By Adriano Marchese


Dollarama's profit jumped in the fiscal third quarter, fueled by strong Canadian consumer demand and early contributions from its new stores in Australia.

The Canadian dollar-store operator posted on Thursday a rise in net income to 321.7 million Canadian dollars (US$233.2 million), or C$1.17 a share, in the quarter ended Nov. 2, up from C$275.8 million, or C$0.98 a share, in the comparable quarter a year earlier.

Analysts had forecast earnings per share to rise to C$1.11, according to FactSet.

Sales rose 22.2% to C$1.91 billion, topping analyst expectations for a more modest rise to C$1.89 billion. The increase came from C$186.1 million in sales at 401 stores in Australia, from an increase in Canada stores over the past year, and from higher sales at existing Canadian locations.

In Canada, comparable-store sales increased by 6%, compared with 3.3% in a year earlier.

The Mount Royal, Quebec-based company said that in the quarter, shoppers came in through its doors more often and bought more, with the number of transactions rising 4.1% and average transaction size rising 1.9%.

Chief Executive Neil Rossy said that, internationally, the company continues to advance its growth plans and the rollout of its Dollarcity chain in Latin America.

"Dollarcity delivered another quarter of strong financial and footprint growth, opening their 700th store in Latin America and fifth location in Mexico after quarter-end," Rossy said.

Meanwhile, in Australia, he said the company has begun laying the groundwork for the transformation of The Reject Shop, which it recently acquired.

For the year, Dollarama now expects its Canadian business to perform better than initially expected. It has raised its comparable-store sales target to a range of 4.2% to 4.7%, up from a previous target range of 3% to 4%.

Gross margin for Canada is expected to be between 45% and 45.5%, up from 44.2% to 45.2%. Capital expenditures are expected lower, now in a range of C$240 million to C$285 million, compared with C$285 million to C$330 million, which Dollarama said has to do with the timing of certain expenses related to the development of the Western logistics hub.


Write to Adriano Marchese at adriano.marchese@wsj.com


(END) Dow Jones Newswires

12-11-25 0803ET