The Financial Post reports in its Friday, Sept. 14, edition that Dollarama fell short of analyst estimates for profit in the second quarter as bad weather kept customers at home, prompting a cut in its same store sales forecast and sending shares up to 20 per cent lower.
A Reuters dispatch to the Post reports that Montreal-based Dollarama operates more than 1,000 stores across Canada and sells everything from kitchen ware to clothing accessories.
The company, which has been facing increased competition from Dollar Tree (based in the United States), said it kept price rises in check during the quarter, leading to a 2.6-per-cent rise in comparable sales.
That, however, was just half the consensus forecast of a 5.26-per-cent rise.
For fiscal 2019, Dollarama now expects comparable store sales growth in the 2.5-per-cent to 3.5-per-cent range, down from its earlier estimates of a 4-per-cent to 5-per-cent rise.
Raymond James analyst Kenric Tyghe says, "The negative same store sales guidance revision, while partially mitigated by a positive increase in gross margins (and decrease in SG&A margins), is problematic in our opinion."
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