Dollarama reports strong results for fiscal 2014 and increases dividend by 14%
PR Newswire Association LLC |
Financial and Operating Highlights
All comparative figures below and in the "Financial Results" sections that follow are for the fourth quarter and fiscal year ended
Throughout this press release, all references to "Fiscal 2013" are to the Corporation's fiscal year ended
The Corporation's fiscal year ends on the Sunday closest to
Comparable Store Sales
- Comparable store sales(2) (on a comparable 13-week basis) grew 1.1% in the fourth quarter of Fiscal 2014;
- Comparable store sales (on a comparable 52-week basis) grew 3.8% in Fiscal 2014.
Compared to the Fourth Quarter of Fiscal 2013 (13 weeks compared to 14 weeks)
- Sales increased by 3.6% to 582.3 million (or 9.9% on a comparable 13-week basis);
- Gross margin(3) was 38.4% of sales compared to 38.7% of sales;
- EBITDA(1) grew 9.7% to
$130.7 million , or 22.4% of sales; - Operating income grew 8.6% to
$117.6 million , or 20.2% of sales; and - Diluted net earnings per share increased by 12.5%, from
$1.04 to$1.17 .
In addition, during the fourth quarter of Fiscal 2014, the Corporation opened 27 net new stores for a total of 89 net new stores opened since
Compared to Fiscal 2013 (52 weeks compared to 53 weeks)
- Sales increased by 11.1% to
$2,064.7 million (or 13.0% on a comparable 52-week basis); - Gross margin (3) was 37.1% of sales compared to 37.4% of sales;
- EBITDA (1) grew 13.3% to
$402.4 million , or 19.5% of sales; - Operating income grew 12.2% to
$354.5 million , or 17.2% of sales; and - Diluted net earnings per share increased by 18.0%, from
$2.94 to$3.47 .
"Fourth quarter and full-year financial results came out strong despite the adverse impact of severe weather conditions on store traffic, particularly in December, during our peak sales period. While not as severe, weather conditions did remain challenging for the remainder of the winter season," stated
Fourth Quarter Financial Results
The fourth quarter of Fiscal 2014 had 13 weeks whereas the fourth quarter of Fiscal 2013 had 14 weeks. The additional week of sales in Fiscal 2013 accounted for an incremental
The comparable store sales performance was impacted by a 7.5% decrease for the month of
On a 13-week basis, comparable store sales growth consisted of a 4.4% increase in the average transaction size, partially offset by a 3.1% decrease in the number of transactions. This decrease in the number of transactions was mainly the result of a significant reduction in store traffic and the temporary closure of approximately 80 stores for periods ranging from a few hours to two consecutive days, as a result of adverse weather and power failures in some of the Corporation's core markets, the majority of the impacted days occurring during the two weekends leading up to
Average transaction size improved as the sale of products priced higher than
The gross margin was 38.4% of sales in the fourth quarter of Fiscal 2014, lower when compared to 38.7% of sales in the fourth quarter of Fiscal 2013. This decrease was primarily the result of a 7.5% decrease in comparable store sales for the month of
SG&A in the fourth quarter of Fiscal 2014 was
SG&A for the fourth quarter of Fiscal 2014 was 15.9% of sales, an improvement of 1.6% compared to 17.5% of sales in the corresponding period of Fiscal 2013. The reduction in SG&A as a percentage of sales is the result of several store labour productivity improvements made in Fiscal 2014 as well as the timing of other operating expenses incurred.
Net financing costs increased by
For the fourth quarter of Fiscal 2014, net earnings increased to
Fiscal 2014 Financial Results
Sales in Fiscal 2014 increased by 11.1%, from
The main drivers of our sales growth in Fiscal 2014 were an 11.3% growth in the number of stores over the past fiscal year as we added 89 net new stores, going from 785 stores on
On a 52-week basis, comparable store sales increased by 3.8% for Fiscal 2014, while they increased by 6.5% in Fiscal 2013. Comparable store sales performance for Fiscal 2014 consisted of a 4.0% increase in the average transaction size partially offset by a 0.2% decrease in the number of transactions.
