Dollarama reported strong third-quarter results on Thursday as consumers look for discounts on a range of goods.Christinne Muschi/The Canadian Press
Dollarama Inc. DOL-T on Thursday raised its annual sales forecast after beating analysts’ estimates for third-quarter results, as price-sensitive shoppers turned to its stores for affordable consumables and seasonal merchandise.
Toronto-listed shares of the company rose about 2 per cent.
Discounted goods ranging from pantry staples to cleaning supplies and personal care items have been a steady draw for consumers dealing with tighter wallets and stubborn inflation, boosting sales at dollar stores.
Inflation in Canada is expected to be temporarily higher in the near term, even as the economy seems to be broadly resilient to the impact of U.S. trade measures.
The company’s chief executive Neil Rossy said the business was sustaining growth in an “unpredictable” economic environment thanks to its cost discipline and business expansion in Latin America and Australia.
The forecast and strong recent performance point to another solid year, RBC Capital Markets analyst Irene Nattel said, noting it could be tempered by “caution around evolution of consumer spending.”
U.S.-based discount retailers Dollar Tree Inc. DLTR-Q and Dollar General Corp. DG-N raised their sales and profit forecasts last week, helped by strong demand from deal-hunting consumers.
Dollarama expects fiscal 2026 comparable sales for its Canadian segment to grow in the range of 4.2 per cent to 4.7 per cent, compared to previous expectations of a 3-per-cent to 4-per-cent rise.
It forecast annual margin in the range of 45 per cent to 45.5 per cent compared to its prior target of 44.2 per cent to 45.2 per cent.
Net sales for the third quarter ended Nov. 2 came in at US$1.91-billion, above analysts’ average estimate of US$1.87-billion, according to data compiled by LSEG.
Comparable store sales in Canada in the reported quarter rose 6 per cent, driven by a 4.1-per-cent increase in transactions and a 1.9-per-cent rise in average basket size, Dollarama said.
It earned US$1.17 a share, beating estimates of US$1.10 a share.