Dollarama results disappoint, shares drop 4.5 percent

Wed Jun 12, 2013 10:21am EDT
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TORONTO, June 12 (Reuters) - Dollarama Inc reported weaker-than-expected first-quarter results on Wednesday, hurt by poor weather and the cost of opening new stores, leading to a 4.5-percent drop in its share price in morning trading.

The Montreal-based dollar store operator said net income for the period ended May 5 was C$45.6 million ($44.76 million), or 62 Canadian cents a share, compared with C$42.6 million, or 56 Canadian cents a share, during the same period a year ago.

That was below the 67 Canadian cents a share analysts had expected, on revenue of C$449.5 million, according to Thomson Reuters I/B/E/S.

Shares fell 4.5 percent to C$69.35 on the Toronto Stock Exchange, and the stock was one of the biggest drags on the S&P/TSX composite index.

Overall sales grew by 12.6 percent to C$448.1 million.

Same-store sales, or comparable sales at stores open for at least 13 months, grew 3.7 percent. BMO Nesbitt Burns said in a research note this was also below expectations.

The company reported a 0.9 percent decline in traffic, which management blamed on bad weather.

($1 = $1.0188 Canadian) (Reporting by Solarina Ho; Editing by Jeffrey Hodgson and Bernadette Baum)