(Updates with market reaction, analyst comment, additional
By Solarina Ho
April 9 Canada's Dollarama Inc reported
a higher-than-expected rise in quarterly earnings on Wednesday
even though it had warned earlier this year that temporary store
closures from an ice storm had hurt results in December.
The Montreal-based discount retailer, whose shares jumped
more than 7 percent, also raised its quarterly dividend.
Net income rose nearly 8 percent to C$83 million ($76
million), or C$1.17 per share, in the fourth quarter ended Feb.
2 from C$77.1 million, or C$1.04 per share, a year earlier.
Analysts on average had expected earnings of C$1.10 per
share, according to Thomson Reuters I/B/E/S.
Sales increased 4 percent to C$582.3 million, mainly because
of the addition of 27 net new stores. The quarter had one fewer
week than the year-earlier period.
The analysts' average estimate was C$575.8 million.
BMO Capital Markets analyst Peter Sklar said in a research
note that analysts had lowered their estimates following the
warning early in the year.
Dollarama said in January it had to temporarily close some
80 stores in the days leading up to Christmas, when an ice storm
blanketed large swathes of central and eastern Canada. The deep
freeze had resulted in week-long power outages in Ontario,
Quebec and New Brunswick, where many of the company's stores are
Dollarama, which sells goods for up to C$3 in about 874
stores across Canada, said sales at established stores rose 1.1
percent during the quarter, despite a 7.5 percent drop in
December, typically one of its highest sales periods.
The average amount customers spent per trip rose 4.4 percent
during the quarter as the company sold more items priced higher
than C$1.00. The number of transactions fell 3.1 percent,
however, as a result of the storm.
The company raised its quarterly dividend to 16 Canadian
cents per share from 14 Canadian cents, for payment on May 7 to
shareholders of record on April 29.
The stock was up 7.3 percent at C$92.06 on the Toronto Stock
Exchange in morning trading.
($1 = 1.0930 Canadian dollars)
(With additional reporting by Ashutosh Pandey in Bangalore;
Editing by Prateek Chatterjee and Lisa Von Ahn)