Dollarama Inc.(DLMAF) 首席执行官 Neil Rossy 在 2020年 第一季度业绩 - 收益电话会议记录
Dollarama Inc. (OTC:DLMAF) Q1 2020 Earnings Conference Call June 13, 2019 11:30 AM ET
Neil Rossy - President and Chief Executive Officer
Michael Ross - Chief Financial Officer
Neil Rossy - 总裁兼首席执行官
迈克尔罗斯 - 首席财务官
Irene Nattel - RBC Capital Markets
Patricia Baker - Scotiabank
Kenric Tyghe - Raymond James
Jim Durran - Barclays
Peter Sklar - BMO Capital Markets
Mark Petrie - CIBC
Brian Morrison - TD Securities
Derek Dley - Canaccord Genuity
Vishal Shreedhar - National Bank
Keith Howlett - Desjardins Securities
Edward Kelly - Wells Fargo
- Irene Nattel - 加拿大皇家银行资本市场
- Patricia Baker - Scotiabank
- Kenric Tyghe - Raymond James
- 吉姆杜兰 - 巴克莱
- Peter Sklar - BMO资本市场
- Mark Petrie - CIBC
- 布莱恩莫里森 - 道明证券
- Derek Dley - Canaccord Genuity
- Vishal Shreedhar - 国家银行
- Keith Howlett - Desjardins证券
- 爱德华凯利 - 富国银行
Good morning, and welcome to the Dollarama, Fiscal 2020 First Quarter Results Conference Call. Neil Rossy, President and CEO; and Michael Ross, CFO will make a short presentation, which will be followed by a question-and-answer period, opened exclusively to financial analysts.
The Press Release, Financial Statements and management's discussion and analysis are available at dollarama.com in the Investor Relations section, as well as on SEDAR.
Before we start, I have been asked by Dollarama to read the following message regarding forward-looking statements. Dollarama's remarks today may contain forward-looking statements about its current and future plans, expectations, intentions, results, levels of activity, performance, goals or achievements or any other future events or developments.
Forward-looking statements are based on information currently available to management and on estimates and assumptions made based on factors that management believe are appropriate and reasonable in the circumstances. However, there can be no assurance that such estimates and assumptions will prove to be correct.
Many factors could cause actual results, levels of activity, performance, achievements, future events or developments to differ materially from those expressed or implied by the forward-looking statements.
As a result, Dollarama cannot guarantee that any forward-looking statements will materialize and you are cautioned not to place undue reliance on these forward-looking statements. For additional information on the assumptions and risks, please consult the cautionary statements regarding forward-looking information contained in Dollarama's MD&A dated June 13, 2019, available on SEDAR.
Forward-looking statements represent management's expectations as of June 13, 2019, and except as maybe required by law, Dollarama has no intention and undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
I would now like to turn the call over to Neil Rossy.
早上好，欢迎来到Dollarama，2020财年第一季度业绩电话会议。 Neil Rossy，总裁兼首席执行官;首席财务官迈克尔·罗斯（Michael Ross）将做一个简短的演讲，然后是专门针对金融分析师的问答环节。
Thank you, operator, and good morning everyone.
Fiscal 2020 is off to a good start for Dollarama with strong top-line growth fueled by store openings and solid comparable store sales combined with the efficient management of our operations. These factors contributed to a 6.5% increase in diluted net earnings per share year-over-year.
We recorded comparable store sales growth of 5.8% in Q1, which includes a notable increase in unit per basket and store traffic. This was achieved thanks to a strong consumer response to our value proposition. Successful category management and merchandising tactics and the popularity of our Easter product offering among other factors.
Gross margin came in lower than last year at 42.1% of sales due to a slight decrease in product margins, higher sales of lower margin item and the timing of certain logistics costs. Keep in mind that we continue to operate in a low inflation environment in which retailers are more reluctant to pass on cost to consumers.
On the operational front, we opened a 11 net new stores in Q1 compared to 10 in Q1 last year. Total store count rose to 1236, our store pipeline is strong and we are on track to meet our target of 66 to 70 net new stores in fiscal 2020.
Our distribution center expansion project is also proceeding well and now entering its final phase on time and on budget. The final phase consists of the integration of the new building extension with the existing facility and the installation of equipment such as conveyors. This work is ongoing and will continue over the coming months.
We expect to be fully operational before the end of the current calendar year. Once completed, our expanded distribution center will enable us to very comfortably support our long-term growth plans to 1700 stores by 2027.
Looking now at Dollar City in Latin America. They opened a 11 net new stores in their first quarter ended March 31, 2019, bringing their total number of stores to 180 with 82 in Colombia, 44 El Salvador and 54 in Guatemala. As a reminder, we provide sourcing services and business expertise to Dollar City while they own and operate the chain. We have an option to acquire a 50.1% interest in the business starting in 2020.
Michael over to you.
Thank you, Neil and good morning everyone.
So before I dive into our performance this quarter a quick note on a significant accounting change. Several of our key financial metrics including gross margin, EBITDA and EBITDA margin have been impacted by the new lease Accounting Standards IFRS 16 that came into effect on February 4, 2019. Prior year financial information has been restated to reflect IFRS 16 on a consistent basis. As a result of this new standard most occupancy costs related to lease properties are no longer expense in the gross margin as they are recorded on the balance sheet as a right of use asset offset by a lease liability. The asset is depreciated on a straight line basis or the term of the lease, while the liability accrues at a discounted interest expense and is reduced as we make lease payments over the remaining term of the lease.
With that in mind, let's take a look at the results for the first quarter of fiscal 2020 in more detail which were driven once again by a strong performance across our key financial metrics. Sales were up 9.5% to over $828 million and same-store sales increased by 5.8%. Neil provided some color and what drove this strong performance.
We also continued to see an increase in the penetration of payment by plastic versus cash as the credit card penetration rate continues to increase 2 years after the chain wide acceptance of this payment method. Gross margins stood at 42.1% of sales, lower gross margin year-over-year is attributable to a slight decrease in product margin, higher sales of lower margin items and the impact of certain logistics costs associated with the temporary inefficiencies at our distribution center. The impact of these logistics costs will be felt throughout the year and have been factored into our full year gross margin guidance range.
