Dollarama Inc. (DOL.TO), Friday reported an increase in profit for the fourth quarter, as sales grew 20 percent. The company also boosted its dividend by 27 percent.
Montreal, Canada-based Dollarama's fourth-quarter profit improved to C$77.1 million or C$1.04 per share from C$63.6 million or C$0.84 per share last year.
On an adjusted basis, earnings rose to C$1.06 per share from C$0.84 per share last year. Analysts polled by Thomson Reuters expected earnings of C$1.02 per share for the quarter. Analysts' estimates typically exclude one-time items.
Dollarama, which retails products that cost three dollars or less, said its sales for the quarter grew 19.9 percent to C$561.9 million from C$468.7 million last year. Analysts estimated revenues of C$546.7 million for the quarter.
The quarter included fourteen weeks, compared to 13 last year. The extra week chipped in $32.1 million to total sales. Comparable store sales, or sales in stores open at least a year, increased 4.6 percent for the fourth quarter as compared to an increase of 7.9 percent last year.
Revenue growth were also boosted by sales of more products priced higher than one dollar. For the fourth quarter, 56 percent of sales originated from products priced higher than $1.00 compared to 50 percent last year.
The company added 81 net new stores in past twelve months, which helped revenue growth by 11.5 percent. As of February 3, 2013, Dollarama operated 785 stores.
Commenting on the results, Chief Executive Larry Rossy said, "Our focus on execution at all levels has translated into continued double-digit growth in sales, operating income and net earnings."
Gross margin dropped to 38.7 percent from 39.8 percent last year, due to increase in occupancy, warehousing, distribution and transportation costs related to new store openings.
Dollarama increased its quarterly dividend by 27 percent to C$0.14 per share from from C$0.11 per share, payable on May 7 to shareholders as of April 30.
DOL is currently trading at $67.85, up $3.21 or 4.97%, on the Toronto Stock Exchange.
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