During Fiscal 2014, 60.5% of our sales originated from products priced higher than
The gross margin decreased to 37.1% of sales for Fiscal 2014 compared to 37.4% of sales for Fiscal 2013. This decrease was driven mainly by additional occupancy and logistics costs associated with the increased pace of new store openings in Fiscal 2014. Over the past three fiscal years, the gross margin has steadily decreased from 37.5% in Fiscal 2012 to 37.1% in Fiscal 2014. In spite of the depreciation of the Canadian dollar against the U.S. dollar, management is committed to maintaining both a compelling product offering and a gross margin in the range of 36% to 37%.
SG&A for Fiscal 2014 was
SG&A for Fiscal 2014 was 17.6% of sales, an improvement of 0.7%, compared to 18.3% of sales for Fiscal 2013. The reduction in SG&A, as a percentage of sales, is mainly a result of the Corporation's ongoing productivity initiatives, such as store labor productivity initiatives.
For Fiscal 2014, net earnings increased to
Dividend Increase
On
The Board of Directors has determined that this new level of quarterly dividend is appropriate based on
Normal Course Issuer Bid
On
As at
About
Forward-Looking Statements
Certain statements in this press release about our current and future plans, expectations and intentions, results, levels of activity, performance, goals or achievements or any other future events or developments constitute forward-looking statements. The words "may", "will", "would", "should", "could", "expects", "plans", "intends", "trends", "indications", "anticipates", "believes", "estimates", "predicts", "likely" or "potential" or the negative or other variations of these words or other comparable words or phrases, are intended to identify forward-looking statements.
Forward-looking statements are based on information currently available to us and on estimates and assumptions made by us regarding, among other things, general economic conditions and the competitive environment within the retail industry in
These factors are not intended to represent a complete list of the factors that could affect us; however, they should be considered carefully. The purpose of the forward-looking statements is to provide the reader with a description of management's expectations regarding the Corporation's financial performance and may not be appropriate for other purposes; readers should not place undue reliance on forward-looking statements made herein. Furthermore, unless otherwise stated, the forward-looking statements contained in this press release are made as at
Selected Consolidated Financial Information
Period Ended | Year Ended | |||||||
13-Weeks | 14-Weeks | 52-Weeks | 53-Weeks | |||||
(dollars and shares in thousands, except per share amounts) | 2014 |
2013 |
2014 |
2013 |
||||
$ | $ | $ | $ | |||||
Earnings Data | ||||||||
Sales | 582,285 | 561,879 | 2,064,676 | 1,858,818 | ||||
Cost of sales | 358,896 | 344,535 | 1,299,092 | 1,163,979 | ||||
Gross profit | 223,389 | 217,344 | 765,584 | 694,839 | ||||
SG&A | 92,706 | 98,233 | 363,182 | 339,662 | ||||
Depreciation and amortization | 13,108 | 10,806 | 47,898 | 39,284 | ||||
Operating income | 117,575 | 108,305 | 354,504 | 315,893 | ||||
Net financing costs | 3,989 | 2,694 | 11,673 | 10,839 | ||||
Earnings before income taxes | 113,586 | 105,611 | 342,831 | 305,054 | ||||
Provision for income taxes | 30,601 | 28,481 | 92,737 | 84,069 | ||||
Net earnings | 82,985 | 77,130 | 250,094 | 220,985 | ||||
Basic net earnings per common share | ||||||||
Diluted net earnings per common share | ||||||||
Weighted average number of common shares outstanding during the period: | ||||||||
Basic | 70,483 | 73,402 | 71,838 | 73,660 | ||||
Diluted | 70,744 | 73,809 | 72,046 | 75,190 | ||||
Other Data | ||||||||
Year-over-year sales growth | 3.6% | 19.9% | 11.1% | 16.0% | ||||
Comparable store sales growth (2) | 1.1% | 4.6% | 3.8% | 6.5% | ||||
