Dollarama posts a big jump in Q4 sales

The discounter is upping its quarterly dividend and reporting solid comparable store sales growth.

Discount grocer Dollarama is reporting an 11% rise in fourth-quarter sales to $1.22 billion, up from $1.10 billion a year earlier.

The Montreal-based retailer’s net income, meanwhile, spiked to $220 million, up from $173.9 million a year prior.

The Q4 sales increase was driven by growth in the total number of stores over the past 12 months, from 1,356 stores at the beginning of 2021 to 1,421 a year later. It came from comparable store sales, which grew 5.7% for the quarter, according to the company.

During its Q4 ended Dec. 31, 2021, its Latin retail brand, Dollarcity opened 38 net new stores, compared to 24 net new stores in the same period last year. For Q4, Dollarcity opened a total of 86 net new stores, compared to 36 in 2020.

The discounter is on a bit of a roll of late, after initially being forced to shutter 104 locations thanks to pandemic restrictions.

According to Neil Rossy, president and CEO, the retailer’s performance speaks to the resilience of its business model and the relevance of its value promise to Canadian consumers. Rossy warned however, that the environment is complex and volatile heading into Fiscal 2023.

Dollarama recently entered into a long-term lease for another warehouse, the company’s seventh, to be located in Laval, to increase its capacity in support of its long-term target of 2,000 stores in Canada by 2031. The new 500,000 square foot facility is under construction and expected to be operational by the end of Fiscal 2023.

This January, the company announced the addition of a Bradford store, to service the key Simcoe County market.