Dollarama announces employee bonus and increases dividend

0
77


MONTREAL – Dollarama Inc. has said it will pay employees a premium for their work during the pandemic as it increased its dividend and reported higher third-quarter earnings that exceeded analysts’ expectations.
The discount chain was criticized earlier this year by employees and their supporters who demanded that Dollarama adopt greater sanitary precautions in its warehouses and extend the pay rise it offered to employees at the start of the pandemic.

“I want to thank our people for their efforts and dedication as the pandemic has become our new reality and COVID-19 security measures are now part of our daily operating procedures,” Dollarama Chief Executive Officer said on Wednesday. , Neil Rossy.

As part of this year’s bonus program, full-time employees will receive $ 300, while part-time workers will receive $ 200.

The one-off payment comes as the retailer raised its quarterly dividend to 4.7 cents per share, from 4.4 cents.

In March, Dollarama extended salary increases for its store and warehouse workers, but ended the pandemic payroll program in August, a month and a half later than expected. Dollarama said in September that the salary increase cost the company about $ 11 million in the second quarter.

During a demonstration in August to protest the end of the pay rise, Dollarama employees described inconsistent compliance with health measures at company facilities and said it was not possible to maintain a physical distance inside its warehouses.

Discount stores such as Dollarama have performed well during the pandemic as consumers spend less on discretionary items but continue to purchase essential food and household items.

During a call with analysts on Wednesday, Rossy said Dollarama’s third-quarter performance was driven by strong demand for seasonal products such as Halloween items.

Rossy added that sales of seasonal items, especially over the next two weeks of holiday shopping, will be critical to the company’s fourth quarter results.

Yet, with an increase in virus cases resulting in further restrictions in Canada, Dollarama executives have warned that government measures restricting store capacity could hurt the company’s sales even though it has been seen as a essential service in Ontario and Quebec.

Dollarama earned $ 161.9 million or 52 cents per diluted share for the quarter ended Nov. 1, compared to $ 138.6 million or 44 cents per diluted share in the same quarter last year.

Sales totaled $ 1.06 billion, up from $ 947.6 million in the same quarter last year as shoppers reduced the frequency of in-store visits but bought more when they visited stores.

Comparable store sales increased 7.1%, with the number of transactions down 15.2%, but the average transaction size soared 26.3%.

Analysts on the earnings call asked about the potential for Dollarama to expand its merchandise to cover higher prices, such as $ 4.50 and $ 5, but Rossy said the company was not ready to offer products at these prices at the moment.

However, Rossy noted that the costs of raw materials and freight are rising, which could force Dollarama to increase the prices of certain products to maintain its margins.

Dollarama plans to open between 60 and 65 net new stores before the end of 2020, Rossy said.

LEAVE A REPLY

Please enter your comment!
Please enter your name here