Dollarama reports third quarter profit and sales up from year ago

Sales for the quarter totalled $1.29 billion, up from $1.12 billion a year earlier

Dollarama Inc. reported its third-quarter profit and sales rose compared with a year ago as it raised its comparable-store sales growth guidance.

The retailer said Wednesday (Dec. 7) it earned $201.6 million or 70 cents per diluted share for the 13-week period ended Oct. 30, compared with a profit of $183.4 million or 61 cents per share in the same quarter last year.

Sales for the quarter totalled $1.29 billion, up from $1.12 billion a year earlier.

Comparable-store sales rose 10.8% as the number of transactions climbed 10.3% and the average transaction size gained 0.4%.

Dollarama chief executive Neil Rossy said as inflationary pressure on consumers persist, the company expects strong demand for consumable products to keep stimulating topline growth through to the end of its fiscal year.

"Our strong performance across our key metrics year to date speaks to our commitment to providing the best year-round value on the everyday products we offer, combined with a convenient and consistent shopping experience,'' Rossy said in a statement.

In its guidance for the year, Dollarama says it now expects comparable-store sales growth for its current financial year to be in a range of 9.5% to 10.5% compared with earlier expectations for a range of 6.5% to 7.5%.

The company also narrowed its guidance for its annual gross margin as a percentage of sales to a range of 43.1% to 43.6% compared with earlier expectations for a range of 42.9% to 43.9%.

Dollarama also said Wednesday that it has signed a deal to buy three contiguous industrial properties in Mount Royal, Que., near its centralized logistics operations and next to its distribution centre for $87.3 million.

The company plans to redevelop the site to support its future logistics needs.

"This will provide us with additional flexibility to support our long-term logistics needs as we pursue our target of 2,000 Dollarama stores in Canada by 2031,'' Rossy said.

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