Dollarama (TSX: DOL) reported its financials for fiscal Q1 2024 ended April 30, 2023, headlined by a 20.7% in total sales to $1.29 billion, compared to $1.07 billion in the corresponding period of the prior fiscal year.

This increase was driven by an uptick in the total number of stores over the previous year (from 1,431 on May 1, 2022 to 1,507 on April 30, 2023) as well as greater comparative store sales.

Comparable store sales saw 17.1% growth, driven by a 15.5% increase in the number of transactions and a 1.4% rise in the average transaction size, as compared to a 7.3% growth in comparable store sales during the same period in the previous fiscal year. The firm said that the increase in the comparable store sales is attributed to the robust demand experienced across the product categories, including consumables, seasonal items, and general merchandise.

“Canadians from all walks of life continue to respond positively to our compelling value proposition and affordable product mix. In the context of persistent inflationary pressure, we delivered a 17% increase in comparable store sales in the first quarter of Fiscal 2024,” said CEO Neil Rossy.

Gross margin remained flat this quarter at 42.2% compared to last year’s 42.1%. EBITDA showed a significant increase of 22.1%, reaching $366.3 million, which accounted for 28.3% of sales. Additionally, the operating income experienced a notable growth of 26.2%, totaling $277.6 million, equivalent to 21.4% of sales.

Amid the increasing borrowing rate environment, the firm saw financing costs jump to $36.7 million in Q1 2024 versus $24.4 million in the previous year.

Despite this, net earnings for the quarter came down to $179.9 million compared with $145.5 million a year earlier. This translates to $0.63 earnings per share, beating the street estimate of $0.59 per share.

In the first quarter, the company opened 21 net new locations, with the company hitting 1,500 locations.

The firm also ended the quarter with a cash position of $252.1 million, up from previous quarter’s ending balance of $101.3 million. This brings the balance of the current assets to $1.27 billion while current liabilities ended at $1.12 billion.

The retailer also reiterated its fiscal 2024 outlook, with comparable store sales expected to post growth between 5% – 6%.

Dollarama’s financial performance for the quarter contrasts its fellow value retailer in America Dollar General Corporation (NYSE: DG). While Dollar General saw its quarterly revenue increase to $9.34 billion it forecasts full-year fiscal 2023 earnings per share to be flat to down 8% from last year. It had earlier predicted 4%-6% growth.

It expects 1%-2% growth in same-store sales, down from its previous forecast of 3%-3.5%. And net sales growth is also expected to dwindle down in the range of 3.5% to 5.0%, compared to the firm’s previous forecast of 5.5% to 6%.

All this despite the American retailer ending the quarter with more stores than last year, counting 19,294 stores versus 18,356 locations a year ago.

Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.