(Reuters) - Canadian dollar-store operator Dollarama Inc’s (DOL.TO) third-quarter profit rose 23 percent on higher sales of more expensive merchandise and new store openings.
Net income rose to C$51.5 million ($51.87 million), or 68 Canadian cents per share, from C$41.8 million, or 55 Canadian cents per share, a year earlier. Sales rose 14.4 percent to C$458 million.
Sales at established stores, a key indicator for retailers, rose 6.6 percent, compared with a rise of 5.1 percent a year earlier.
The company said 57 percent of its sales came from goods priced at more than C$1.00, compared with 49 percent in the same quarter last year.
Dollarama introduced items priced at more than C$1.00 in 2009, and said in June that it would gradually roll out some non-grocery products priced as high as C$3.00.
Dollarama, which went public in 2009, is the Canada’s largest dollar-store operator with more than 700 locations. It opened 26 stores during the quarter.
The company said it was on track to open between 75 and 80 stores this fiscal year ending February 3.
The company’s margins were flat at 37 percent of sales due to higher costs related to new store openings.
On an adjusted basis, earnings were 71 Canadian cents per share. Analysts on average had been expecting earnings of 70 Canadian cents per share on revenue of C$458.1 million.
Dollarama shares, which have gained 55 percent over the last year, closed at C$62.6 on the Toronto Stock Exchange on Wednesday.
Reporting by Maneesha Tiwari in Bangalore; Editing by Joyjeet Das and Ted Kerr