On the other hand, we expect gross margin to be positively impacted by merchandising and product mix initiatives in the second half of this year. G&A was very strong this quarter at 14.7% of sales. This can be explained by the positive impact of the annualization of non-labor related initiative implemented at the end of Q1 last year. And in this case, the positive impact of this initiative is expected to subside in the remaining quarters of fiscal 2020.
So that was up 4.1% to $226.8 million representing 27.4% of sales, net earnings were $103.5 million, a 1.9% increase over the prior year and diluted earnings per share grew 6.5% to $0.33. CapEx for Q1 of fiscal 2020 totaled $30.3 million compared to $64.2 million the prior year when the corporation acquired a previously leased distribution center for $39 million.
Looking at capital allocation, our board approved a quarterly dividend of $0.044 per share. Another note, we took a pause from share repurchases under our normal course issuer bid in Q1 in order to maintain our leverage ratio in the range of 2.75x adjusted net to EBITDA. In step three, cash flows were used for working capital and capital expenditures.
因此，在本季度深入了解我们的业绩之前，请快速了解一个重要的会计变化。我们的若干主要财务指标（包括毛利率，EBITDA和EBITDA利润率）受到2019年2月4日生效的新租赁会计准则IFRS 16的影响。上年度财务信息已经过重述，以便在一致的基础上反映IFRS 16 。由于这一新标准，与租赁物业相关的大部分入住成本不再是毛利的费用，因为它们在资产负债表中记录为使用权资产抵消租赁负债。资产按直线法或租赁期折旧，而负债按贴现利息支出计算，并在租赁剩余期限内支付租金时减少。
Finally looking at our outlook for fiscal 2020 based on first quarter performance, we are reiterating our full year guidance across all key metrics, net new stores, gross margin, SG&A and EBITDA as a percentage of sales. We are also revising upward our full year assumption for comparable store sales by 50b to a new range of 3% to 4%. Please note here again that our guidance range have been restated to reflect IFRS 16 where appropriate.
Our net new store target is at 60 to 70, we expect gross margin to be in the range of 43.25% to 44.25% as modified for IFRS 16 due to the capitalization of occupancy costs to the right of use asset that gets depreciated. SG&A as a percentage of sales remains in the range of 14.25% to 14.75% and EBITDA margin in the range of 28.5% to 30% as modified per IFRS 16.
CapEx for the fiscal 2020 stays in the range of $130 million to $140 million, which includes the remaining commitments for the distribution center expansion, new store openings, maintenance and renovations as well as IT projects. If we exclude distribution center expansion costs and store growth CapEx we are aligned with the historical capital intensity ratio of approximately 2% of sales.
With that, I will now turn it over to Neil for concluding remarks.
Thank you, Michael.
In conclusion, I would like to say a few words about the last year and our priorities in fiscal 2020. There is no question that the retail environment was more challenging in fiscal 2019. On one hand, our competitors were reluctant to pass on higher costs through price increases. And on the other hand consumer spending was more sluggish at the macro level. We responded with purposeful decisions with the long-term in mind. In full knowledge of the potential, shorter term impact this could have on product margins. We made the strategic decision to be aggressive in maintaining our strong value proposition.
We believe this was the right approach, which has been validated by the strong top-line growth in Q1. We continue to reinvest in our strong value proposition to tweak our merchandising and to enhance the shoppers in-store experience. Consumers are responding favorably. We will continue on this path as we execute our growth strategy with discipline and as we continue to improve our productivity and operational efficiency. Our business model is strong and our growth potential remains compelling in the short-term and into the future. I am confident that we will continue to grow profitably and to create sustainable value for our shareholders.
With that, I will now turn it over to the operator to take questions from financial analysts. Thank you.
Thank you. We will now take questions from the telephone lines. [Operator Instructions] The first question is from Irene Nattel of RBC Capital Markets. Please go ahead.
谢谢。 我们现在将从电话线询问。 [操作员说明]第一个问题来自RBC Capital Markets的Irene Nattel。 请继续。
Thanks and good morning everyone.
I think what everyone is struggling with this morning is the very strong same-store sales print at a more granular level, what were some of the initiatives that drove that? But the offset is the gross margin level and where the confidence comes from in your ability to deliver gross margin in your guidance range for the balance of the year.
Okay. So, its Michael, I'll take that. So, part of the -- as I mentioned in the script, part of the decrease in gross margin is attributed to logistic costs. These are onetime logistics costs that will continue throughout the year and are related to the integration of the new DC, the expansion and integration of the two buildings if you want of the new DC. So last year, we had purchased the land and the buildings that were on them, we demolished those and built separately from the DC where we were operating from. So, we built up that complex. This year since the beginning of the year, we've been integrating the old with the new dismantling equipment and moving things around and have been incurring costs because of that.
Now these obviously will be one-time cost, the DC is not finished as we mentioned also and will continue the integration of that over the next three quarters and so will fill that and by the end of this year, it should be completed. So that's one part.
Now the outlook we gave you factors that. So, we despite this, we do feel confident that our margin will stay within the range of 38% to 39% using the prior accounting way of doing things like you were used to.
So, the other component was, there was a reduction or an increase in the cost of goods or a reduction in the margin of goods a slight one. And also as we told you and it's still the case, we have been passing on more costs. We do a bit of markups like we did last year, but again we don't feel that we haven't been passing on costs and doing ramping up our markups. So, obviously, and for the expected gross margin of the year, in other words the outlook we assume a bit the same conditions that we're living through today. So I think we project like it was last year more stable environment from that point of view.
And so those are the main components. And we did have increased sales of lower price point more on the consumable side. These are -- it's not added skews from on that side. It's simply that with the productivity initiatives we did internally more lower price points sales were stimulated and so that also transpired into the results.
所以这些是主要组成部分。而且我们确实在消耗品方面增加了更低价格的销售额。这些都是 - 它没有在这方面增加偏差。简单地说，通过我们在内部进行的生产力计划，更低的价格点销售受到刺激，因此也进入了结果。
So, I guess, the question then Michael is given everything that you've just said. So, what has to happen for you to reach the higher end of the gross margin guidance range because the question really is around what's perceived to be current absence of operating efficiency probably because of the DC initiatives? So, what has happened to get to the higher end of the range versus the lower end of the guidance range?
