June 13, 2019 / 2:59 PM / 5 months ago

BUZZ-Dollarama Inc: Rises after revenue beat, upbeat same-store sales forecast

** Shares of the Canadian discount retailer rise 6.1% to C$44.79 - among the top 3 percentage gainers on the Toronto Stock Exchange’s S&P/TSX composite index

** Co raised FY comparable sales forecast after beating on revenue as limited price hikes attracted shoppers who also spent more on average

** Dollarama now expects FY same-store sales (SSS) to rise 3%-4% compared to its previous forecast of 2.5%-3.5%

** Revenues rose 9.5% to C$828 mln, above analysts’ average estimate of C$813.05 mln - Refinitiv data

** Co reports a jump of 5.8% in same-store sales beating analysts’ average estimate for a 2.9% rise; average transaction size rose 4.9%

** Co missed profit estimates by 1 Canadian cent

** “While the quarter is a miss, we believe we believe that investors will focus upon the upward revision to same-store sales guidance” - TD Securities

** Co’s gross margins declined by 170 basis points due to fall in product margins, negative sales mix and timing of logistic costs

** BMO Capital Markets says enthusiasm from high SSS may be somewhat dampened due to the gross margin decline

** Including Thursday’s gains, stock has risen 34.5% this year (Reporting by Shanti S Nair and Debroop Roy)

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