#Canada #Montreal #Dollarama #Dollarcity #Reject Shop

Dollarama's Fiscal 2026 Second Quarter Performance

On August 27, 2025, Dollarama Inc. announced its financial results for the second quarter ending on August 3, 2025. This period marked a pivotal point for the company as it included the financial contributions from The Reject Shop Limited (TRS) following its acquisition on July 21, 2025. The Toronto Stock Exchange-listed Dollarama (TSX: DOL) introduced a dual-segment management approach, incorporating both Canadian and Australian operations.

Financial Highlights

The quarter showcased impressive financial growth with sales reaching $1,723.8 million, a 10.3% increase from $1,563.4 million in the same period last year. Canadian comparable store sales grew by 4.9%, further underpinning the company’s successful retail strategy. Notably, Dollarama opened 27 new stores throughout Canada, enhancing its local market reach.

Another key highlight was the company's EBITDA, which surged by 12.2% to $588.5 million, translating to an EBITDA margin of 34.1%. This showcases a competent growth trajectory in operational effectiveness. The reported operating income rose by 14.3% to $483.5 million, reflecting a robust operating margin of 28.0%.

Net earnings also experienced tremendous growth, rising 12.4% to $321.5 million. As a consequence, diluted net earnings per common share increased by 13.7%, amounting to $1.16, compared to $1.02 in the previous year.

International Expansion

Neil Rossy, President and CEO of Dollarama, commented on the remarkable quarter, emphasizing the importance of the company’s international expansion. The acquisition of TRS not only bolsters Dollarama's standing in Australia, but also marks a successful entry into new markets, such as Mexico with Dollarcity’s inaugural store. Rossy noted, “Our complementary international platforms strengthen and diversify our long-term growth strategy.”

The acquisition of TRS, which included 395 stores across Australia, contributed approximately $25.7 million in sales during the post-acquisition period, underscoring the strategic move to diversify Dollarama's retail portfolio.

Operational Insights

The company's strength in Canadian operations was manifested through continued strong demand for consumables and efficient execution. In the second quarter, comparable store sales growth was primarily driven by an increase in the number of transactions coupled with a modest rise in average transaction size.

Although the total gross margin increased to 45.5%—compared to 45.2% in the prior year—operating expenses also rose. General, administrative, and store operating expenses reached $241.2 million, reflecting a 13.3% increase compared to last year. This rise is largely attributed to the operational costs associated with the Australian segment.

Future Outlook

Dollarama anticipates maintaining its growth momentum, forecasting net new store openings in Canada between 70 and 80 stores for fiscal 2026. Their guidance reflects confidence in the ongoing customer response toward their value proposition in retail.

The corporation's effective tax rate showed an increase to 27.0%, up from 25.1% in the corresponding period last year, as the company adapted to new tax considerations following the TRS acquisition.

In conclusion, the second quarter of fiscal 2026 stands testament to Dollarama’s effective strategic initiatives, both locally and internationally. With optimistic forecasts for future growth, the company's dual-segment management structure is poised for success within the fast-evolving retail landscape.