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UPDATE 2-Dollarama stumbles as fresh COVID-19 curbs hit sales momentum

(Adds shares, details on sales, profit comparison and ban on non-essential goods)

June 9 (Reuters) - Dollarama Inc said on Wednesday its current-quarter earnings would take a hit from fresh COVID-19 restrictions in certain Canadian provinces, after missing expectations for the first quarter.

Provincial governments in Canada reintroduced stringent curbs in April, including in-store capacity limits and a temporary ban on the sale of discretionary goods, slowing Dollarama’s sales momentum in the quarter to May 2.

The discount store operator’s same-store sales jumped 15.2% in the nine-week period ended April 4 but ended the quarter with just a 5.8% increase.

The curbs also meant Montreal-based Dollarama had to focus on selling lower-margin products, such as groceries and cleaning products, instead of typically higher-margin non-essential items in the key market of Ontario.

Dollarama said the restrictions, which will lift on Aug. 1, would impact its performance for the first five and a half weeks of the current quarter.

The company’s total sales rose 13% to C$954.2 million ($789.97 million) in the first quarter, falling short of a Refinitiv IBES estimate of C$963 million.

Net earnings came in at 37 Canadian cents per share, while analysts expected a figure of 38 Canadian cents per share.

Shares in Dollarama have jumped about 5% this year.

$1 = 1.2079 Canadian dollars Reporting by Praveen Paramasivam in Bengaluru; Editing by Aditya Soni

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