Dollarama Inc. shares climbed June 8th, after the retailer reported slightly better-than-expected sales in the first quarter due to easing COVID-19 restrictions and high inflation driving stronger demand for affordable goods. The stock price increased 3.3% from a close of $69.81 on June 7th to $72.14 as of 12:06 p.m. June 8th. The Montreal-based firm reported that sales grew more than 12% cent to $1.07 billion in the first quarter ended May 1st. Analysts had been expecting sales of just over $1.03 billion.

Our strong performance across key metrics in the first quarter reflects the relevance of our business model and positive consumer response to our value proposition in a high-inflation environment,” Neil Rossy, president and CEO, said in a statement. Sales in the first quarter of the company’s 2023 financial year totalled $1.07 billion, up from $954.2 million.

The company also noted higher traffic in stores but reduced sizes of purchases, a reflection of a return to normal buying patterns. Stores saw an increase in shoppers and high demand for everyday consumables and seasonal products, said Dollarama president and CEO Neil Rossy during a call to discuss the company’s latest financial results. “It also echoes the positive consumer response to our value proposition in a high inflation environment.” The company posted a profit of $145.5 million, up from $113.6 million in the same quarter last year, as its sales rose 12.4%.

Dollarama announced plans to raise its maximum price to $5 earlier this year, but customers haven’t yet seen those prices in stores. Still, Rossy noted that the higher price point has enabled the company to return to selling popular products that had been moved off shelves amid rising costs and to introduce new products.

The discount retailer has fared better than some of its larger competitors, such as Walmart, as inflation drives consumers to seek out lower prices. The consumer price index rose 6.8% cent in April compared to a year ago, with food and shelter costs rising the most.

Shipping delays have become a pain point within the retail sector and Dollarama hasn’t been immune. Some products have been in transit for six to eight weeks. To combat delays, the company has invested in a 500,000-square-foot warehouse in Laval, Que., to house inventory and has already begun pre-ordering seasonal items ahead of the holidays.

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