Dollarama beats quarterly profit view on lower costs and steady demand By Reuters

(Reuters) – Dollarama beat second-quarter profit estimates on Wednesday, helped by lower costs and steady demand for cut-price essentials such as groceries.

Consumers facing rising living costs have been relentlessly hunting for bargains and trading up to cheaper alternatives.

In addition, lower shipping and logistics costs have helped the dollar store company deal with persistent shrinkage challenges where inventory is either lost, stolen or damaged.

The Montreal, Quebec-based company’s gross margin rose to 45.2 percent in the quarter ended July 28, from 43.9 percent a year ago.

The company also reiterated its fiscal 2025 comparable sales forecast of growth in the range of 3.5%-4.5%.

U.S. dollar stores such as Dollar General (NYSE: ) and Dollar Tree (NASDAQ: ) have tried to boost demand as larger rivals such as Target, Walmart (NYSE: ) and PDD Holding’s e-commerce platform Temu they competed for the customer dollar.

It also meant discount retailers like TJX (NYSE: ) and Ross Stores (NASDAQ: ) reported sequential increases in customer traffic at the expense of higher-end department store operators like Macy’s (NYSE: ) .

Dollarama’s net sales rose 7.4 percent to $1.56 billion ($1.15 billion) from a year ago. Analysts had expected net sales of $1.57 billion, according to LSEG data.

The company posted net earnings per share of $1.02 compared with 86 Canadian cents a year ago. Analysts, on average, had expected a profit of 97 Canadian cents.

($1 = 1.3577 Canadian dollars)