Dollarama expects its costs to rise faster this year, primarily due to inflationary pressures on wages. “From pedestrians to BMW drivers,” the retailer, however, expects to attract a large pool of customers as households seek respite from inflation.
The Montreal-based company anticipates that its general expenses will represent between 14.7% and 15.2% of its sales in fiscal 2024, which will end at the end of January 2024. This compares with a ratio of 14.3% for the previous year.
The “vast majority” of this increase would be attributable to the labor market, said Dollarama President and CEO Neil Rossy during a conference call on Wednesday to discuss its fourth quarter results and its forecast for the next fiscal year. “The job market is still extremely tight. »
Asked by an analyst about Dollarama’s retention efforts, Rossy said the company puts work environment before wages. “It is a priority for the company that, despite the pay, our employees value their experience and that we provide an adequate working environment. »
In a tight labor market, Mr. Rossy finds it normal to experience some turnover. “It’s a first job for a lot of people. The intention of our company is that the work environment is safe, that it is positive, that there are opportunities for promotions. Even if it’s not a high-paying job, it’s a job they enjoy doing. »
In recent years, Dollarama has been criticized by community and union groups who denounce working conditions, including low pay, the use of employment agencies or breaches of health rules during the pandemic. Allegations that the company has always refuted, which has already said that it is the victim of “false” allegations. The employer claims to respect the laws and provide a safe work environment.
Dollarama reported results earlier Wednesday that beat analysts’ expectations as households seek respite from inflation.
In the fourth quarter ended January 29, the company disclosed that the number of transactions increased by 14.1% in stores opened last year.
People who frequent Dollarama go there “on foot as well as in BMWs”, says Mr. Rossy to illustrate the retailer’s appeal to a broad consumer profile. “It’s a widespread interest in the bargains we’ve always offered. Among them, there are people who have never felt the need to shop at Dollarama. »
Sales increased by 20.3% to 1.47 billion. Comparable store sales, i.e. stores opened last year, increased 15.9%.
The company’s net profit reached 261.3 million, compared to 220 million in the same period last year. Diluted earnings per share are 91 cents.
Prior to the earnings release, analysts had expected diluted earnings per share of 85 cents and revenue of $1.39 billion, according to financial data firm Refinitiv.
Dollarama shares gained $1.82, or 2.31%, to $80.32 on the Toronto Stock Exchange in early afternoon.
