UPDATE 2-Dollarama profit rises as stores increase, customers spend more

Thu Sep 11, 2014 1:59pm EDT
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(Adds CFO comments; updates shares)

By Manya Venkatesh

Sept 11 (Reuters) - Canadian dollar-store operator Dollarama Inc reported a 15 percent rise in quarterly profit as its number of stores increased and customers spent more per visit.

The company, which sells items priced up to C$3, said it expected positive same-store sales for the rest of the year despite increasing competition.

Dollarama's same-store sales rose 4.2 percent in the second quarter and its number of transactions increased 1.1 percent.

Competition in the Canadian market has been intensifying with the arrival of big U.S. retailers such as Wal-Mart Stores Inc and Target Corp.

"We haven't seen any large structural changes around us from our competitors to lead us to believe we cannot continue to generate positive same-store sales," Dollarama's Chief Financial Officer Michael Ross told Reuters on Thursday.

Dollarama said the average spending by customers per trip rose 3.1 percent as the company sold more items priced higher than C$1.

Its number of stores increased to 917 as of Aug. 3 from 828, a year earlier. The company said it expected to open 70-80 more stores this year.   Continued...