UPDATE 1-Dollarama beats sales estimates on strong demand for essentials
(Adds background in paragraphs 2 to 4, 2024 outlook in paragraph 5)
June 7 (Reuters) -
Canadian discount store chain Dollarama Inc beat market expectations for quarterly sales on Wednesday, benefiting from strong demand for its cheaper groceries and household supplies.
With surging prices of groceries and gasoline hammering consumer spending power, cost-conscious buyers have been thronging to dollar stores to snap up on affordable goods, boosting sales at Dollarama.
The company's U.S. counterpart Dollar Tree Inc, however, trimmed its annual profit forecast in May, while Dollar General Corp cut its annual profit and sales forecast, both citing slowing demand for discretionary goods.
Last month, retail bellwether Walmart Inc said it saw strong demand for its low-priced groceries and other essentials, and is expecting this trend to continue in the back half of the year.
Dollarama on Wednesday reaffirmed its fiscal 2024 same store sales forecast and gross margin at 5.0% to 6.0% and 43.5% to 44.5%, respectively.
The company's sales rose to C$1.29 billion ($964 million) in the first quarter, from C$1.07 billion a year earlier, compared with analysts' average estimate of C$1.25 billion, according to IBES data from Refinitiv. ($1 = 1.3382 Canadian dollars) (Reporting by Juveria Tabassum and Aatrayee Chatterjee in Bengaluru; Editing by Shailesh Kuber)
