The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Vishal Shreedhar - National Bank Financial, Inc., Research Division - Analyst
: I guess this question is maybe a little bit more difficult to answer, and maybe you've already alluded to it. But as you're reflecting on what the
consumer is telling you during this period of time, obviously, the consumer is coming to Dollarama in that period of, call it, a distress. Are there any
signals that your hearing -- messages that you're hearing from the consumer that will cause you to change the way you're doing things, maybe a
little bit longer term.
For example, the consumers are coming to Dollarama, obviously, pressured and they're buying a lot in the basket, maybe that's causing you to
reflect on maybe we need the price points higher so we can offer consumers more or the types of merchandise that you offer or your e-commerce
offer, any of those types of initiatives?
Question: Vishal Shreedhar - National Bank Financial, Inc., Research Division - Analyst
: Okay. And just a few other quick ones here. In terms of -- there's so many new costs coming into the system, and they're hitting not only Dollarama
but your colleagues and peers as well. And I know you're trying to maintain certain price points for your consumers, but in the more discretionary
items, are you seeing inflation in the market yet?
Question: Vishal Shreedhar - National Bank Financial, Inc., Research Division - Analyst
: Okay. And on the hero pay, some retailers have started to scale back those initiatives. I know you've given us a time line for that first tranche of
hero pay, the extended compensation there. Any thoughts on how Dollarama's thinking about that?
Question: Vishal Shreedhar - National Bank Financial, Inc., Research Division - Analyst
: Okay. And moving on here a little bit more technical. The inventories were down a bit year-over-year. I know last quarter, I think last quarter, it was
commented that some inventory items were already in motion, and there wasn't much ability to control the inventory, at least if I recollect right.
Just wondering if the inventories were down because there was some managing of working cap? Or were there other factors at play?
Question: Vishal Shreedhar - National Bank Financial, Inc., Research Division - Analyst
:
Question: Vishal Shreedhar - National Bank Financial, Inc., Research Division - Analyst
: But the -- and just moving on, the last one here was on dividends. I know a Board decision, obviously, management is encouraged with trends in
Q2, and cash flow still seems to be strong. So I guess, if you had to put on -- good to put on the head of the Board, what do they need to see to get
this dividend going again in your view and the buyback for that matter?
Question: Peter Sklar - BMO Capital Markets Equity Research - Analyst
: Neil, I just wanted to clarify your comments. So on the 10% wage premium that you've put in place, are you saying that you don't have a view yet
on the time line when that may come off?
Question: Peter Sklar - BMO Capital Markets Equity Research - Analyst
: Okay. The other thing I wanted to ask you and Michael about is on your gross margin, which was down about 80 basis points during the quarter,
which I thought was a good performance given the real category shift you would have had into consumables. So I'm just wondering if you had
any further comments about the gross margin beyond what you've said already, anything that could have positively impacted it. Or any other color
you could put on that?
Question: Peter Sklar - BMO Capital Markets Equity Research - Analyst
: Okay. And Michael, the last thing I wanted to ask you, you know how like every once in a while, I don't know if it's every year or every 2 years, use
that consulting firm who kind of does an economic demographic study by all the submarkets across Canada, and you come up with a view on store
count. When is your next update for potential store count for Dollarama in Canada?
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affiliated companies.
JUNE 10, 2020 / 3:30PM, DOL.TO - Q1 2021 Dollarama Inc Earnings Call
Question: Patricia A. Baker - Scotiabank Global Banking and Markets, Research Division - Analyst
: Neil, in your opening remarks, you did talk about the fact that you had a strong online sales, and that's not surprising. But I'd be really curious to
hear which categories or which products did you see demand for in the bulk sell?
Question: Patricia A. Baker - Scotiabank Global Banking and Markets, Research Division - Analyst
: Okay. Interesting. And then, Michael, I don't know if you'll answer this, but just on that question of store growth in 2020. Can you talk about how
many projects are currently in the second quarter are currently still under construction?
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affiliated companies.
JUNE 10, 2020 / 3:30PM, DOL.TO - Q1 2021 Dollarama Inc Earnings Call
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