Dollarama forecasts annual sales above estimates on strong demand (updated)

Dollarama

04/04/2024 12:48

(Updates with details from release, adds background)
       April 4 (Reuters) - Dollarama  DOL.TO  forecast annual
and quarterly sales above estimates on Thursday, betting on
consistent demand for its discounted groceries and essentials. 
    Discount store operators have seen steady demand, even as
other retailers struggled with softer sales as cost-conscious
consumers increasingly stick to a budget when shopping. 
    Consumers in Canada and the United States have been looking
for cheaper deals on items, ranging from cleaning supplies to
groceries and apparel as they fend off steeper costs of rentals
and fuel.
    The Montreal-based discount store operator reported
quarterly sales of C$1.63 billion ($1.21 billion), up from
C$1.47 billion a year earlier, while analysts on average
estimated C$1.61 billion, as per LSEG data. 
    Discount retailers are effectively tapping into consumer
preferences for cost-effective shopping, seizing market share
from traditional department stores, in the face of soaring
interest rates, analysts note.    
    Off-price retailers in the U.S. such as TJX  TJX.N  exceeded
quarterly results as thrifty shoppers hunt cheaper apparel,
cosmetics and gift deals.
    Excluding items, Dollarama posted an adjusted profit of
C$1.15 per share for the quarter, above expectations of C$1.06
per share.
    Its gross margin was 44.5% of sales, compared with 43.5% in
a year-ago quarter, due to lower inbound shipping costs.
    The company expects annual comparable store sales growth in
the range of 3.5% to 4.5%, largely above analysts' estimates of
3.73%.


($1 = 1.3498 Canadian dollars)

 (Reporting by Annett Mary Manoj in Bengaluru; Editing by Shweta
Agarwal)
 ((AnnettMary.Manoj@thomsonreuters.com))