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

WATCH: From humble beginnings Red Deer-based wrestling promotion is growing

It wasn’t that long ago that Dylon Featherstone and the Canadian Wrestling… Continue reading

WATCH: Families make yo-yos and weaved yarn at Red Deer Museum and Art Gallery

It was all about making yo-yos and yarn bombing at Red Deer… Continue reading

Solve mysteries with Sherlock Holmes and Dr. Watson in Red Deer

At three sold-out one act Sherlock Holmes plays in Red Deer, theatre… Continue reading

Quebec man arrested in slaying of Alberta woman 16 years ago

AIRDRIE, Alta. — A Quebec man has been arrested in the slaying… Continue reading

Construction underway at Medicine River Wildlife Centre in Red Deer

The new building is twice the size of the old one

WATCH Replay Red Deer Feb. 18: Your weekly news highlights

Watch news from Red Deer and Central Alberta

How to keep local news visible in your Facebook feed

Facebook has changed the news feed to emphasize personal connections. You might see less news.

Liberals looking at creating use-it-or-lose-it leave for fathers, Trudeau says

OTTAWA — Prime Minister Justin Trudeau is raising the idea of creating… Continue reading

Trump gets angry about election meddling, but not at Russia

‘Weirdest thing’: Trump expresses anger, but not over Russian election-meddling

New doping charge could hurt Russia’s chance at reinstatement

Russia could lose its chance to be reinstated before the end of the Winter Olympics because of a doping charge against curling bronze medallist Alexander Krushelnitsky.

#Metoo movement causing confusion in many men, fear of missteps with women: experts

Being painted by the same sweeping brush as those alleged to have mistreated women has angered men

Virtue and Moir break their own world record

Virtue and Moir break short dance record to sit first in ice dance at Olympics

Calgary man dies in Mexico following sudden illness

Troy Black was with his wife, Lindsay, in Puerto Vallarta when he began vomiting blood on Thursday

Life or death main decision for school shooting suspect

FORT LAUDERDALE, Fla. — The evidence against the Florida school shooting suspect… Continue reading

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