MONTREAL — December 11, 2025 — Dollarama Inc. (TSX: DOL) is riding a powerful wave of value-hungry consumers, posting double‑digit sales growth, raising its 2026 outlook and sending its share price to fresh record territory after releasing fiscal 2026 third‑quarter results on Thursday. [1]
The Canadian discount retailer reported a strong earnings beat and lifted its sales and margin guidance for next year, as shoppers coping with stubborn inflation continue to trade down to lower‑priced essentials and seasonal goods. [2]
Q3 2026: Sales Surge 22% and Profit Jumps 17%
For the quarter ended November 2, 2025, Dollarama’s results underlined just how much momentum the chain has built at home and abroad: [3]
- Sales rose 22.2% to C$1.91 billion, up from C$1.56 billion a year earlier.
- Net earnings climbed 16.6% to C$321.7 million, compared with C$275.8 million in the prior‑year quarter.
- Diluted earnings per share (EPS) increased 19.4% to C$1.17, up from C$0.98.
Those numbers came in ahead of market expectations. Analysts had been looking for revenue of roughly C$1.87–C$1.89 billion and EPS around C$1.10–C$1.11, meaning Dollarama delivered both a top‑ and bottom‑line beat. [4]
Profitability also remained robust even as the company digested a major acquisition:
- EBITDA rose to C$612 million, a 20.1% increase year over year, for a margin of 32.1% (slightly lower than 32.6% a year earlier). [5]
- Operating income climbed 18.1% to C$481.2 million, with an operating margin of 25.2% versus 26.1% last year. [6]
The minor margin compression reflects the impact of a lower‑margin Australian business acquired earlier this year, which management says is still in the “layout and optimization” phase. [7]
Shoppers Trade Down: Comparable Sales Climb 6% in Canada
In its Canadian segment, Dollarama saw comparable store sales rise 6.0%, up from 3.3% in the same quarter last year. That increase was driven by: [8]
- A 4.1% jump in transaction counts – more people coming into stores.
- A 1.9% rise in average basket size – each visit is worth slightly more.
Management links the growth to persistent demand for consumables and strong seasonal performance, boosted this quarter by four extra Halloween shopping days versus 2024. [9]
With inflation in Canada still elevated in the near term, more shoppers are turning to discount chains for pantry staples, cleaning supplies and personal care products — trends also seen at U.S. names like Dollar Tree, Dollar General and Five Below, which have all reported strong earnings in recent weeks. [10]
International Expansion: Australia and Latin America Boost Growth
Dollarama’s rapid expansion outside Canada was a major contributor to its blockbuster top‑line growth.
Australia: The Reject Shop Joins the Fold
Following the acquisition of Australia’s The Reject Shop (TRS) in July 2025, the retailer now reports a distinct Australian segment. In Q3, that business: [11]
- Generated C$186.1 million in sales from 401 stores.
- Contributed C$18 million in EBITDA.
While profitable, the Australian unit currently carries lower margins than the Canadian operations, shaving roughly 100 basis points off group gross margin and about 240 basis points from the consolidated EBITDA margin. [12]
Dollarama has begun “laying the groundwork” to roll out its merchandising and sourcing model across TRS over the coming years, a process that could unlock additional efficiencies and higher margins if executed well. [13]
Dollarcity: Latin America and Mexico Power Ahead
The company’s majority‑owned Latin American partner Dollarcity also delivered another standout quarter. Dollarama’s share of Dollarcity’s net earnings jumped to C$42.4 million, up 56.5% year over year, driven by a 21.1% increase in Dollarcity sales and rapid store growth. [14]
As of September 30, 2025, Dollarcity operated 683 stores across Colombia, Guatemala, El Salvador and Peru, plus one in Mexico — and it has already crossed the 700‑store mark after quarter‑end, including a fifth location in Mexico. [15]
Taken together, the Australian and Latin American networks mean Dollarama is evolving from a purely domestic chain into a global value‑retail platform, giving it more levers for growth than many of its North American peers.
Guidance Raised: Stronger 2026 Outlook for Canada
On the back of its strong year‑to‑date performance, Dollarama raised its fiscal 2026 guidance for the Canadian segment, signalling confidence that demand for low‑priced everyday goods will remain resilient. [16]
The company now expects for Canada in fiscal 2026:
- Comparable store sales growth of 4.2% to 4.7%, up from a prior range of 3.0% to 4.0%.
- Gross margin between 45.0% and 45.5%, an increase from the earlier 44.2%–45.2% range.
- Capital expenditures of C$240 million to C$285 million, down from a previous C$285 million to C$330 million, mainly due to updated timing for a new Western logistics hub.
Plans for 70 to 80 net new stores in Canada are unchanged, reinforcing the chain’s long‑run store‑growth story. [17]
Notably, this guidance excludes contributions from the Australian operations, which management treats separately while it works through integration and repositioning. [18]
Capital Returns: Buybacks and a Higher Dividend
Dollarama continues to return significant cash to shareholders.
