Dollarama, the Canadian dollar-store operator, has reported stronger-than-anticipated profits in its fiscal third quarter. This positive result is attributed to the ongoing high demand for affordable everyday products from consumers amidst rising living expenses in Canada.
Impressive Financial Performance
For the three-month period ending on September 30, Dollarama achieved a net income of 261.1 million Canadian dollars ($192.1 million), or C$0.92 per share. This marks a substantial increase compared to the previous year’s figures of C$201.6 million, or C$0.70 per share. Analysts had predicted earnings of C$0.86 per share, highlighting Dollarama’s outperformance.
Robust Sales Growth
Dollarama reported a 14% increase in sales, amounting to C$1.48 billion, meeting analysts’ expectations. The company attributes this growth to the addition of new stores to its network over the past year and the impressive 11.1% year-on-year growth in comparable-store sales. This upturn is an improvement on last year’s growth rate of 10.8%.
Rising Costs
While Dollarama’s profitability expanded, costs also saw a noticeable rise during this period. General, administrative, and store operating expenses experienced a significant 17.6% increase to C$213.8 million, primarily due to higher labor costs in stores.
Consumer Demand Remains Steadfast
CEO Neil Rossy attributes the strong performance to sustained consumer demand for their wide range of affordable everyday products. Dollarama continues to provide value to shoppers in a challenging macro-economic climate.
