(Adds third-quarter details, capex forecast, company background)
Dec 6 (Reuters) - Canadian discount store chain Dollarama Inc on Thursday reported lower-than-expected quarterly profit and revenue, as it faces stiff competition from U.S.-based Dollar Tree Inc, which has been aggressively expanding in the country.
Dollarama, which operates more than 1,000 stores in the country, said same-store sales rose 3.1 percent in the third quarter, but its number of transactions declined by nearly 1 percent.
Dollar Tree sells everything for a fixed price of C$1.25, while Dollarama's products are priced in the range of C$1-C$4.
Dollarama, which kept prices in check during the quarter, said average transaction size rose 4 percent.
The Montreal-based company's net income rose 2.7 percent to C$133.5 million ($99.5 million), or 41 Canadian cents per share, in the quarter ended Oct. 28.
Analysts on average had expected the company to post a profit of 42 Canadian cents per share, according to IBES data from Refinitiv.
Total sales rose 6.6 percent to C$864.3 million, but missed analysts' average estimates of C$872.6 million.
For fiscal 2019, the company reduced its capital expenditure forecast to a range of C$180 million-C$190 million, from C$190 million-C$200 million. ($1 = C$1.34) (Reporting by Debroop Roy in Bengaluru; Editing by Maju Samuel)