Dollarama Lifts Fiscal-Year Outlook as Canadian Shoppers Drive Strong 3Q — Update

By Adriano Marchese

Dollarama raised its targets for the year after a strong third quarter, as robust consumer demand in Canada drove higher traffic and spending across its stores.

"Budgets are being stretched and people are seeking value, that's where we're hitting the mark," Financial Chief Patrick Bui said on an investor call. Same-store sales in Canada rose 6% in the quarter, fueled by greater demand for consumables such as food, beverages and household products, as well as seasonal items like Halloween supplies.

Shoppers also visited stores more frequently and spent more per trip. Transactions increased 4.1% and average basket size was 1.9% larger. "If you look at the patterns of our business, traffic remains healthy," Bui said.

The Montreal company, which is Canada's largest dollar-store chain, operates about 1,600 stores in the country, 700 stores across Latin America through its majority-owned Dollarcity banner--including five in Mexico where it launched in June--and about 400 stores in Australia.

Dollarama said comparable-store sales for the fiscal year are now expected to range from 4.2% to 4.7%, up from a previous range of 3% to 4%. The company also lifted gross-margin targets to 45% to 45.5%, up from a previous range of 44.2% to 45.2%, citing the resiliency of Canadian shoppers.

Quarterly sales rose 22%, to 1.91 billion Canadian dollars (US$1.38 billion), ahead of the C$1.89 billion expected by analysts polled by FactSet.

Net income rose to C$321.7 million, or C$1.17 a share, in the quarter ended Nov. 2, up from C$275.8 million, or C$0.98 a share, in the comparable quarter a year earlier. Analysts expected earnings of C$306.3 million, or C$1.11 a share, according to FactSet.

Shares have performed well in 2025, rising about 41% since the start of the year. They recently traded at C$197.81 a share, down 1.3%.

Bui said the company has begun laying the groundwork in Australia for the transformation of The Reject Shop after acquiring the chain earlier in the year. On the call Thursday, he said fiscal-year 2027 would be a year of heavy investment in the country while it brings the business in-line with the broader Dollarama business model.

In Latin America, the business continues to grow. The share of Dollarama's earnings from Dollarcity rose to C$42.4 million between July 1 to Sept. 30, from C$27.1 million a year earlier thanks to a 21% jump in sales and lower logistic costs that lifted margins.

For the fiscal year, Dollarama pared its expectations for capital expenditures to a range of C$240 million to C$285 million--compared with C$285 million to C$330 million previously--with the company attributing the cut to the timing of certain expenses related to the development of the Western logistics hub.

Write to Adriano Marchese at adriano.marchese@wsj.com

(END) Dow Jones Newswires

December 11, 2025 13:02 ET (18:02 GMT)