Canada's Dollarama beats sales estimates on consumer stockpiling

FILE PHOTO: A Dollarama store is pictured in Toronto, Ontario, Canada, June 5, 2018. REUTERS/Carlo Allegri

(Reuters) - 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% increase in average transaction size even as the number of transactions declined 17.9%, as consumers visited less frequently yet bought larger quantities of goods.

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

Sales rose to C$844.8 million ($631.30 million) from C$828 million, beating estimates of C$839.8 million. Excluding items, it earned 27 Canadian cents, compared with Wall Street estimate of 26 Canadian cents, according to IBES data from Refinitiv.

The company also said its board had approved a quarterly cash dividend of 4.4 Canadian cents per common share.

Dollarama did not provide fiscal 2021 outlook, citing the COVID-19 pandemic.

Reporting by Praveen Paramasivam in Bengaluru; Editing by Maju Samuel