所以，我想，迈克尔的问题是给你刚才说的一切。 那么，要达到毛利率指导范围的较高端会发生什么事情，因为这个问题实际上是因为当前缺乏运营效率可能是因为DC计划？ 那么，到达范围的较高端与指导范围的下端之间发生了什么？
Right. So we're going to see that in the second half of the year happening and where we've got the bigger sales period, the higher seasonal items sales. And we expect that, for example product margins should improve in those last two quarters from the mix of the products that we'll be selling in that period.
Logistics costs impact is higher at the beginning of the year and although it will impact the next quarters, it will slow down towards the end of the year. And so those are the main factors. So, yes.
对。 因此，我们将看到在今年下半年发生的事情以及我们的销售期越长，季节性商品销售额越高。 我们预计，例如，在过去两个季度中，产品利润率应该从我们将在该时期销售的产品组合中得到改善。
物流成本影响在年初较高，虽然会对下一季度产生影响，但在年底前将会放缓。 所以那些是主要因素。 所以，是的。
Okay. And then just one other -- one unrelated question and I'll pass it on. I suspect more on that subject. You didn't -- you weren't active on the NCIB in Q1. Does that mean that we shouldn't expect much activity as we move through the year? Or do you see a resumption on the NCIB as we move through the year?
好的。 然后只是另一个 - 一个无关的问题，我会传递它。 我怀疑这个问题更多。 你没有 - 你在第一季度没有活跃在NCIB上。 这是否意味着我们在这一年中不应期待太多的活动？ 或者，当我们度过这一年时，您是否看到NCIB的恢复？
Yes. No, it's going to resume because typically Q1 is the quarter where we have the least cash flow generation. And two, as you all know, our comfort zone is around 2.75x adjusted debt to EBITDA where more in the range of 2.83. So, that said, the main reason why we haven't been buying back shares. So, we said we would respect that that structure. And so being at 2.85 again of the quarter times is slightly above that level.
And as we move out in time Q2, Q3 and Q4 you should expect within -- the cash flow coming in that leverage falling back down and then buying back shares again.
是。 不，它会恢复，因为通常Q1是我们拥有最少现金流量的季度。 另外两个，众所周知，我们的舒适区约为2.75倍调整后的债务与EBITDA，其中更多的是2.83。 所以，那就是我们没有回购股票的主要原因。 所以，我们说我们会尊重那种结构。 因此，季度时间再次为2.85，略高于该水平。
随着我们在第二季度，第三季度和第四季度的推出，您应该预期内部 - 现金流量将会回落，然后再次回购股票。
That's great. Thank you.
You are welcome.
Thank you. The following question is from Patricia Baker of Scotiabank. Please go ahead.
谢谢。 以下问题来自丰业银行的Patricia Baker。 请继续。
Good morning. And thank you very much. Just want to circle back on the same-store sales. It's pretty impressive that you're able to drive 5.8% same-store sales and as you indicated more units in the basket. All of that in the absence of the normalized level of inflation. Can you speak to some of the more effective tactics the merchandising strategies that permit you to really drive the items per basket?
早上好。 非常感谢你。 只想回到同店销售。 令人印象深刻的是，你能够推动5.8％的同店销售，并且你在篮子里表明了更多的单位。 所有这些都是在没有正常通货膨胀水平的情况下。 你能谈谈一些更有效的策略吗？商品推销策略可以让你真正推动每个篮子的物品？
So, what stimulated as I was mentioning when touring because we don't get the benefit of inflation. In other words passing on costs and because we don't have the benefit following the introduction of higher price point. The only thing left to stimulate more sales is unit sales and traffic. So, obviously, we don't want to publicly disclose our tactics and specific tactics on how we did that. But it's certainly worked and we're doing everything to keep it working for the rest of the year. And so Neil mentioned that we have better tools, better tools meaning more information. We hired competencies, if you want to help us understand a bit more the addressable market and I think Neil you could say it even better than I said.
所以，正如我在巡回演讲时提到的那样刺激因为我们没有得到通货膨胀的好处。 换句话说，传递成本，因为在引入更高的价格点之后我们没有获益。 促进更多销售的唯一因素是单位销售和流量。 所以，显然，我们不想公开披露我们如何做到这一点的策略和具体策略。 但它肯定有效，我们正在尽一切努力让它在今年剩下的时间里继续运转。 所以尼尔提到我们有更好的工具，更好的工具意味着更多的信息。 我们聘请了能力，如果你想帮助我们了解更多可寻址的市场，我认为尼尔你可以说它比我说的更好。
I think you said it fine. In the end, we agree with you. We think it's fantastic.
我觉得你说的很好。 最后，我们同意你的看法。 我们认为这太棒了。
Thanks for that Neil.
Thank you. The following question is from Kenric Tyghe of Raymond James. Please go ahead.
谢谢。 以下问题来自Raymond James的Kenric Tyghe。 请继续。
Thank you and good morning.
Michael just on the gross margin performance in quarter. You saw the highlighted that obviously there was very strong. It would appear there was very strong sell through of higher ticket items. In other words getting that value proposition more rights or corrected at that sort of $4 type price point. But we still so obviously a margin drag because of the as you said lower margin to those price points could you just make sure we're understanding exactly what happened and why the size of the drag which is obviously an offset on that same-store sales number.
迈克尔刚好在季度的毛利率表现。 你看到了突出显示，显然非常强大。 看起来通过更高票价的商品非常强劲。 换句话说，获得更多权利的价值主张或在那种4美元类型价格点进行纠正。 但是我们仍然显然是一个保证金拖累，因为你说这些价格点的利润率较低，你可以确保我们确切地了解发生了什么以及为什么拖累的大小显然是相同商店销售的抵消 数。
Right. So, the three components, one is logistics. So, logistics is definitely one component. And if we mentioned it's because it's significant enough to be mentioned. Then there's the added sales of lower price point items so that automatically -- so the good news is it's not that we're replacing a higher price point by a lower price point it's just that instead of selling one, we're selling two that lower price point. So in terms of volume, it's a lower price point item but you're selling more of it.
And the third one is, effectively because we're not -- still not passing on costs. And I think we've all seen a lot of our competitors and their recent disclosures showing reduced margins on their side is that where we all get inflation, but we're still not passing that on. So it's normal to see a bit of impact on our margins of the products we were sourcing. So those are the three components. One of those is a one-time for this year that we won't -- we shouldn't see next year because it'll be fixed.
