Dollarama Inc Q2 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: George Doumet - Scotiabank Global Banking and Markets, Research Division - Analyst : Congrats on a strong quarter and J.P., just want to wish you continued success at your future role. Just want to get started, maybe Neil, you mentioned product refreshes. Can you talk a little bit about any themes there? And how should we think of maybe that quantum versus historically how it's been?

Question: George Doumet - Scotiabank Global Banking and Markets, Research Division - Analyst : Okay. And based on the midpoint of the guidance, it looks like you guys are looking for 80-ish basis points of expansion in gross margins in the second half. How should we maybe think of the cadence between Q3 and Q4? And is the lower versus the upper end just predicated on kind of where consumers -- sorry, consumables land for the year or maybe other factors in there to consider? Jean-Philippe Towner Well, as we said since the beginning of the year, we think that second half gross margin is going to be stronger than first half in terms of the year-over-year improvement and then the question is really a question of mix, George, depending on what we see on the mix side in terms of general merchandise versus consumables versus seasonal, which we can't predict. But so far, what we're seeing is a well-balanced mix, as I mentioned and Neil mentioned, between our 3 main product categories.

Question: Vishal Shreedhar - National Bank Financial, Inc., Research Division - Analyst : And best of luck, J.P. and congrats on the quarter. Regarding shrink, what are you seeing? And how do you expect that to unfold over the quarters ahead? Do you expect that to become an increase of pressure? Or is it largely stable? Jean-Philippe Towner No, I think it's largely stable. We've completed the vast majority of our accounts. And so we're -- I would say, in the gross margin comment that I made earlier, the shrink trends are included in there. And so we're comfortable with the shrink position that we have. The reality is it's gotten worse over the past 12 to 18 months, but we knew it going in the year. So we were able to factor it in our guidance.

Question: Luke Hannan - Canaccord Genuity Corp., Research Division - Analyst : Thanks. J.P., maybe one for you. I may have missed this in the discussion earlier. But as far as the mix assumption for H2, is the assumption that demand remains well balanced for the rest of the year? Or I seem to remember on a prior call, you had mentioned that there was a view that potentially mix could continue to normalize towards general merchandise and seasonal products. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 13, 2023 / 2:30PM, DOL.TO - Q2 2024 Dollarama Inc Earnings Call Jean-Philippe Towner I mean as we mentioned, I think, so far and unfortunately, I can't predict the future. But so far, the -- what we're seeing is a well-balanced mix. I wouldn't say there's a major shift from consumable to general merchandise or to seasonal. We're continuing to see all the categories performing strongly, and we're pleased with the results.