June 12 (Reuters) - Dollarama ( DLMAF ) posted an

increase in first-quarter sales and profit on Wednesday, as more

Canadians shopped at its stores for affordable groceries and

essentials.

Canadian consumers have been looking for affordable deals

and bargains for a wide range of products such as clothes,

groceries and cleaning supplies, as they grapple with higher

cost of living.

Constrained household budgets have encouraged more people to

visit discount stores such as Dollarama ( DLMAF ) and Dollar Tree ( DLTR )

, which sell essential products used by consumers at

competitive prices.

"We are seeing a progressive normalization in comparable

store sales, with growth primarily driven by persistent higher

than historical demand for core consumables and other everyday

essentials," CEO Neil Rossy said.

The Montreal-based discount store's sales rose 8.6% to

C$1.41 billion ($1.03 billion) in the quarter ended April 28,

compared with C$1.29 billion a year ago and in line with LSEG

estimates.

The company earned 77 Canadian cents per share compared with

63 Canadian cents a year ago. Analysts on average were expecting

a profit of 76 Canadian cents.

The retailer reaffirmed its annual comparable sales forecast

of growth between 3.5% and 4.5%.

Separately, Dollarama ( DLMAF ) said it had acquired an additional 10%

stake in Latin American value-retailer Dollarcity, increasing

its stake to 60.1%.

Dollarama ( DLMAF ), which is looking to expand its business in Latin

American countries and Mexico, said the deal is unlikely to

impact its net earnings per share for fiscal 2025.

($1 = 1.3747 Canadian dollars)