It's the D.C., the other we will still encourage as the sound of a lower price point items but not to the detriment of higher price point. It's not that we're we don't want to sell our higher price point item.
And so we expect, we're in Q1 the lowest quarter sales of the year. We expect more so in Q3 and Q4 where you get the higher price point, the higher margin items, the seasonal stuff taking in to improve the margin in that second half of the year.
对。那么，三个组成部分，一个是物流。因此，物流绝对是一个组成部分。如果我们提到这是因为它足以被提及。然后就是自动增加低价位商品的销售额 - 所以好消息是，我们不是以更低的价格点取代更高的价格点，而不是卖掉一个，我们卖的是两个更低的价格点。所以就成交量而言，它是一个价格较低的商品，但你销售的更多。
而第三个是，实际上因为我们不是 - 仍然没有传递成本。而且我认为我们都看到了很多竞争对手，他们最近的披露显示他们的利润率降低是我们所有人都受到通货膨胀的影响，但我们仍然没有通过这一点。因此，对我们采购的产品的利润率产生一些影响是正常的。这些是三个组成部分。其中一个是今年的一次性我们不会 - 我们不应该看到明年，因为它将被修复。
Okay. Thank you, Michael. If I could just ask one more quick question, on the same-store sales performance, was it fairly -- is anything we need to think about either by way of category or events in quarter that perhaps were bigger than expected or performed better than expected or is it a fairly clean same-store sales print.
好的。 谢谢你，迈克尔。 如果我可以再问一个更快的问题，就同店销售业绩而言，是否合理 - 我们需要考虑的是季度类别或事件，可能比预期更大或表现好于预期 或者它是一个相当干净的同店销售印刷品。
It means same-store sales print.
Great. Thank you.
Thank you. The following question is from Jim Durran of Barclays. Please go ahead.
谢谢。 以下问题来自巴克莱的Jim Durran。 请继续。
Yes. I just wanted to go back to the comp store sales conversation a bit. I know from touring the stores that one of the things you did is put the -- I will call it The Temptation Island to check a number of stores. How broadly is that now distributed through the network?
是。 我只是想回到comp商店的销售谈话。 我知道从商店出发，你所做的一件事就是 - 我会称之为The Temptation Island来检查一些商店。 现在通过网络分发的广泛程度如何？
Half of our stores have a queue line.
And would it be unfair to say that's had a material benefit to the comp store sales number this quarter?
It did have an effect for sure.
And is there any other initiatives that you've talked about in the last couple of quarters try to get a hold of the situation that you could talk to us about that you've deployed now and that would give us a sense of the sustainability of that support comps?
No. Well, it's a whole bunch of things. As you've been used to in the past that some of which helped directly to reduce costs, but also our aim by -- for example giving us more visibility on our inventory, the movement to better replenish, to better merchandise, no initiatives sometimes give you both. So it's a combination of all of that.
But the only real new thing that we mentioned to you over the past now it's going to be in the third quarter, its emphasis on category management and using those tools or that information that those tool give us to maximize our offering.
不，嗯，这是一大堆事情。 正如您过去习惯的那样，其中一些有助于直接降低成本，而且我们的目标是 - 例如让我们更清楚地了解我们的库存，更好地补货的动作，更好的商品，有时没有举措 给你们两个。 所以这是所有这些的组合。
Okay. And did -- whether it did have a negative effect on your business at all in the quarter?
好的。 并且确实 - 它是否确实对本季度的业务产生了负面影响？
And finally, just with respect to the foot new expanded capacity on your DC. Do you expect that initially because you've got excess capacity that the cost -- the handling cost per case will go up before it has an opportunity to go down through efficiency? Or how should we be thinking about how that's going to progress as that new facility comes on stream?
最后，就DC的新增扩展容量而言。 您是否期望最初因为您的产能过剩而导致成本 - 每个案例的处理成本会在它有机会降低效率之前上升？ 或者，当新设施投入使用时，我们应该如何思考这种情况会如何发展？
I don't think that the difference between that larger facility being less than efficient to perfectly efficient will have any material effect on our cost to be honest. So, I don't believe that will be the case.
So we should just think of it as you can handle more growth. And there's no set of automation or other efficiencies that you'll grab that might be giving an opportunity to materially reduce your handling costs.
Right. Because the way it works is, you build your functionality closest to let's say the automation. And then as you keep expanding in fact the areas that are being worked on physically are a little further from the actual automation. So if anything that allows you the ability to expand and have a larger store base, but it gets a little less efficient rather than more efficient. But even at that it's not material.
对。 因为它的工作方式是，你构建的功能最接近让我们说自动化。 然后，随着您不断扩展，实际上正在进行物理处理的区域距离实际自动化稍远一些。 因此，如果有任何东西可以让您扩展并拥有更大的商店基础，但它的效率会降低，而不是更高效。 但即便如此，它也不重要。
Okay. That's helpful. Thank you.
好的。 这很有帮助。 谢谢。
Thank you. The following question is from Peter Sklar of BMO Capital Markets. Please go ahead.
谢谢。 以下问题来自BMO Capital Markets的Peter Sklar。 请继续。
Michael on the 170 basis points deterioration and gross margin and to keep referring to the logistics costs. Can you frame as like what the magnitude of that was. And is that like a third of the margin compression or a half or a quarter, anything you can wrap around that.
迈克尔在170个基点的恶化和毛利率并不断提到物流成本。 你可以像那样大小的框架。 这就像是三分之一的保证金压缩或一半或四分之一，你可以用它来包装。
Good try, Peter. But we won't disclose what it is, but if we mentioned it, it's because it was significant enough for us to mention it.
Okay. And when you're talking about, the impact of mix of your sales mix and the impact that had on margin, I think you're implying that lower price point items carry lower margins in traditional retailing typically it's higher price point items that carry lower percentage margins although they have higher dollar margins. Is yours like the flip flops of that?
