Company Reports

Dollarama's second-quarter sales rose 17.6%, driven by 5.4% same-store sales growth. EBITDA margin fell 190 basis points to 32.2%, reflecting 110-basis-point headwinds to gross margin and SG&A, respectively, from a full quarter of Australia (10% of sales), partially offset by improvement in Canada.

As Canada's largest discount retailer, Dollarama is working to leverage its direct-sourcing expertise and dense domestic footprint to hold its cost edge, even as it navigates competitive pressures across general merchandise and explores international growth.

Dollarama’s strategy centers on pairing a curated assortment with low fixed price points and an efficient sourcing model, allowing it to profitably serve value-seeking consumers despite selling inexpensive merchandise. Its roughly 5,000 stock-keeping-units concentrate purchasing volumes alongside a largely shelf-stable assortment and dense store network, supporting attractive operating margins well above its grocery peers (roughly 20% higher), while keeping operating complexity low.

Dollarama's first-quarter results included 21.4% sales growth, driven by a 5.6% rise in same-store sales. EBITDA margin, however, contracted 100 basis points to 31.6% due to Australia's (10% of sales) mix headwinds and elevated operating expenses as the business transitions to Dollarama's sourcing.

We believe Canadian dollar store chain Dollarama has built a narrow economic moat around its business thanks to intangible assets and scale-driven cost advantages. This can be seen in its impressive record of strong sales expansion and steady margins, thanks to its ability to combine value and convenience that appeal to busy shoppers operating on a constrained budget.

Dollarama’s reported sales rose 12% in the fiscal 2026 fourth quarter on a 5% store base expansion, but EBITDA margin fell 170 basis points to 33.9%, as Australia negatively affected mix. The shares fell 9% on March 24 after the report.

We believe Canadian dollar store chain Dollarama has built a narrow economic moat around its business thanks to intangible assets and scale-driven cost advantages. This can be seen in its impressive record of strong sales expansion and steady margins, thanks to its ability to combine value and convenience that appeal to busy shoppers operating on a tight budget.

Dollarama’s sales rose 22% in the third quarter led by 6% same-store sales growth, a 5% rise in store count in Canada, and sales contribution from the acquisition in Australia. However, EBITDA rose only 20% as margins narrowed 50 basis points to 32.1% on an unfavorable mix from Australia.

We believe Canadian dollar store chain Dollarama has built a narrow economic moat around its business thanks to intangible assets and scale-driven cost advantages. This can be seen in its impressive record of strong sales expansion and steady margins, thanks to its ability to combine value and convenience that appeal to busy shoppers operating on a tight budget.

Dollarama’s sales rose 10.3% in the second quarter of fiscal 2026 led by 4.9% same-store sales growth and a 5.2% rise in store count in Canada. EBITDA rose 12% as margins widened 60 basis points to 34.1%. Shares fell 4% after the report on Aug. 27.

Dollarama’s sales rose 8% in the first quarter of fiscal 2026, led by 5% same-store sales growth. Adjusted operating profit grew 16% as margin expanded 160 basis points to 22.9%. The shares rose nearly 10% on June 11 after the report.

We believe Canadian dollar store chain Dollarama has built a narrow economic moat around its business thanks to intangible assets and scale-driven cost advantages. This can be seen in its impressive record of strong sales expansion and steady margins, thanks to its ability to combine value and convenience that appeal to busy shoppers operating on a tight budget.

Narrow-moat Dollarama posted better-than-expected fiscal 2025 results, with sales and earnings per share up 9% and 17%, respectively, outpacing our respective projections of 8% and 11%. We attribute the outperformance to the 4.6% comp sales growth (above our 4.5% estimate) and cost discipline.

We are encouraged by narrow-moat dollar store chain Dollarama’s announcement to build a new distribution center in Calgary by fiscal 2028. This should speed up store expansion in underpenetrated Western Canada and ease reliance on the traditional strongholds of Quebec and Ontario, where we see risks of saturation after 30 years of growth. That said, we expect only a slight uptick in our store count estimate, as the updated guidance for 2,200 stores by fiscal 2034 is less than 1% higher than the 2,186 stores we had penciled in at the end of the 10-year forecast period. This, coupled with earnings in the third quarter that should keep the retailer on track to meet our fiscal 2025 expectation for sales and earnings per share growth of 7% and 11%, respectively, have led us to leave our CAD 106 fair value estimate unchanged. Shares fell 6% on Dec. 4 but remained expensive, trading at over 30 times next year’s earnings.

We initiate coverage on Canadian dollar store chain Dollarama with a narrow economic moat rating based on the retailer’s intangible assets as well as cost advantages from its sourcing and distribution scale. Our fair value estimate stands at CAD 106 per share, which implies 16 times enterprise value to 2026 adjusted EBITDA. Shares look expensive trading at a 39% premium to our intrinsic valuation. Given the competitive intensity in retail, we don’t think the stock price has incorporated realistic growth and margin assumptions for the retailer in the coming years.

We believe Canadian dollar store chain Dollarama has dug a narrow economic moat around its business thanks to intangible assets and scale-driven cost advantages. This can be seen in its impressive track record of strong sales expansion and steady margins, thanks to its ability to combine value and convenience that appeal to busy shoppers operating on a tight budget.