* EPS C$0.56 vs forecast C$0.53
* Revenue rises 12 percent, but misses expectations
* Same-store sales rise 5.3 percent
* Shares down 1 percent, after hitting record high
(Adds comments from analyst, conference call)
By S. John Tilak
TORONTO, April 7 Dollarama Inc (DOL.TO),
Canada's largest operator of dollar stores, said on Thursday it
plans to open 50 new stores within a year as the popularity of
its discount format soars.
Dollarama, which went public in 2009, is growing quickly as
bargain-hunting Canadians who flocked to its stores during the
economic downturn, stayed on after the economy recovered.
The dollar-store concept has caught on to such an extent
that malls that previously eschewed it, preferring to stick to
higher-end brands, are now seeking to attract it.
"Now Dollarama is being sought after as an anchor tenant
in malls," Versant Partners analyst Neil Linsdell said.
The chain expects to be operating more than 700 stores
within a year. It currently has 652.
Montreal-based Dollarama said its fourth-quarter profit
jumped 23 percent, beating market estimates, as the company
introduced higher price points to attract shoppers beyond the
"The multi-price point move has been helping them expand
their average basket size," Linsdell said.
While other dollar stores stick to the C$1 per item format,
Dollarama has tried to edge upmarket, selling products for up
to C$2, and analysts say the move has allowed it to offer
merchandise appealing to a broader audience than its
In its fourth quarter, 42 percent of sales came from
products priced higher than C$1, compared with 30 percent a
Dollarama's fourth-quarter profit jumped to C$42 million
($44 million), or 56 Canadian cents a share, from C$34 million,
or 45 Canadian cents a share, in the year-before quarter.
Analysts on average were looking for earnings of 53
Canadian cents a share on revenue of C$411.5 million, according
to Thomson Reuters I/B/E/S.
Fourth-quarter revenue was up 12.3 percent at C$408.7
million after the company opened 49 net new stores during the
fiscal year. Dollarama, whose investors include Bain Capital,
said sales at stores open for at least a year, a key indicator
for retailers, rose 5.3 percent.
Dollarama's stock rose 1 percent to C$31 on the Toronto
Stock Exchange early on Thursday, touching its highest level
since the company went public, but then retreated 1.8 percent
to C$30.20. It has risen 37 percent in the past 52 weeks.
"We could see a modest dividend as early as next year,"
While Dollarama has been the dominant player in the
Canadian dollar-store sector, it could face increased
competition from Dollar Tree Inc (DLTR.O), a U.S. chain that
acquired Canada's Dollar Giant Store Ltd.
It is also speculated to be squarely in the sights of
private equity players seeking retail acquisitions.
In the United States, Family Dollar FDO.N, a similar
chain, has received several takeover bids.
(Reporting by S. John Tilak; editing by Janet Guttsman and