Dollarama Sees Demand Cooling in Canada as Economic Strain Reaches Value Shoppers — Update

By Adriano Marchese

Dollarama is bracing for softer demand in Canada, a sign that the tougher economic backdrop is now weighing even on budget-conscious consumers.

The Canadian discount chain expects comparable store sales in Canada to rise between 3% and 4% in fiscal 2027, compared with 4.2% in the prior year.

FactSet-polled analysts expect same-store sales of 3.8%.

Rising economic uncertainty, most recently fueled by the U.S.-Israel conflict with Iran and the resulting spike in oil and gas prices, has been squeezing household budgets in recent weeks. Historically, Dollarama benefits when more shoppers trade-down or seek value in their day-to-day shopping.

The cooldown marks a shift in tone from the previous quarter when Chief Financial Officer Patrick Bui told analysts in a December call that economic performance in Canada was improving in the second half of fiscal 2026, prompting an upgrade for that year.

Shares fell Tuesday morning and were down 4.4% at C$178.47.

The company expects to open 60 to 70 new stores in fiscal 2027, compared with 75 in the previous year. Gross margin is expected to be between 45% and 45.5%, compared with 45.6% in fiscal 2026. Capital expenditures are also expected to rise to between C$420 million to C$470 million, up from C$252.6 million.

In the final 13-week quarter ended Feb. 1, Dollarama reported a 12% jump in sales to 2.1 billion Canadian dollars ($1.53 billion), topping analyst expectations.

In Canada, comparable store sales, determined on a 13-week basis, increased by 1.5%, compared to 4.9% growth in the fourth quarter of the previous year. Excluding the effects of the calendar shift, growth would have been 3.5%.

Net income came to C$392.5 million, or C$1.43 a share, up from C$391 million, or C$1.40 a share, in the prior-year period, which included an extra week in the quarter.

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

(END) Dow Jones Newswires

March 24, 2026 09:56 ET (13:56 GMT)