March 29, 2018 / 11:35 AM / in 7 months

Dollarama's profit beats estimates as shoppers spend more

(Reuters) - Canada’s Dollarama Inc (DOL.TO) reported a better-than-expected profit, driven by an increase in comparable sales as shoppers spent more at its discount stores.

A pedestrian walks past a Dollarama store in Ottawa, Ontario, Canada, September 1, 2016. REUTERS/Chris Wattie

Same-store sales rose 5.5 percent in the quarter and the retailer maintained its gross margin at 41.4 percent.

The profit beat comes in spite of slowing retail spending across Canada and a nearly 21 percent increase in minimum wage in its most populous province, Ontario beginning January.

Dollarama also raised its capital expenditure outlook for fiscal 2019 to C$150 million to C$160 million from its previous guidance of C$110 million to C$120 million.

The Montreal-based company’s net earnings rose to C$162.8 million, or C$1.45 per share, in the quarter ended Jan. 29, from C$146.1 million, or C$1.24 per share, a year earlier.

Analysts on average had estimated the company to earn C$1.40 per share, according to Thomson Reuters I/B/E/S.

Sales rose 9.8 pct to C$938.1 million.

Reporting by Karan Nagarkatti in Bengaluru; Editing by Saumyadeb Chakrabarty and Shailesh Kuber

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