Dollarama boosts sales forecast as demand for essentials thrives.
(Reuters) - Dollarama Raises Annual Sales Forecast After Beating Estimates
Canadians are flocking to Dollarama, the discount retailer, as they seek affordable alternatives to essential items amidst rising prices. The company has raised its annual sales forecast after exceeding quarterly sales expectations.
While other retailers struggle with declining sales, discount store operators like Dollarama continue to experience steady demand. Dollarama CEO Neil Rossy expects this strong demand to persist throughout the year.
Similar trends can be seen in the United States, where off-price retailers such as TJX and Ross Stores have also raised their forecasts due to increased demand for affordable goods.
To offset higher logistics and labor costs caused by supply chain disruptions in Canada, Dollarama has raised prices on some products. Currently, 15% of their products are priced above C$4.00, compared to 7% in September 2022, according to data from Stifel Canada.
The company now anticipates comparable store-sales growth of 10% to 11% for fiscal 2024, up from the previous estimate of 5% to 6%.
In the second quarter, Dollarama’s sales reached C$1.46 billion ($1.08 billion), surpassing analysts’ average estimate of C$1.40 billion. The company’s net income for the quarter also exceeded market expectations.
Montreal-based Dollarama continues to thrive as consumers prioritize affordability in their purchasing decisions.
($1 = 1.3569 Canadian dollars)
(Reporting by Juveria Tabassum in Bengaluru; Editing by Krishna Chandra Eluri)
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