好的。 当你谈到时，你的销售组合和对保证金的影响混合的影响，我认为你暗示低价位点项目在传统零售业中的利润率较低，通常是价格较高的价格较低的项目 百分比利润虽然有较高的美元利润率。 你的拖鞋是不是喜欢它？
Yes. So, in other words the gross -- here, if you look at in -- we disclose in that our consumable mix went up from 39% to 41%. So that consumable mix, if you remember so 16% is seasonal. That's our higher margin mix. Second, general merchandise and third consumables. So it's that consumable mix portion that grew that is lower margin if you want than the other, so you can have some higher price point and lower price point, but a lot of those are lower price point items.
是。 因此，换句话说，粗略 - 在这里，如果你看一下 - 我们透露，我们的消耗品混合物从39％上升到41％。 所以消费品混合，如果你记得那么16％是季节性的。 这是我们较高的利润率组合。 第二，一般商品和第三消耗品。 因此，如果你想要的话，消费品混合部分的增长幅度较低，因此你可以拥有更高的价格点和更低的价格点，但其中很多都是价格较低的商品。
So, what you said is correct, but it depends on the category of goods of the lower price line items.
Okay. And Neil, in your remarks you said that Dollarama is aggressively maintaining a strong value proposition. What does that mean? Does that mean you're lowering prices and margins? Or does that mean you have -- in terms you have more assortment at the entry level price points? Just explain what that statement means.
好的。 尼尔，在你的评论中，你说Dollarama正积极维持强大的价值主张。 那是什么意思？ 这是否意味着你降低了价格和利润？ 或者这是否意味着你有 - 在入门级价格点你有更多的分类？ 只需解释一下该陈述的含义。
Basically it means that I'm speaking to the question of inflation in the market. We're just at a time when the market is less stable like it is now or the retailers in the market are being more wary of price increases, we are going to be the least aggressive to raise prices. And so we want to just take our time and make sure our relative value offering, which is our bread and butter. And what we do that that special stuff remains what it is and that it's a focus of the buyers to ensure that; one, we have an offering at our lowest price points in every category; and two, that we are competitive at all of those price points. That's all.
基本上这意味着我正在谈论市场中的通胀问题。 我们正处于现在市场不稳定或者市场零售商对价格上涨更加谨慎的时候，我们将成为提价最不具侵略性的时期。 所以我们想花时间确保我们的相对价值，这是我们的面包和黄油。 而我们所做的就是那些特殊的东西仍然是它的本质，这是买家关注的重点; 一，我们以每个类别的最低价格提供产品; 第二，我们在所有这些价位上都具有竞争力。 就这样。
So when you talk about inflation, you're talking about like product inflation not overhead inflation and labor inflation.
Mostly exactly what you just said, but it entails all of it to be honest.
Okay. And lastly, Michael, the option to acquire the interest in Dollar City, which kicks in February 2020. What is the term of that option?
We don't disclose that, Peter. But it does begin at that date, contractual…
Actually, there is some term, it's not like you asked to design...
No, no. It's not that specific date. It goes beyond a year. I'll say that.
不，不。 这不是具体的日期。 它超过了一年。 我会说的。
Thank you very much.
Thank you. The following question is from Mark Petrie of CIBC. Please go ahead.
谢谢。 以下问题来自CIBC的Mark Petrie。 请继续。
Yes. So, obviously, you've touched on this a number of times now, but I just wanted to ask you again with regards to sort of the strategic decision to invest in the value proposition. Obviously, the same-store sales growth would suggest it paid-off in the minds of consumers, but at the same time, the gross margin investment was material, EBITDA growth was the lowest we've seen. It sounds like you've got sidelines to gross margin flattening out. So, should we think of this as effectively like a one-year initiative to sort of rebalance and invest in that value proposition?
And then, if that is the right way to think about it, what sort of risks do you see to how consumers perceive value once that initiative rolls off?
是。 所以，显然，你现在已经多次触及过这个问题了，但我只是想再问一次关于投资价值主张的战略决策。 显然，同店销售增长表明它在消费者心目中得到了回报，但与此同时，毛利率投资仍然很重要，EBITDA增长是我们见过的最低点。 听起来你有可能让毛利率趋于平缓。 那么，我们是否应该将此视为有效的，就像一年的重新平衡和投资于价值主张的倡议一样？
Well, it's always with -- it's not like, we throw something out there once and then look at it. This is managed daily. So, like Neil said and as you all know, we do 25%, 30% refresh this is done throughout the year. Every week there's something going on evaluating markups, looking at the markets, looking at the opportunities. And for the margin improving over the quarters, I kind of explained through logistics impact of that how that naturally happens. The other portion is the seasonal stuff Halloween's and Christmas seasons, which are the biggest or towards in the second half of the year with the higher margins. And so it's monitoring like that.
So, if inflation does kick in later in the year then we'll re-evaluate and see how we follow that or not. But, clearly in terms of compelling value as you just stated 5.8% same-store sales, 0.9% traffic clearly shows that as we told you last year that that compelling is still there and that's our whole business model. It's all about compelling value or price differentiation. And for us it's managing it like we've always done and nothing will change this year.
好吧，它总是与 - 它不是，我们扔掉一些东西然后再看看它。这是每天管理。所以，就像尼尔说的那样，众所周知，我们全年都会做25％，30％的刷新。每周都会有一些评估标记，看市场，看机会的事情。而且为了提高季度的利润率，我通过物流影响解释了自然发生的情况。另一部分是万圣节和圣诞季节的季节性东西，这是最大的或下半年的利润率更高。所以它就是那样的监控。
Okay. And then, again, it seems like the gap between total sales growth and same-store sales growth has narrowed a little bit relative to the store openings. I mean I know that timing can be a swing factor, but it does imply slightly slower new store ramp up. I'm just interested to hear how the block of stores that you opened in the second half of last year. How have they ramped relative to other recent cohorts?
好的。 然而，再次看起来，总销售增长与同店销售增长之间的差距似乎相对于商店开张而略有缩小。 我的意思是我知道时间可以是一个摆动因素，但它确实意味着新店增加的速度会稍慢。 我只是想知道你去年下半年开设的商店街区。 相对于其他近期队列，他们的表现如何？
No. Still they have been ramping up very well. The other little maybe color that can be Dollar City as you know we account for a portion of the revenues of Dollar City as Dollar City grows the direct shipment increase and the shipments that go through our network decrease. So that has a small impact too. So just there was a bit of noise in there that relates to Dollar City also.
