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Dollarama beats sales estimates as shoppers stocked up on essentials

Canadian discount retailer Dollarama Inc beat estimates for quarterly sales on Wednesday, as consumers bought more groceries and other essentials per visit to its stores amid the coronavirus crisis.

Deemed an essential business, Dollarama saw higher demand for basic products, including cleaning supplies and packaged foods, in late March and early April, as most of its stores remained open while the coronavirus crisis brought many Canadian businesses to a virtual halt.

Dollarama said it witnessed a 22.6 per cent increase in average transaction size even as the number of transactions declined 17.9 per cent, as consumers visited less frequently yet bought larger quantities of goods.

Same-store sales, excluding temporarily closed stores, rose 0.7 per cent, while analysts on average had expected a 1.76 per cent decline. As of June 8, 32 Dollarama stores were temporarily closed, it said.

Sales rose to $844.8 million from $828 million, beating estimates of $839.8 million. Excluding items, it earned 27 cents, compared with Wall Street estimate of 26 cents, according to IBES data from Refinitiv.

The company also said its board had approved a quarterly cash dividend of 4.4 cents per common share.
Dollarama did not provide fiscal 2021 outlook, citing the COVID-19 pandemic.

© Thomson Reuters 2020

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