Dollarama beats sales estimates on strong demand for affordable goods

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

(Reuters) -Canada’s Dollarama Inc beat quarterly revenue expectations on Wednesday helped by strong demand for affordable everyday goods and seasonal products such as home decor items during the holiday season. Higher prices of food and gas pushed consumers to shop at discount store chains such as Dollarama for daily essentials and cheaper seasonal items during the all-important holiday period.

Same-store sales in the fourth quarter increased by 15.9%, compared to a growth of 5.7% a year earlier. Analysts on average expected growth to be at 9.63%.

The discount store chain said the introduction of additional price points up to $5, strong demand for consumable products, seasonal items and general merchandise, as well as fresh product offerings contributed to same-store sales growth.

The company said it expects annual same-store sales growth of 5% to 6%, compared with analysts’ average estimate of 5.7%, according to Refinitiv IBES data.

Net income attributable to Dollarama rose to C$261.3 million, or 91 cents per share, in quarter ended Jan. 29, from C$220 million, 74 Canadian cents per share a year earlier.

Dollarama’s revenue rose 20.3% to C$1.47 billion ($1.08 billion), beating expectations of C$1.39 billion, according to Refinitiv IBES data.

($1 = 1.3594 Canadian dollars)