MONTREAL - Dollarama Group, Canada's largest operator of discount stores, reported solid net profits in the fiscal 2010 second quarter ended Aug. 2 of $25.7 million, down from $26 million for the same period a year earlier.
Sales jumped nearly 15 per cent to $303.4 million from $264.3 million as consumers sought to spend on cheaper goods because of the recession.
The retailer said Thursday it ended the second quarter with $103.4 million in cash, nearly double the $54.8 million for the same period last year, largely because of increased profits and working capital management.
`We are pleased to announce another strong quarter of financial performance, including an increase in comparable store sales and adjusted EBITDA, despite some continued sluggishness in consumer spending in Canada," said Larry Rossy, Dollarama's chief executive.
`During the second quarter, we continued to roll out our multi-price product assortment, which is being well received by customers. We believe the positive response is evident in the increase in average transaction size and traffic we experienced in most of our stores. Our efforts to increase productivity in our distribution centre and warehouses are delivering results, and we continue to implement additional initiatives in logistics, store operations, warehouse performance, transportation efficiency, loss prevention and associate training."
Dollarama is the biggest operator of discount retail stores in Canada, with 585 outlets that sell a variety of merchandise at $2 and below.