During the quarter, the company: [19]
- Repurchased about 2.61 million shares under its normal course issuer bid for C$484.6 million, at a weighted average price of roughly C$186 per share (excluding tax on share repurchases).
- Opened 19 net new Canadian stores and 6 net new Australian stores, continuing its long‑standing growth and renewal program. [20]
On Thursday, Dollarama’s board also approved a quarterly cash dividend of C$0.1058 per share, payable on February 6, 2026, to shareholders of record as of January 9, 2026. [21]
Market Reaction: Record High for Dollarama Shares
Investors rewarded the strong earnings print and upgraded outlook.
- On the Toronto Stock Exchange, Dollarama shares rose around 2.3% in early trading on Thursday, helping lift the consumer discretionary sector as the broader TSX touched a new intraday record high. [22]
- Yahoo Finance and other outlets highlighted that the stock pushed to an all‑time high after the guidance hike, underlining the market’s optimism about the retailer’s growth trajectory. [23]
Coming into the results, Dollarama shares had already been on a tear: as of December 10, the stock closed at about C$200.46, with a 52‑week high near C$204.35. [24] The latest rally likely nudges that record higher, reinforcing the stock’s status as one of the TSX’s standout consumer names this year. (That conclusion is based on prior closing levels and Thursday’s intraday percentage gain.) [25]
Analyst sentiment remains broadly positive, with an average 12‑month price target in the mid‑C$210s, implying further upside from current levels, though individual targets and ratings vary. [26]
Analysts: Another Strong Year, But Watch the Consumer
Equity analysts generally see the raised guidance as a sign that Dollarama is on track for another strong fiscal year, powered by enduring demand for low‑ticket essentials and the company’s disciplined cost control. [27]
At the same time, some caution that there are limits to how long consumers can trade down before overall spending softens, especially if economic growth slows or unemployment rises. [28]
Key themes analysts and investors will be watching:
- Consumer health in Canada: Dollarama benefits when budgets are tight, but a sharp downturn could eventually pressure volumes as well.
- Execution in Australia: TRS is still early in its transformation. Margin improvement will depend on how quickly Dollarama can roll out its sourcing, pricing and merchandising playbook there. [29]
- Dollarcity’s expansion pace: Latin America and Mexico offer significant white space, but logistics, currency volatility and political risk can all affect returns. [30]
What Today’s News Means for the Discount Retail Landscape
Dollarama’s blowout quarter lands just as discount retailers globally are enjoying a structural tailwind. In the United States, Dollar General, Dollar Tree and Five Below all recently reported strong earnings and raised guidance, supported by similar trends in deal‑seeking consumer behavior. [31]
For investors following the broader retail space, Dollarama’s Q3 2026 results highlight several takeaways:
- Value is still winning: Shoppers under price pressure continue to prioritize low prices over brand loyalty, giving scale discounters a powerful advantage. [32]
- Scale and sourcing matter: Dollarama’s ability to maintain mid‑40s gross margins in a discount format underscores the benefits of centralized buying, private‑label development and efficient logistics. [33]
- Global diversification is a growth catalyst — and a risk: Expansion into Australia and Latin America is boosting revenue and earnings, but also adds operational complexity, currency exposure and integration risk. [34]
For now, the story the market is telling is clear: strong numbers, raised guidance and a premium valuation suggest investors believe Dollarama can keep delivering growth even if the economic backdrop remains “unpredictable,” to borrow CEO Neil Rossy’s description of the environment. [35]
How long that momentum lasts will depend on whether Dollarama can continue balancing aggressive expansion with tight cost discipline — and whether cost‑conscious shoppers keep packing its stores in Canada, Australia and across Latin America.
References
1. markets.ft.com, 2. www.reuters.com, 3. markets.ft.com, 4. www.marketscreener.com, 5. markets.ft.com, 6. markets.ft.com, 7. www.nasdaq.com, 8. markets.ft.com, 9. markets.ft.com, 10. www.reuters.com, 11. www.nasdaq.com, 12. markets.ft.com, 13. markets.ft.com, 14. markets.ft.com, 15. markets.ft.com, 16. markets.ft.com, 17. markets.ft.com, 18. www.marketscreener.com, 19. markets.ft.com, 20. markets.ft.com, 21. markets.ft.com, 22. www.tradingview.com, 23. ca.finance.yahoo.com, 24. stockinvest.us, 25. www.tradingview.com, 26. www.tipranks.com, 27. www.marketscreener.com, 28. www.marketscreener.com, 29. markets.ft.com, 30. markets.ft.com, 31. www.investors.com, 32. www.reuters.com, 33. markets.ft.com, 34. markets.ft.com, 35. markets.ft.com
