The crisis afflicting much of the retail industry has spared dollar stores in Canada, where industry leader Dollarama Inc. keeps opening new locations and improving profit margins.
Canada’s largest dollar-store chain posted earnings that topped analysts’ estimates last quarter and raised its gross-margin forecast for the year.
While the Montreal-based company added 17 net new locations, part of the boost came from a 6.1 percent increase in comparable-store sales.
Dollarama is growing faster than US dollar-store chains, helped by a Canadian market that’s less saturated than its southern neighbour and an longstanding policy to stay away from fresh food. The success of new items priced $2.90 to C$4, efforts to boost productivity and a penny-pinching approach to business emboldened the company to ramp up its expansion plans earlier this year. The stock is up 30 percent this year.