不，他们仍然很好地提升了。 另一个可能是美元城的颜色，因为你知道我们占美元城收入的一部分，因为美元城增加了直接出货量增长，而通过我们网络的出货量减少了。 所以这也有一点影响。 因此，那里也有一些与美元城有关的噪音。
Okay. And then, just the last one, I mean in terms of the same-store sales outlook you did bump it, but obviously the Q1 number was well above even the higher range. Is this just sort of conservatism or are there other drivers or risks that you see to bring the comps back to the range of what we saw last year?
好的。 然后，就最后一个而言，我的意思是就同一商店的销售前景而言，你确实碰到了它，但显然第一季度的数字远高于更高的范围。 这只是一种保守主义，还是存在其他驱动因素或风险，您认为这些因素会使我们看到去年所看到的范围？
We're going to do our best to beat that range, you can be assure about that, but to reflect what we see today and what we're comfortable and disclose.
Okay. Appreciate it. Thank you.
好的。 欣赏它。 谢谢。
Thank you. The following question is from Brian Morrison of TD Securities. Please go ahead.
谢谢。 以下问题来自道明证券的Brian Morrison。 请继续。
Hey, good morning. Michael, if I can just follow up on the same-store sales growth. I think you said on the consumable side as you invest in lower price points drove units, it went from 39 to 41. Can you just quantify how much of the same-store sales growth in the quarter was attributed to that strategy?
嗨，早安。 迈克尔，如果我可以跟进同店销售增长。 我认为你在耗材方面表示，当你投资于较低的价格点推动单位时，它从39变为41.您能否量化本季度同店销售增长的多少归因于该策略？
No. We don't disclose it, but you can appreciate it through the fact that the mix grew from 39% to 41%. And like we've talked about, it's a mix of making sure, we've got the best products at the best price, but also Neil mentioned the initiatives we had at the chain level with the cue line. So it's all of that kicking in. And so that's the main explanation. We don't -- we won't carve out more.
不。我们不会透露它，但你可以通过混合物从39％增长到41％的事实来欣赏它。 就像我们所说的那样，它确保了我们以最优惠的价格获得最好的产品，但Neil也提到了我们在连锁级别与提示线的举措。 所以这就是所有这些。所以这是主要的解释。 我们不 - 我们不会开辟更多。
Put it in another way; was it the most important driver this quarter?
No. It's all like we said, it's all categories did very well.
Okay. I guess when I look at the shift towards more units through lower margin consumables, I'm just curious, is there a long runway that this can drive further traffic and basket next year or in order to maintain or sustain that revised comp that you put out there? Or will there be some level of importance towards returning to the inflationary price environment or introduction of a new price point?
好的。 我想当我看到通过较低利润消耗品向更多单位的转变时，我只是好奇，是否有一个长跑道，这可以推动明年的进一步交通和篮子，或者为了维持或维持你放的修改后的补偿 在那里？ 或者对于回归通胀价格环境或引入新的价格点会有一定程度的重要性吗？
Yes. We haven't factored inflation like I said. We factor normal inflation like last year. We are going to do some markups like we did last year, but much less than what we've seen in prior years. So, if we do, if inflationary pressures -- if inflation or put another way competitors are passing on more costs and we feel we have that opportunity that will be over and above.
是。 我没有像我说的那样考虑通货膨胀。 我们像去年一样考虑正常通胀。 我们将像去年那样做一些加价，但比我们前几年看到的要少得多。 因此，如果我们这样做，如果存在通货膨胀压力 - 如果是通货膨胀或另外一种方式，竞争对手会转嫁更多的成本，我们认为我们有机会将会超越。
You know what I'm getting at, is there a long runway here that you can continue to stimulate traffic and units with the new strategy?
Yes. I mean we -- yes, hopefully there is, that's what we're looking for.
是。 我的意思是我们 - 是的，希望有，这就是我们正在寻找的东西。
Okay. Last one just housekeeping, Michael. I can go through the notes. But can you just outline the annual impact on the decline in rent, increase in D&A and increase in interest from IFRS 16 just high level what those numbers are approximately?
好的。 最后一个只是家务，迈克尔。 我可以通过笔记。 但是，你能否概述年度对租金下降的影响，增加D＆A以及增加IFRS 16的利息，这些数字大致相当于高水平？
Yes. So Q1 was about 50 million for improved EBITDA with the operating lease which was capitalized. You've got 11.7 million which was additional interest expense and 39 million of depreciation expense. On whole year for what will be capitalized it's about 200 million of our operating leases.
是。 所以第一季度的EBITDA约为5000万美元，而经营租赁资本化。 你有1170万美元，这是额外的利息费用和3900万的折旧费用。 在全年资本化的情况下，我们的经营租约约为2亿。
That's great. Thank you.
Thank you. The following question is from Derek Dley of Canaccord Genuity. Please go ahead.
谢谢。 以下问题来自Canaccord Genuity的Derek Dley。 请继续。
Hi guys. Just switching gears a little bit to Dollar City. Can you comment just on any metrics that you're seeing there other than net new store openings. I mean can you give us any idea of how revenue growth has been occurring within those stores?
嗨，大家好。 只需稍微转换一下美元城。 除了净新店开张之外，您能否仅仅评论您在那里看到的任何指标。 我的意思是，您能否告诉我们这些商店的收入增长情况如何？
No. I'm sorry. What we gave you today, obviously, doing very well on the store base, revenues per square foot in Canadian dollars is better than or equal or almost better than what we're doing here and store size 6.5000 square feet-ish. And that's about it for now. And we'll see, if we exercise the call. Well, we'll see what we disclose there.
不，我很抱歉。 我们今天给你的，显然，在商店基础上做得很好，加元每平方英尺的收入好于或等于或几乎好于我们在这里做的和商店规模6.5000平方英尺。 这就是现在。 如果我们行使电话，我们会看到。 好吧，我们会看到我们在那里披露的内容。
Okay. I appreciate that. And then, how about on the bulk buying e-commerce initiative, is it roughly in terms of sales contribution, would it be similar to that of Dollar City?
