Retailer Dollarama reports Q1 profit down from year ago, but sales rise

A Dollarama store is pictured in Montreal, June 11, 2013. (Paul Chiasson / THE CANADIAN PRESS)

MONTREAL — Dollarama Inc. reported its first-quarter profit fell compared with a year ago as it closed more than 100 stores and increased spending to help keep its employees and customers safe from the pandemic.

The retailer said Wednesday it earned nearly $86.1 million or 28 cents per share for the quarter ended May 3 compared with a profit of $103.5 million or 33 cents per share in the same quarter a year earlier.

Sales totalled $844.8 million, up from $828.0 million a year ago.

The company said the rise in sales was attributable an increase in its total number of stores compared with a year ago and modest comparable store sales growth in the stores that were open, driven by things like cleaning products, health and hygiene essentials and food.

Excluding temporarily closed stores, Dollarama said comparable store sales grew 0.7 per cent. Including the temporarily closed stores, comparable store sales fell 2.4 per cent.

The retailer said the growth at the stores that were open consisted of a 22.6 per cent increase in average transaction size, but a 17.9 per cent drop in the number of transactions as shoppers reduced how often they shopped, but bought more when they did go out.

Dollarama said it spent $15.0 million in the second half of the quarter to protect the health and safety of employees and customers, and to support employees.

"Our first quarter results reflect the direct and indirect effects of COVID-19 while demonstrating that Dollarama adapted quickly to an unprecedented situation in order to serve Canadians from coast to coast," Dollarama chief executive Neil Rossy said in statement.

"As provinces across Canada carefully and gradually resume economic activity, we will continue to maintain and enhance our COVID-19 operating procedures and preventive measures."

The retailer said it has implemented strict protocols to minimize risk to employees and customers in any proven or probable case of COVID-19, including cleaning protocols, self-isolation directions and financial support for directly or indirectly impacted employees.

It said it has had a total of 20 COVID-19 store employee cases up to Monday.

Dollarama said 1,197 stores were open at the end of the quarter and 104 were closed temporarily. However, the company said just 32 stores were closed temporarily as of Monday.