Gross margin (3) | 38.4% | 38.7% | 37.1% | 37.4% | ||||
SG&A as a % of sales (3) | 15.9% | 17.5% | 17.6% | 18.3% | ||||
EBITDA(1) | 130,683 | 119,111 | 402,402 | 355,177 | ||||
Operating margin (3) | 20.2% | 19.3% | 17.2% | 17.0% | ||||
Capital expenditures | 21,747 | 17,094 | 96,303 | 69,577 | ||||
Number of stores (4) | 874 | 785 | 874 | 785 | ||||
Average store size (gross square feet) (4) | 9,918 | 9,942 | 9,918 | 9,942 | ||||
Declared dividends per common share | ||||||||
As at | ||||||||
2014 |
2013 |
|||||||
$ | $ | |||||||
Statement of Financial Position Data | ||||||||
Cash and cash equivalents | 71,470 | 52,566 | ||||||
Merchandise inventories | 364,680 | 338,385 | ||||||
Property and equipment | 250,612 | 197,494 | ||||||
Total assets | 1,566,780 | 1,453,692 | ||||||
Total debt (1) | 403,017 | 264,420 | ||||||
Net debt (1) | 331,547 | 211,854 |
(1) | In this press release, EBITDA, EBITDA margin, total debt and net debt are referred to as "non-GAAP measures". Non-GAAP measures are not generally accepted measures under GAAP and do not have a standardized meaning under GAAP. EBITDA, EBITDA margin, total debt and net debt are reconciled below. The non-GAAP measures, as calculated by the Corporation, may not be comparable to those of other issuers and should be considered as a supplement to, not a substitute for, or superior to, the comparable measures calculated in accordance with GAAP. |
We have included non-GAAP measures to provide investors with supplemental measures of our operating and financial performance. We believe that non-GAAP measures are important supplemental metrics of operating and financial performance because they eliminate items that have less bearing on our operating and financial performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on GAAP measures. We also believe that securities analysts, investors and other interested parties frequently use non-GAAP measures in the evaluation of issuers, many of which present non-GAAP measures when reporting their results. Our management also uses non-GAAP measures in order to facilitate operating and financial performance comparisons from period to period, to prepare annual budgets, and to assess our ability to meet our future debt service, capital expenditure and working capital requirements. |
Period Ended | Year Ended | |||||||
13-weeks</b> | 14-weeks | 52-weeks | 53-weeks | |||||
(dollars in thousands) | 2014 |
2013 |
2014 |
2013 |
||||
$ | $ | $ | $ | |||||
A reconciliation of operating income to EBITDA is included below: | ||||||||
Operating income | 117,575 | 108,305 | 354,504 | 315,893 | ||||
Add: Depreciation and amortization | 13,108 | 10,806 | 47,898 | 39,284 | ||||
EBITDA | 130,683 | 119,111 | 402,402 | 355,177 | ||||
EBITDA margin (3) | 22.4% | 21.2% | 19.5% | 19.1% | ||||
As at | ||||||||
(dollars in thousands) | 2014 |
2013 |
||||||
$ | $ | |||||||
A reconciliation of long-term debt to total debt is included below: | ||||||||
Long-term debt | 398,463 | 262,071 | ||||||
Debt issue costs | 4,554 | 2,349 | ||||||
Total debt | 403,017 | 264,420 | ||||||
A reconciliation of total debt to net debt is included below: | ||||||||
Total debt | 403,017 | 264,420 | ||||||
Cash and cash equivalents | (71,470) | (52,566) | ||||||
Net debt | 331,547 | 211,854 |
(2) | Comparable store sales represents sales of stores, including relocated and expanded stores, open for at least 13 complete fiscal months relative to the same period in the prior year. For purposes of calculating comparable store sales, the Corporation excluded the 53rd week of Fiscal 2013. |
(3) | Gross margin represents gross profit divided by sales. SG&A as a % of sales represents SG&A divided by sales. Operating margin represents operating income divided by sales. EBITDA margin represents EBITDA divided by sales. |
(4) | At the end of the period. |
SOURCE
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