Sept 16 (Reuters) - Canada's Dollarama raised annual comparable sales growth forecast on Wednesday, as budget-conscious shoppers increasingly opted for its discount everyday products while contending with higher cost of living.
As consumers look for ways to stretch their budgets, many have shifted to affordable alternatives across categories ranging from pantry staples to personal-care products, boosting traffic at dollar stores such as Dollarama, which sells merchandise at price points of up to C$5.
The discount retailer expects annual comparable sales in Canada to grow between 4% and 4.5%, compared with its previous forecast of a 3% to 4% rise.
"At a time when households are making careful spending decisions, customers continued to count on Dollarama for dependable value," CEO Neil Rossy said.
Comparable sales at its Canadian stores rose 5.4% in the second quarter, driven by a 3.7% increase in customer traffic. Average transaction size increased 1.7%, from 2% growth in the prior quarter.
Dollarama maintained its outlook for Australia and said it expects the segment to post a net loss in fiscal 2027 as it continues to invest in business transformation initiatives.
Renewed trade tensions have added another layer of uncertainty for retailers. After the U.S. imposed 50% tariffs on C$27.6 billion worth of Canadian goods in August, Canada hit back with 15%, 25% and 50% levies on C$27.6 billion of U.S.-origin imports, including appliances, electronics, steel, dairy and agricultural equipment.
Dollarama sourced 54% of its Canadian procurement volume from North American vendors in fiscal 2026, while directly importing the remaining 46% from overseas suppliers, mostly in China, as of February 1.
The company posted quarterly earnings per share of C$1.29, while analysts estimated C$1.25, according to data compiled by LSEG.
Its second-quarter sales of C$2.03 billion ($1.46 billion) was largely in line with the estimate.
($1 = 1.3929 Canadian dollars)
(Reporting by Shania S Thomas in Bengaluru; Editing by Shilpi Majumdar)
