MONTREAL — Discount retailer Dollarama Inc. posted higher sales and profit in its latest quarter as Canadian consumers sought out cheaper prices amid inflation.
The dollar store chain said Friday it's attracting shoppers from "all walks of life" as the higher cost of living takes a toll on household spending.
Dollarama's strong performance "reflects a sustained consumer response to our unique value proposition, especially for everyday essentials," president and CEO Neil Rossy said in a statement.
The Montreal-based company raised its comparable store sales guidance for the year on Friday as it reported a second-quarter profit of $193.5 million, up from $146.2 million in the same quarter last year, as sales rose 18.2 per cent.
The discount retailer said the profit amounted to 66 cents per diluted share for the quarter ended July 31, compared with a profit of 48 cents per diluted share a year ago.
Total sales for the three-month period totalled $1.22 billion, up from $1.03 billion a year earlier, while comparable store sales, a key metric for retailers, gained 13.2 per cent as the number of transactions rose 20.2 per cent, but the average transaction size fell 5.8 per cent.
Irene Nattel, an analyst with RBC Dominion Securities Inc., said in a report that the results beat the bank's forecast amid better-than-expected same-store sales.
The smaller basket size coupled with an increase in store traffic reflects higher sales of consumables and strong seasonal demand, Nattel said.
In its outlook, Dollarama raised its comparable store sales growth assumption for its 2023 financial year to a range of 6.5 to 7.5 per cent compared with earlier expectations for between 4.0 and 5.0 per cent.
This report by The Canadian Press was first published Sept. 9, 2022.
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