Canada’s Dollarama (DOL.TO), beat quarterly sales and profit estimates on Wednesday, as consumers favored discounted alternatives for household supplies and groceries amid domestic economic uncertainty.

Toronto-listed shares of the company rose nearly 9% after CEO Neil Rossy said that the company will continue to hold on its current price “for as long as possible” and adjustments to product prices will be a “last resort.”

Canadian consumers are relying on cheaper offerings across categories, ranging from pantry staples to cleaning supplies, as they curtail household spending amid economic uncertainties, benefiting dollar store operators like Dollarama.

A price hike would likely curtail demand, and Dollarama said it expected to take a margin hit from counter tariffs imposed by Canada on a portion of goods from the United States.

About 53% of the products it sells were procured from North American vendors while other overseas imports accounted for 47% of total procurement.

Dollarama reported comparable store sales of 4.9%, above estimates of 3.4% in the quarter ended May 4, according to data compiled by LSEG.

First-quarter net sales of C$1.52 billion ($1.11 billion) narrowly beat analysts’ estimates of C$1.5 billion.

The company’s net earnings per share of 98 Canadian cents beat analysts’ expectations of 84 Canadian cents.

Dollarama also reaffirmed its annual comparable sales expectations of a 3% to 4% rise.

However, TD Cowen analyst Brian Morrison sees a potential for Dollarama to raise its forecast in the second half of the fiscal year, saying that the company continues to “underpromise and overdeliver.”

In the U.S., off-price and discount retailers have painted a mixed picture as American consumers have turned cautious and limited their purchases.

Dollar General (DG.N), and Dollar Tree (DLTR.O), raised their annual forecasts while Ross Stores (ROST.O), withdrew its fiscal 2025 forecasts.

($1 = 1.3682 Canadian dollars)

Author Credits- Neil J Kanatt
Reuters