DOLLARAMA REPORTS FOURTH QUARTER AND FISCAL YEAR 2026 RESULTS
Executive Summary
- Dollarama reported FY 2026 sales of $7.26 B (+13.1% YoY) and net earnings of $1.31 B (+12.1% YoY), beating its own guidance on all metrics.
- Comparable store sales grew 4.2% in Canada for the full year; 75 net new Canadian stores were opened in FY 2026, plus 7 net new Australian stores after the TRS acquisition.
- The company announced a 13.4% increase to its quarterly cash dividend (to $0.1200 per share) and reaffirmed FY 2027 guidance, projecting 3‑4% comparable sales growth in Canada and a net loss for the Australian segment as it undergoes transformation.
Key Details
- Quarterly Highlights (Q4 FY 2026):
- Sales: $2.101 B (+11.7% YoY).
- EBITDA: $711.5 M (33.9% margin, down from 35.6%).
- Operating income: $584.4 M (27.8% margin).
- Net earnings: $392.5 M; diluted EPS $1.43 (+2.1%).
- Store activity: 7 net new Canadian stores; 1 net new Australian store.
-
Share repurchases: 888,309 shares for $174.8 M.
-
Full‑Year Highlights (FY 2026):
- Sales: $7,255.8 M (+13.1% YoY).
- EBITDA: $2,408.2 M (33.2% margin).
- Operating income: $1,937.9 M (26.7% margin).
- Net earnings: $1,309.4 M; diluted EPS $4.73 (+13.7%).
-
Share repurchases: 4,426,267 shares for $834.2 M (avg. $188.47/share).
-
Store Network Expansion:
- Canada: 75 net new stores FY 2026 (total ~1,691).
- Australia (post‑TRS): 7 net new stores FY 2026; total 402 stores.
-
Dollarcity (Latin America joint venture): 49 net new stores Q4 2025; 100 net new stores FY 2025; total 732 stores across five countries.
-
International Segment Performance:
- Dollarcity contributed $70.5 M of equity‑accounted earnings (Oct 1 2025–Dec 31 2025), a 21.6% YoY increase.
-
Australian segment added $243.0 M sales from 402 stores; gross margin pressure lowered overall gross margin to 45.0% (down 10 bps).
-
Financing Activity:
- Issued 3.850% Fixed‑Rate Notes (CAD 600 M) in Q2 FY 2026, raising net debt to $2.625 B.
-
Net financing costs rose to $47.9 M for Q4 and $184.0 M for FY 2026.
-
Dividends & Capital Allocation:
- Quarterly cash dividend increased 13.4% to $0.1200 per share (payable May 8, 2026).
-
Dividend from Dollarcity’s CARS investment: US$75.1 M expected Q1 FY 2027; partially used for a US$38.0 M capital call into ICM (Mexico).
-
Fiscal 2027 Outlook:
- Canadian comparable store sales forecast: 3‑4% growth.
- Gross margin target Canada: 45.0‑45.5%; SG&A 14.1‑14.6%.
- Expected net new Canadian stores: 60‑70 (down from FY 2026’s 75).
-
Australian segment projected to incur a net loss while transitioning product mix and renovating 60‑80 stores.
-
Management Commentary:
- CEO Neil Rossy highlighted meeting/exceeding guidance despite adverse weather, the successful expansion into Mexico, and the ongoing integration of Dollarcity and The Reject Shop acquisitions.
Notable Quotes
“We have met or exceeded our guidance for Fiscal 2026 on all metrics…our compelling year‑round value continued to resonate with Canadians.” – Neil Rossy, President & CEO
“Fiscal 2026 was also a milestone year for our international expansion…we will continue pursuing disciplined profitable growth…” – Neil Rossy, President & CEO