MONTREAL — Discount retailer Dollarama Inc. posted higher sales and profits in its latest quarter as Canadian consumers seek cheaper prices amid inflation.
The dollar store chain said on Friday it was attracting shoppers from “all walks of life” as the rising cost of living weighs on household spending.
Dollarama’s strong performance “reflects a sustained consumer response to our unique value proposition, particularly for daily necessities,” President and CEO Neil Rossy said in a statement.
The Montreal-based company on Friday raised its forecast for comparable store sales for the year by reporting a profit of $193.5 million in the second quarter, against $146.2 million in the same quarter last year, sales having increased by 18.2%.
The discount retailer said earnings were 66 cents per diluted share for the quarter ended July 31, compared with earnings of 48 cents per diluted share a year ago.
Total sales for the three-month period totaled $1.22 billion, up from $1.03 billion a year earlier, while same-store sales, a key metric for retailers, rose 13, 2% while the number of transactions increased by 20.2%, but the average transaction size fell by 5.8%.
Irene Nattel, an analyst at RBC Dominion Securities Inc., said in a report that earnings beat the bank’s forecast amid better-than-expected same-store sales.
The smaller basket size coupled with increased in-store traffic reflects higher consumable sales and strong seasonal demand, Nattel said.
In its outlook, Dollarama raised its comparable store sales growth assumption for its fiscal year 2023 to a range of 6.5-7.5%, compared to earlier expectations of 4.0-5.0%.
This report from The Canadian Press was first published on September 9, 2022.
Companies in this story: (TSX: DOL)
The Canadian Press