好的。 我很感激。 然后，批量购买电子商务计划如何，大致就销售贡献来说，它会与美元城相似吗？
Oh, no. It has nothing to do with that and we're not attempting to tie that, but as I told you for the bulk sale, it's for the purposes of projection, it's a very small amount this year, next year. Again, this was for convenience purposes and I do not attribute any value to that other than the value of being more convenient and looking at our -- improving our customer service.
不好了。 它与此无关，我们并没有试图将其与此相提并论，但正如我告诉你的批量销售，这是为了预测，明年这个数量非常小。 同样，这是出于方便的目的，除了更方便和看我们的价值 - 改善我们的客户服务之外，我没有任何价值。
But, it would be safe to say that you haven't seen any cannibalization from the bulk sales into your consumer channel.
No, no, no.
Okay. Thank you very much.
Thank you. The following question is from Vishal Shreedhar of National Bank. Please go ahead.
谢谢。 以下问题来自国家银行的Vishal Shreedhar。 请继续。
Thanks. On these merchandising initiatives that you were talking about last quarter and we're seeing the results from this quarter to stimulate the traffic, how far are you in terms of implementing them. Is there a lot more opportunity associated with them in the quarters ahead as you cycled this? Or how should we think about that?
谢谢。 关于您在上个季度谈论的这些商品推销活动，我们看到本季度的结果可以刺激流量，您在实施它们方面有多远。 当你骑自行车时，在未来几个季度有更多的机会与他们相关吗？ 或者我们应该怎么想呢？
I would say we've done what we wanted to do and whether continuing to maintain what we did, create the same results or not, it's not something I can project on. But, I like where we're positioned in the market on relative retails and competitiveness and offering and mix. And so maintaining what we've done is the goal at this point.
我会说我们已经完成了我们想要做的事情以及是否继续保持我们所做的事情，创造相同或不同的结果，这不是我可以投射的东西。 但是，我喜欢我们在市场中相对零售和竞争力以及提供和组合的位置。 因此，维持我们所做的就是目前的目标。
Okay. And the benefits from the better data usage. Is reflected that in this and I know it's difficult to isolate, but is that reflected in this comp or there more things that will come from that looking forward?
好的。 以及更好的数据使用带来的好处。 反映在这一点，我知道它很难被孤立，但是这个反映在这个组合中还是会有更多的东西从那个期待中产生？
No. It is not reflected in this comp. And again, I cannot tell you what that will translate into in the future, but I can tell you, it is not reflected at all in this comp.
Okay. And is that early days kind of analyzing the data and will take time for you to implement the strategies or have you been on it for some period of time now?
We're on it but it's too early in the process to tell you, which strategies we are or are not going to execute.
Okay. And just a common question here for Michael. On the SG&A, what initiatives are now the key initiatives that you're implementing in order to improve the efficiency?
好的。 对迈克尔来说这只是一个常见的问题。 在SG＆A，您现在正在采取哪些举措来提高效率？
Well, we've got a number of initiatives, obviously and like I told you in the past, even the initiatives we started out 7, 8 years ago you had -- you're always turning on some certain functionalities, but we don't have big impactful initiatives this year like we've seen last year. So for Q1, we have the annualization of that non-labor related initiatives that we had last year that came in much better than we had anticipated that had that allowed us to offset that Ontario minimum wage hike.
We have started that initiative again in Q1, this year where we're getting that nice little bump in Q1 that's helping us that benefit. But that will not transpire in Q2, Q3 and Q4. So we'll come back to more normal differences between quarters. So, like I said, it's harder and harder, the lower hanging fruit is definitely behind us and now grinding it out and generating as much as we can from that.
好吧，我们有很多举措，显然就像我过去告诉你的那样，甚至我们7,8年前开始的举措 - 你总是开启某些功能，但我们不是 像我们去年看到的那样，今年有很大的影响力。 因此，对于第一季度，我们去年的非劳动相关举措的年度化比我们预期的要好得多，这使我们能够抵消安大略省的最低工资上涨。
今年第一季度我们再次启动了这项计划，我们在第一季度取得了不错的成果，这有助于我们获益。 但这不会在第二季度，第三季度和第四季度发生。 因此，我们将回到季度之间更正常的差异。 因此，就像我说的那样，它越来越难，下面悬挂的果实肯定在我们身后，现在正在研磨它并尽可能多地从中产生。
Thanks for the color.
Thank you. The following question is from Keith Howlett of Desjardins Securities. Please go ahead.
谢谢。 以下问题来自Desjardins Securities的Keith Howlett。 请继续。
Yes. I'm wondering if you could speak to the cadence of same-store sales growth, February, March, April.
It was as normal. Last year if you recall in April, we had poor weather conditions. So this year we were comping against that, but we didn't feel this year in terms of weather. We didn't feel any weather issue, specific to this year whereas last year we did in April.
这是正常的。 去年4月，如果你回忆起我们的天气状况不佳。 所以今年我们反对这一点，但我们今天没有感觉到天气。 我们没有感觉到任何天气问题，特别是今年，而去年我们在四月做了。
So, or the comps sort of in the 5.8% range through each of the three months.
I'm not going to split it between all of them, but they were good I mean they were good throughout.
And you didn't feel any -- you didn't feel the weakness in spring merchandise as you did last year. It was a normal spring/
你没有感觉到 - 你没有像去年那样感受到春季商品的弱点。 这是一个正常的春天/
Yes. But, it was a bit easier because we were comping against a softer April last year.
And then, just on the consumables, the consumable mix was 41% last year. So it's still moving higher than 41%?
It moved from 39 to 41. That's where we're at for the time being.
So, you're still -- in Q1 you're still at the last year's 41% level?
所以，你仍然是 - 在第一季度，你仍然处于去年的41％水平？
Yes. Well, we don't disclose it by quarter, so the AIF that we just reported as of that date.
Right. Just in terms of sourcing in China, do you have any benefit from U.S.-China trade issues or no impact or…?
The situation between the U.S. and China has caused instability for sure. So a lot of Chinese orders, the production is being moved from China to other countries. Often those other countries are Asian countries. And often those factories taking the orders are still Chinese owned companies or manufacturers in the other Asian countries. However, even if it's a Chinese factory, if it's in Thailand or Vietnam or somewhere else Malaysia what have you. They don't face the tariffs that they would if it was actually shipping out of China.
