Canadian discount retailer Dollarama (DOL) has raised the quarterly dividend it pays to shareholders by nearly 30% following strong earnings results.
The Montreal-based company announced that, going forward, it will pay a dividend of 7.08 cents per share, up 28% from 5.53 cents per share previously.
The dividend hike comes as Dollarama reported strong fiscal fourth quarter 2022 financial results. The company’s same-store sales rose 15.9% in Q4 compared with the same period a year earlier.
Dollarama’s sales grew as Canadians struggle with the highest inflation rate in four decades, prompting many consumers to shop at lower priced discount stores.
As a result, Dollarama has increased the cleaning supplies and kitchen products it sells, along with personal care items, groceries, and clothing.
The company’s total sales for fiscal Q4 came in at $1.47 billion, up 20% from $1.22 billion in the same period of 2021.
The higher sales led to an increase in Dollarama’s Q4 profit, which was $261 million, up 19% from $220 million a year earlier.
The company said it earned 91 cents per share in Q4, up from 74 cents per share a year earlier.
Looking ahead, Dollarama said it expects 60 to 70 new store openings and comparable store sales growth of 5% to 6% this year. Gross margins of 43.5% to 44.5% are also expected.
Dollarama’s stock has risen 13% in the last 12 months to trade at $80.47 per share.
