(Bloomberg) -- Dollarama investors don't take kindly to average results.
Shares of Dollarama Inc., the Montreal-based retailer that's been adding stores throughout Canada, fell the most since December after it reported the lowest comparable-store sales growth in more than four years. Dollarama said poor April weather pushed back demand for summer goods such as hats and gardening tools. It maintained a full-year forecast of 4 percent to 5 percent growth.
“We're a month into the second quarter and we're seeing a catch up,” Chief Financial Officer Michael Ross said at a press conference after Dollarama's annual meeting. “Not too many retailers give you 4 to 5 percent outlook on same-store sales, that's pretty good.”
Dollarama shares soared more than 1,500 percent since the company went public in 2009 and investors have gotten used to a regular stream of good news. In the past, that's included sales growth above 4 percent and long-term plans to open 1,700 stores, 300 more than initially envisaged.
This time, comparable sales increased 2.6 percent in the quarter ended April 29, compared with 4.6 percent a year earlier. Shares dropped as much as 6.9 percent, and traded down 6 percent to C$147 at 11:48 a.m. in Toronto.
At its annual meeting, management paid tribute to founder Larry Rossy, a third-generation retailer who converted the small Quebec-based family chain to the dollar-store concept in 1992. He's retiring as chairman but will stay involved in the company. His son, Chief Executive Officer Neil Rossy, said he's not worried about delivering high-growth returns in coming years.
“Till 1,700 stores, we're safe,” he told reporters. “And then hopefully we'll have other strategies to help us continue our growth.”
--With assistance from Anne Riley Moffat.
To contact the reporter on this story: Sandrine Rastello in Montreal at srastello@bloomberg.net
To contact the editors responsible for this story: Crayton Harrison at tharrison5@bloomberg.net, David Scanlan, Carlos Caminada
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