So, the movement of those orders from the Chinese mainland has certainly left some production gap in China. And so the market for orders in China now for the rest of the world is a little softer and so we're trying to take advantage of that, but it's still too early to appreciate the impact that might or might not have.
中美之间的局势肯定会造成不稳定。 因此很多中国订单，生产正从中国转移到其他国家。 通常那些其他国家是亚洲国家。 通常那些接受订单的工厂仍然是中国公司或其他亚洲国家的制造商。 然而，即使它是一家中国工厂，如果它在泰国或越南或其他马来西亚，你有什么。 他们没有面临实际运往中国的关税。
Thank you. And then, just one question on items priced at $1.25 or less, those items are growing as a proportion of sales again. There used to be a policy, I mean a soft policy that food products would not be priced above $2. So, I'm just wondering is the proportion of consumables products that are priced at $1.25 or less significantly greater than other categories?
谢谢。 然后，只有一个问题，价格为1.25美元或更低，这些项目再次增加销售比例。 过去有一个政策，我的意思是一个软政策，食品不会定价超过2美元。 那么，我只是想知道消费品的价格是1.25美元或更低的比例明显高于其他类别？
Yes. As a rule the answer is yes. And we do have a rule that food should be $2 or less. There's a small minute handful of exceptions that come in and out, but really it's statistically insignificant. And so the answer to your question is relative to the balance of our store, the answer is yes.
是。 通常答案是肯定的。 我们确实有食物应该是2美元或更少的规则。 有一小部分例外情况进出，但实际上它在统计上是微不足道的。 因此，您的问题的答案与我们商店的余额有关，答案是肯定的。
And then, just finally on the Q lines, have you accelerated that or you pretty much rolled out the same number in Q1 that you did in Q4 and Q3 last year sort of thing.
It's a steady pace. It's like last year. So, like we said we started this 2.5 years much slower pace, but compared to last year, I'd say we're more or less the same, so about 200 a year.
这是一个稳定的步伐。 就像去年一样。 所以，就像我们说的那样，我们开始这2.5年的速度要慢得多，但与去年相比，我会说我们差不多一样，所以每年大约200个。
200 a year.
Approximately 200 stores are built and converted a year.
Great. Thank you very much.
Thank you. The following question is from Edward Kelly of Wells Fargo. Please go ahead.
谢谢。 以下问题来自富国银行的Edward Kelly。 请继续。
Yes. Hi, guys. Good morning. Few questions for you. Just to follow up on the comps, I was hoping, could you maybe give us any color around what you're seeing so far in the second quarter, have you noticed any notable change in May early June in terms of trend?
是。 嗨，大家好。 早上好。 你几乎没有问题。 为了跟进比赛，我希望，你能不能给我们在第二季度到目前为止看到的任何颜色，你有没有注意到5月初在趋势方面有任何显着的变化？
No. We don't comment on the second quarter, sorry.
Okay. And then, just taking a step back, could you provide a bit more color in terms of what you're seeing from the consumer. I mean you've obviously mentioned sluggishness. I'm just kind of curious as to whether you've seen much change underneath of all this. And I'm not sure to what extent the work that you do internally to provide you with more insights around on that?
好的。 然后，只要退后一步，您可以根据消费者看到的内容提供更多颜色。 我的意思是你显然提到了迟钝。 我只是好奇你是否在这一切之下看到了很多变化。 而且我不确定你在内部做的工作在多大程度上为你提供了更多的见解？
No change. Really no change for now.
Yes. And as I said earlier, the buyers everyone is -- it's a daily thing. It's not like once a month we sit down and decide to look at the market. It's feeling it out. It's food to supply base. It's through the comp shop and everything else that goes on. But for the time being like said, it's -- no, we don't feel any -- it's neutral.
是。 正如我之前所说，每个人都是买家 - 这是日常事务。 这不像我们一个月坐下来决定看市场。 它感觉到了。 它是供应基地的食物。 这是通过comp商店和其他所有事情。 但就目前而言，它是 - 不，我们感觉不到 - 它是中立的。
Right. And then, just lastly for you on Dollar City. Can you maybe just help us understand a bit what the variables that you are considering as you contemplate the decision to exercise the option?
对。 然后，最后在Dollar City上为你服务。 您是否可以帮助我们了解您在考虑行使期权的决定时所考虑的变量？
Well, it's fine. When you're looking at finalizing the due diligence process, it's a lot of things. It's not just like one thing. Obviously, we've covered a lot of the risks. Our exposures through working with these potential partners for the past eight years, so in terms of implementing system, culture fit all of that obviously that's working very well. So, if we do exercise the call, you don't have to deal with that at the same extent that if it was an M&A. And it's appreciating the market just monitoring everything until it's time to do it. So it's nothing more and nothing less.
好吧，没关系。 当您正在考虑完成尽职调查过程时，这是很多事情。 这不仅仅是一件事。 显然，我们已经涵盖了很多风险。 在过去八年中，我们通过与这些潜在合作伙伴合作进行了曝光，因此在实施系统方面，文化非常适合所有这些，而且非常有效。 所以，如果我们行使这个电话，那么你就不必处理那个与M＆A相同的程度。 并且它正在欣赏市场只监控所有事情，直到做到这一点。 所以它没有更多，也没有更少。
That's the difference in the margin structure and I guess presumably return, does that does that bother you?
No. I mean, it preoccupies us in the sense that obviously, we don't want to go there if there's no margin, or it needs to be accretive so that's clear. And we gave you some information on the top-line where obviously they are doing very well. And we would not exercise that call if we felt that there wasn't any interesting bottom line. And so that will -- we'll find out as soon as we exercise the call, if we do.
不，我的意思是，从某种意义上说，它是我们所关注的，显然，如果没有保证金，我们不想去那里，或者它需要增加，以便明确。 我们给了你一些关于顶线的信息，显然他们做得很好。 如果我们觉得没有任何有趣的底线，我们就不会这样做。 所以，如果我们这样做的话，我们会尽快发现。
Great. Thank you.
Thank you. There are no further questions registered at this time. This concludes today's conference call. Please disconnect your lines at this time. And we thank you for your participation.
谢谢。 目前没有其他问题。 今天的电话会议结束了。 请在此时断开您的线路。 我们感谢您的参与。
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