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: George Doumet - Scotiabank Global Banking and Markets, Research Division - Analyst
: J.P., can you help us with the gross margin performance in the quarter, the extent of the negative mix impacts, maybe the lower product and freight
costs? And maybe how should we think of the cadence of the improvement as the year goes on?
Question: George Doumet - Scotiabank Global Banking and Markets, Research Division - Analyst
: Okay. And Neil, can you maybe just help us think about maybe the second half of the year in terms of the consumable volumes? To what extent
maybe do you expect them to grow? And consumables have been kind of steadily growing since 2010, I guess, in good and bad times. So if you
were to look at the business 5 years out, can this category be 50%, 55%, any color you can provide there?
Question: George Doumet - Scotiabank Global Banking and Markets, Research Division - Analyst
: Okay. So last one from me on Dollarcity, the contribution margin came in a little bit higher than expectations. Can you maybe talk a little bit about
the margins of that business, how they performed year-over-year? Any color maybe that you can help us understand what drove that delta?
Question: Vishal Shreedhar - National Bank Financial, Inc., Research Division - Analyst
: It's been addressed several times on the call about the possible upward pressure on same-store sales guidance. Wondering if similar comments
would apply to gross margin rate just given we're seeing a bit of -- Neil mentioned a bit of slowdown in consumables, continued strength in
seasonal, possibly favorable operating leverage and all these factors seem to conspire favorably on gross margin, hoping to get some perspective
there?
Question: Vishal Shreedhar - National Bank Financial, Inc., Research Division - Analyst
: Okay. Moving on to the buyback. I know you've talked about it off the top and I may have missed it, but I think you said you're looking to renew
that buyback activity. But what was the decision behind pausing the buyback? And I think last quarter, management stated he was looking to run
leverage a little bit lower than the threshold levels. And are you happy with where your leverage is right now? And what level should an investor
look for Dollarama to target throughout this fiscal year?
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JUNE 07, 2023 / 3:00PM, DOL.TO - Q1 2024 Dollarama Inc Earnings Call
Question: Vishal Shreedhar - National Bank Financial, Inc., Research Division - Analyst
: Okay. And last quarter, you can correct me if I'm wrong, but I recall you saying we're looking to leverage levels a little bit lower in part due to
economic uncertainty. Does that thinking still prevail? And if so, what leverage should we -- and I know you just gave me some caveats there, but
is there any level -- appropriate level lower that you would consider as responsible given your concerns about the backdrop?
Question: Vishal Shreedhar - National Bank Financial, Inc., Research Division - Analyst
: Okay. And maybe just one last question here regarding the transaction growth continues and augmenting the strong basket as well. I'm just
wondering in that transaction growth, is that predominantly your existing customers shopping more with Dollarama? Or is it you're gaining new
customers? Is there any SKU one way or another that you would call out?
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