown quickly as bargain-hunting Canadians flocked to its stores during the economic downturn and then stayed as the economy recovered.

Its stock hit its highest level since Dollarama went public Thursday morning, up 1 percent at C$31 on the Toronto Stock Exchange. It has risen 37 percent in the past 52 weeks.

"Dollarama continues to show significant revenue growth and impressive profitability," Versant Partners analyst Neil Linsdell said. "We expect this growth to continue."

The company has been working to improve store productivity and offering more price points.

"Continuing with these improvements, we could see a modest dividend as early as next year," Linsdell said.

While Dollarama has been the dominant player in the Canadian dollar-store sector, it could face increased competition from Dollar Tree Inc., a U.S. chain that acquired Canada's Dollar Giant Store Ltd.

Montreal-based Dollarama said its profit jumped 23 percent in its fourth quarter, ended Jan. 30, to C$42 million ($44 million), or 56 Canadian cents a share, from C$34 million, or 45 Canadian cents a share, in the year-before quarter.

Analysts on average were looking for earnings of 53 Canadian cents a share on revenue of C$411.5 million, according to Thomson Reuters I/B/E/S.

Fourth-quarter revenue was up 12.3 percent at C$408.7 million after the company opened 49 net new stores during the fiscal year. Dollarama, whose investors include Bain Capital, said sales at stores open for at least a year, a key indicator for retailers, rose 5.3 percent.

Dollarama currently has 652 stores across Canada. It is speculated to be squarely in the sights of private equity players seeking retail acquisitions.

In the United States, Family Dollar, a similar chain, has received several takeover bids.

© 2025 Thomson/Reuters. All rights reserved.


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Dollarama Inc., Canada's largest operator of dollar stores, saidThursday it plans to open 50 new stores, accelerating a rapid growth trajectory that will give it 700 outlets within a year. The company, which went public in 2009, has grown quickly as bargain-hunting...
Dollarama,Open,More,Stores,Profit,Jumps
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2011-01-07
Thursday, 07 April 2011 11:01 AM
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