Canadian discount retailer Dollarama Inc said on Wednesday that sales regained momentum in recent weeks following an easing of pandemic-related restrictions, sending its shares up nearly 6.3% to an over three-year high.
The upbeat comments come after the company fell short of holiday quarter revenue estimates due to the strict COVID-19 curbs put in place to control a resurgence in cases.
“We’re already seeing Easter being strong right now, and it’s a week in advance also (versus a year earlier), and summer sales are doing very well, which they weren’t last year,” Michael Ross, the company’s former chief financial officer who is now an adviser, said on an earnings call.
The company’s shares were trading at C$55.51, also boosted by a dividend hike and plans to resume share buybacks next year.
Dollarama said it now targets to have 2,000 stores in Canada by the next decade, from a previous aim of 1,700 stores by 2027, with plans to open 60 to 70 stores this fiscal year.
The company said it opened 65 net new stores in fiscal 2021, despite the pandemic and consistent with prior years.
Net sales rose 3.6% to C$1.10 billion ($872.95 million) in the fourth quarter ended Jan. 31, but missed Refinitiv IBES estimates of C$1.13 billion.
Sales took a knock as provincial authorities in December imposed stricter in-store capacity limits and a temporary ban on the sale of non-essential items in Quebec.
Net earnings fell to C$173.9 million, or 56 Canadian cents per share, in line with estimates.
($1 = 1.2601 Canadian dollars)
Reporting by Mehr Bedi in Bengaluru; Editing by Ramakrishnan M. and Sriraj Kalluvila; Reuters