#Canada #Montreal #Dollarama #Dollarcity #TRS

Dollarama's Strong Fiscal 2026 Third Quarter Results

Dollarama Inc. (TSX: DOL), a Canadian value retail giant, has released its financial results for the third quarter of fiscal 2026, revealing robust growth figures that underline the company’s resilient business model amidst a challenging economic landscape.

Financial Highlights

For the third quarter ending November 2, 2025, Dollarama experienced a staggering 22.2% growth in sales, reaching $1,909.4 million compared to $1,562.6 million in the same period the previous year. This surge was bolstered by significant contributions from 401 stores in Australia, following Dollarama's acquisition of The Reject Shop Limited (TRS) on July 21, 2025, which contributed $186.1 million to overall sales.

In Canada, comparable store sales—those stores that have been open for at least 13 months—grew by 6.0%, a notable increase from the 3.3% recorded in the preceding year’s third quarter. Driving this growth were customer demands for consumables as well as higher sales of seasonal items, aided by four additional Halloween shopping days.

Overview of Segments

Dollarama divides its operations into two main reportable segments: Canada and Australia. In the Canadian segment, the company recorded an EBITDA of $612.0 million with an EBITDA margin of 32.1%, comparing favorably to the 32.6% EBITDA margin in the same quarter for the previous fiscal year. Notably, this increase emphasizes the company's ability to maintain profitability in an ever-competitive retail environment.

On the other hand, costs associated with general and administration expenses rose, with the SGA (selling, general and administrative) expenses accounting for 15.4% of sales compared to 14.3% the previous year, largely driven by operational costs in Australia.

Earnings Growth

Net earnings for Dollarama increased by 16.6%, totaling $321.7 million for the quarter, translating to a diluted net earnings per common share of $1.17, a 19.4% rise compared to $0.98 for the same quarter the previous year. Notably, net financing costs also saw an uptick, reflecting higher average debt levels mostly due to the issuance of bonds during the preceding quarter.

Store Expansion Strategy

During this quarter, Dollarama successfully opened 19 net new stores in Canada and 6 net new stores across Australia under the TRS brand. This expansion underscores Dollarama’s commitment to growth and its intention to further entrench itself in both Canadian and Australian markets.

CEO Neil Rossy highlighted the company's promotional strategy amidst economic unpredictability, reiterating the relevance and resilience of Dollarama's operational model. As part of its growth plans, the company aims to leverage its brand presence internationally while optimizing operational improvements in local markets.

Dollarama's international venture, Dollarcity in Latin America, displayed significant performance, achieving its 700th store opening, particularly in Mexico. This expansion highlights not just corporate growth but also adaptability and strategic positioning in diverse markets.

Shareholder Returns and Future Outlook

On December 11, 2025, the board of directors declared a quarterly cash dividend of $0.1058 per common share, payable on February 6, 2026, signaling a commitment to continuing shareholder returns. This strategic decision reflects the company's strong earnings performance and operational success.

Looking forward, Dollarama has adjusted its guidance for comparable store sales in Canada to between 4.2% and 4.7% for fiscal 2026, indicating continued optimism about operational performance and customer engagement for the remaining months.

In summary, Dollarama’s third-quarter results for fiscal 2026 highlight the company’s strong market position and effective management strategies that have enabled significant growth. Despite external economic pressures, Dollarama remains poised for ongoing expansion and success within both Canadian and international retail landscapes.