Dollarama profit beats as shoppers loosen purse strings
By Darshana Sankararaman
(Reuters) - Canadian dollar-store operator Dollarama Inc (DOL.TO: Quote) reported a higher-than-expected quarterly profit on Wednesday as customers spent more per visit, boosting the company's same-store sales.
The retailer, which sells items for up to C$3, is also considering introducing higher priced products, though these are not expected to be priced above C$4 in the foreseeable future, Chief Financial Officer Michael Ross told Reuters.
The average check-out bill at Dollarama's stores rose 5.9 percent in the first quarter, with about 73.2 percent of sales being generated from items priced above C$1, compared with 63.2 percent in the same quarter last year, the Montreal-based retailer said.
Dollarama and other Canadian retailers have been facing stiff competition from U.S. retailers such as Wal-Mart Stores Inc (WMT.N: Quote), which have been expanding their presence in the region.
Dollarama's shares rose as much as 3.5 percent to C$3.50 in afternoon trading on Wednesday.
The retailer said same-store sales rose 6.9 percent in the first quarter ended May 4, more than double the 3.3 percent rise last year.
The number of transactions rose 1 percent, reversing from a fall of 0.4 percent in the first quarter of 2014.
Dollarama opened 17 stores in the quarter, taking its total number of stores to 972. Continued...