Dollarama Inc Q3 2021 Earnings Call Transcript

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

Question: Peter Sklar - BMO Capital Markets Equity Research - Analyst : Michael, you've talked in the past how -- like you look at other retailers that you consider to be your competitors, and you won't take price unless they're taking price because you want to maintain your competitive position. So over the last number of quarters, that's been one of the topics that Dollarama has not been taking in-store price increases. Has that situation changed at all or is it the same? Are you able to put through some price? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 09, 2020 / 3:30PM, DOL.TO - Q3 2021 Dollarama Inc Earnings Call

Question: Peter Sklar - BMO Capital Markets Equity Research - Analyst : And who do you consider to be your competitive backdrop? Is it still Walmart [drugstores]? Is that the universe you look at?

Question: Peter Sklar - BMO Capital Markets Equity Research - Analyst : Okay, and Neil, like I believe that your buyers traditionally go to China, that's where you source the majority of your products. So how does that work in COVID? Are your buyers still able to go or do they just buy off of catalogs from Canada? How has COVID impacted your ability to procure?

Question: Peter Sklar - BMO Capital Markets Equity Research - Analyst : Okay. And then just one final question. When you talked about the consumer survey. I believe the point you are making is that consumers are increasingly value convenience. I assume that means convenience of store location, how close the stores to them and does have parking access, that kind of thing. So I'm just wondering, in that context, what -- has that changed your thinking at all about your aspirational targets for the number of stores Dollarama could have in Canada, I believe, officially, based on some consultants you use, you're at 1,700 store count as your aspiration in Canada. But I'm just wondering, Neil, if your feelings have changed about that.

Question: Vishal Shreedhar - National Bank Financial, Inc., Research Division - Analyst : I was hoping to give this question aside in terms of perspective on mall performance and non-mall performance or maybe even traffic that you're able to provide any color on that?

Question: Vishal Shreedhar - National Bank Financial, Inc., Research Division - Analyst : Okay. Are there any numbers you can provide? Are the mall stores positive in terms of comp or...

Question: Vishal Shreedhar - National Bank Financial, Inc., Research Division - Analyst : Okay. And in terms of momentum through the quarter, obviously, the traffic trends improved. Should we also read that to suggest that the overall same-store improved through the quarter?

Question: Vishal Shreedhar - National Bank Financial, Inc., Research Division - Analyst : Sorry, same-store sales growth, did that improve as well through the quarter?

Question: Vishal Shreedhar - National Bank Financial, Inc., Research Division - Analyst : Okay. And with respect to the elevated seasonal sales and the benefit on gross margin rates, obviously, next year, Dollarama will lap, hopefully, this unusual COVID situation at this time. And I was hoping to if -- maybe get a little perspective on to what degree the gross margin rates were elevated by -- elevated seasonal sales, is that something that you can shed some light on?

Question: Vishal Shreedhar - National Bank Financial, Inc., Research Division - Analyst : Okay. And maybe another tough one here. In terms -- a similar question on SG&A, less packaway, less labor-related to transactions, some of these items appear to be perhaps a bit transient. Is there any way -- any color you can give us to help identify that kind of transient impact on SG&A and make the benefit there?

Question: Patricia A. Baker - Scotiabank Global Banking and Markets, Research Division - Analyst : Michael, I want to follow-up with your discussion on the self checkouts. You said that at the end of Q3, you have 175 stores by year-end, you'll have them in 200 stores. And I'm just curious if you could provide us with some sort of indication with that group of 200 stores, what the average revenue gap is between them and your -- the average revenue of the fleet, just some degree of magnitude? And then secondly, with respect to the remaining stores in the network, I'm presuming that there are other stores that also are high-traffic stores and do large revenue that will benefit maybe in the future from having self-checkouts and will be able to see operating efficiencies in those particular stores and also look like they will provide a good payback, is that fair?

Question: Patricia A. Baker - Scotiabank Global Banking and Markets, Research Division - Analyst : Okay. Fair enough. And I'm just going to ask the first part in a -- slightly different way. I am right in assuming that those 200 stores actually do higher revenues than the average revenue per store of the entire fleet?

Question: Patricia A. Baker - Scotiabank Global Banking and Markets, Research Division - Analyst : Okay. Excellent, okay, perfect, sorry, I could have asked it better.