Canadian discount giant Dollarama Inc. raised its dividend Tuesday despite bad weather hitting store traffic during the fourth quarter.

The retailer announced it was raising its quarterly dividend to 12 cents per share, up from 10.58 cents per share while releasing

results for the quarter ending Feb. 1. Shares dropped more than 7 per cent after the release. The company reported a $2.1 billion or a 11.7 per cent increase in sales for the quarter, up from $1.88 billion in the prior year.

Canadian comparable store sales were up 1.5 per cent, which the company said was driven by demand for seasonal products, but offset by the impact of the calendar shift and “unfavourable weather conditions negatively impacting store traffic during historically strong sales weeks.”

This consisted of a 1.6 per cent drop in the number of transactions and a 3.1 per cent increase in average transaction size.

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Dollarama’s EBITDA for the quarter was $711.5 million, up from $670.1 million in the previous year. This represented an EBITDA margin of 33.9 per cent, down from 35.6 per cent.

The company said the EBITDA margin was negatively impacted by its Australian segment by 240 basis points, representing $37.1 million.