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
: On the slight decrease in product margins that you've noted this quarter and in prior quarters, should we think about the only way to eliminate
that slight decrease in product margins is if inflation comes back to the market? And if it doesn't, then that slight decrease in product margin
pressure will continue?
Question: Vishal Shreedhar - National Bank Financial, Inc., Research Division - Analyst
: Okay. Okay. So moving on to the SG&A. So thank you for helping us understand that a big part of the SG&A was due to some -- the increases due
to timing shift. But you had indicated that even without that timing shift, SG&A would have still been up year-over-year. Just wondering if the
efficiency initiatives that Dollarama has been imprinting over the last few years, and I know they're not as big as they used be, is that effectively
behind us and now we should think of SG&A -- Dollarama not being able to lever SG&A outside of these calendar shifts?
Question: Vishal Shreedhar - National Bank Financial, Inc., Research Division - Analyst
: Okay. And just on the third-party valuation for Dollarcity. Obviously, it came in a little bit higher than what management anticipates to pay for the
business. But still, I guess in that 5x EBITDA range, which is considerably lower than the trading valuation for Dollarama's core business, I'm just
wondering if management was surprised that those valuations came in so close and if there's any details or parameters you can provide on that
third-party valuation given that we can't see Dollarcity details.
Question: Peter Sklar - BMO Capital Markets Equity Research - Analyst
: I just have one question for Neil. Neil, you and Michael are always referring to your merchandising initiatives and the impact that's having on traffic
and basket, et cetera, margin. Can you talk -- and Michael has used the expression assortment management, which is kind of a hit -- a hint, but can
you elaborate a little bit more what some of these initiatives are? Is it just normal blocking and tackling that your buyers and/or merchants are
executing every day?
Question: Peter Sklar - BMO Capital Markets Equity Research - Analyst
: Okay. And are your buyers also your merchants?
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