Dollarama Q1 revenue, profit up from year ago

MONTREAL — Dollarama says it can absorb planned minimum wage increases across the country, but the retailer won’t rule out raising prices if labour costs continue to climb.

Chief executive Neil Rossy said the Montreal-based retailer won’t start by hiking prices in response to wages rising in provinces accounting for more than 60 per cent of its sales.

However, he said that could change if labour costs and the cost of goods rise further over time.

“Our only concern in all that is that we sit in the same position as every other retailer and every other merchant out there,” he told reporters after the annual meeting.

“As long as the rules — in this case the minimum wage — affect everybody, then our only goal and our only focus is that we remain competitive within the retail landscape that we live.”

Ontario has announced plans to raise its minimum wage to $14 from $11.40 per hour on Jan. 1, and to $15 a year later. British Columbia, Alberta and Newfoundland and Labrador are also raising their rates beginning this fall. Alberta will reach $15 by October 2018.

Dollarama said it has initiatives in place to address wage inflation including plans to bring in more higher-margin products. Cost savings are also expected to come in stores through improved recycling, energy efficiency and theft control.

Chief financial officer Michael Ross said the challenge is no different than when it faced a drop in the value of the Canadian dollar, an increase in the cost of goods in China and higher energy costs.

While Dollarama (TSX:DOL) says many of its employees earn just above the minimum wage, the provincial increases will also prompt cascading wage increases for other employees.

The increase in the minimum wage comes as Dollarama reports growing revenues and profits.

Dollarama reported Wednesday a profit of $94.7 million or 82 cents per share in the first quarter ended April 30. That was up from $83.2 million, or 68 cents per share a year ago. Sales rose 10 per cent to $704.9 million.

An increase in the average transaction value drove an increase in comparable sales growth, which was 4.6 per cent, but that was offset in part by a decline in the number of transactions relative to the same time last year.

The company told shareholders that it is studying the success of Dollar City before deciding in early 2020 whether to exercise its option to take a majority ownership stake in the chain of 79 stores in Central America.

Just Posted

Mothers Against Drunk Driving hold candlelight vigil

Four-and-a-half years ago Marilyn Rinas’ husband was killed in a collision with… Continue reading

Thousands expected at memorial for fallen police officer in Abbotsford, B.C.

ABBOTSFORD, B.C. — The streets of Abbotsford, B.C., will be lined with… Continue reading

One person dead, five others injured in early-morning crash in Kingston, Ont.

KINGSTON, Ont. — A man who was checking the damage on his… Continue reading

Gus is a special, collaborative art exhibit inspired by motherhood

The portrait display by mother and son is showing in Red Deer

Robotics challenge sparks student interest in Red Deer

Student-built robots compete in fun challenge

Chicken crosses B.C. road, stops traffic

Rooster makes early morning commuters wait in Maple Ridge

Red Deerian honours her brother who died in a motorcycle collision

Houaida Haddad is encouraging Red Deer residents to donate blood

Red Deer County firefighters to be recognized for Waterton help

RCMP brass will give formal recognition Monday

Ron James tries to lighten humanity’s load through humour

The comedian returns to Red Deer for shows Dec. 1 and 2

100+ Women Red Deer donate to Christmas Bureau

About $14,000 will help with Christmas hampers and toys

Semi collides with vehicle on Highway 2 north of Ponoka

Members of the Ponoka Integrated Traffic Unit dealt with a call on Highway 2 north of Ponoka

After 70 years, Red Deer veteran still remembers his traumatic war experience

Frank Krepps feels lucky to have survived the Second World War

Merritt Mountie charged with assault

Charges are in relation to an incident in May at the detachment, B.C. Prosecution Service said

Most Read

Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month