Dollarama Reports Fiscal 2026 Third Quarter Results

Dollarama Inc. (TSX: DOL) ("Dollarama" or the "Corporation") today reported its financial results for the third quarter ended November 2, 2025. The Corporation has two reportable segments: Canada (which includes the contribution of the Corporation's equity-accounted investments in Latin America) and Australia since the completion of its acquisition of The Reject Shop Limited ("TRS") on July 21, 2025. Refer to "Selected Segmented Financial Information" on page 6 of this press release for additional information. Fiscal 2026 Third Quarter Results Highlights Compared to Fiscal 2025 Third Quarter Sales increased by 22.2% to $1,909.4 million, compared to $1,562.6 million In Canada, Comparable store sales increased by 6.0%, compared to 3.3% in the corresponding period of the previous year EBITDA(1) increased by 20.1% to $612.0 million, representing an EBITDA margin(1) of 32.1%, compared to 32.6% Operating income increased by 18.1% to $481.2 million, representing an operating margin(1) of 25.2%, compared to 26.1% Net earnings increased by 16.6% to $321.7 million, resulting in a 19.4% increase in diluted net earnings per common share to $1.17, compared to $0.98 19 net new stores opened in Canada, compared to 18 in the corresponding period of the previous year and 6 net new stores opened in Australia under the TRS banner 2,605,912 common shares repurchased for cancellation for $484.6 million "In an economic environment that has remained unpredictable, our business model continues to demonstrate its enduring relevance and resilience, driving strong 6.0% Comparable store sales growth in Canada for the quarter," said Neil Rossy, President and CEO of Dollarama. "Internationally, we also continued to advance our growth plans and the rollout of the Dollarama model. Dollarcity delivered another quarter of strong financial and footprint growth, opening their 700th store in Latin America and fifth location in Mexico after quarter-end. In Australia, we have begun laying the groundwork for The Reject Shop's transformation as we prepare the platform for the deployment of our value proposition in the coming years," concluded Mr. Rossy. ________________________________ (1) Refer to the section entitled "Non-GAAP and Other Financial Measures" of this press release for the definition of these items and, where applicable, their reconciliation with the most directly comparable GAAP measure. Fiscal 2026 Third Quarter Financial Results Sales for the third quarter of fiscal 2026 increased by 22.2% to $1,909.4 million, compared to $1,562.6 million in the corresponding period of the prior fiscal year. This increase was driven by a contribution of $186.1 million in sales from 401 stores in Australia, growth in the total number of stores in Canada over the past 12 months (from 1,601 on October 27, 2024, to 1,684 on November 2, 2025) and Comparable store sales growth in Canada. Comparable store sales in Canada for the third quarter of fiscal 2026 increased by 6.0%, consisting of a 4.1% increase in the number of transactions and a 1.9% increase in average transaction size, over and above Comparable store sales growth in Canada of 3.3% for the third quarter of fiscal 2025. The increase was primarily driven by sustained demand for consumables and higher sales of seasonal products including four additional Halloween shopping days, compared to the same period last year. As the Corporation continues to evaluate and implement strategies to optimize operations and deploy attributes of the Dollarama business model in Australia over the coming years, the Corporation is not currently presenting Comparable store sales information for this segment. Gross margin was 44.8% of sales in the third quarter of fiscal 2026, compared to 44.7% of sales in the third quarter of fiscal 2025. Gross margin as a percentage of sales was higher primarily as a result of a favourable sales mix, with higher sales of seasonal products and lower logistics costs in Canada, offset by a 100‑basis point impact from a lower gross margin in Australia. General, administrative and store operating expenses ("SG&A") for the third quarter of fiscal 2026 represented 15.4% of sales, compared to 14.3% of sales for the third quarter of fiscal 2025. This increase is primarily attributable to SG&A in Australia, impacting SG&A as a percentage of sales by 120 basis points, partially offset by the positive impact of scaling in Canada. EBITDA was $612.0 million, representing an EBITDA margin of 32.1% for the third quarter of fiscal 2026, compared to $509.7 million, or an EBITDA margin of 32.6% in the third quarter of fiscal 2025. EBITDA for the third quarter of fiscal 2026 includes a contribution of $18.0 million from the Australian segment, which negatively impacted EBITDA margin by 240 basis points. The Corporation's 60.1% share of net earnings from Central American Retail Sourcing Inc. ("CARS") and its 80.05% share of net earnings from Inversiones Comerciales Mexicanas S.A. ("ICM", and together with CARS and their respective subsidiaries, "Dollarcity") amounted to $42.4 million for the period from July 1, 2025 to September 30, 2025, compared to $27.1 million for the Corporation's 60.1% share of CARS from July 1, 2024 to September 30, 2024, representing a 56.5% year-over-year increase. Dollarcity's strong third quarter performance was mainly driven by a 21.1% increase in sales, primarily attributable to an increase in Comparable store sales and in total number of stores (from 588 on September 30, 2024, to 683 on September 30, 2025), as well as an increase in gross margin as a percentage of sales from lower logistics costs. This was partially offset by a slight increase in SG&A as a percentage of sales from costs associated with Dollarcity's expansion plans in Mexico. The Corporation's investment in Dollarcity is accounted for as a joint arrangement using the equity method. Net financing costs increased by $7.4 million, from $41.6 million for the third quarter of fiscal 2025 to $49.0 million for the third quarter of fiscal 2026. The increase primarily reflects higher average debt levels resulting from the issuance of the 3.850% Fixed Rate Notes (defined hereinafter) during the second quarter of fiscal 2026, an increase in interest expense on lease liabilities from the Canadian segment and an impact of $2.8 million from the Australian segment. Net earnings increased by 16.6% to $321.7 million, compared to $275.8 million in the third quarter of fiscal 2025, resulting in an increase in diluted net earnings per common share of 19.4%, to $1.17 per diluted common share, in the third quarter of fiscal 2026, including a negative impact of $0.03 per diluted common share from the Australian segment. Dollarcity Mexico Capital Call During the quarter, the Corporation used proceeds from its 60.1% share of the dividend previously declared by CARS, representing US$37.6 million, to make a second capital contribution of US$18.0 million ($24.5 million) to ICM towards expansion plans in Mexico, reflecting the Corporation's 80.05% ownership interest in ICM. Network Growth During its third quarter ended September 30, 2025, Dollarcity opened 25 net new stores, compared to 18 net new stores in the same period last year. As at September 30, 2025, Dollarcity had a total of 683 stores, with 398 locations in Colombia, 113 in Guatemala, 91 in Peru, 80 in El Salvador, and 1 in Mexico. This compares to 632 stores as at December 31, 2024. Normal Course Issuer Bid On July 3, 2025, the Corporation announced the renewal of its normal course issuer bid and approval from the Toronto Stock Exchange to repurchase up to 13,865,588 of its common shares, representing 5.0% of the issued and outstanding common shares of the Corporation as at June 30, 2025, during the 12‑month period from July 7, 2025 to July 6, 2026 (the "2025-2026 NCIB"). During the third quarter of fiscal 2026, 2,605,912 common shares were repurchased for cancellation under the 2025‑2026 NCIB, for a total cash consideration of $484.6 million, representing a weighted average price of $185.96 per share, excluding the tax on share repurchases. Dividend On December 11, 2025, the Corporation announced that its board of directors approved a quarterly cash dividend for holders of common shares of $0.1058 per common share. This dividend is payable on February 6, 2026 to shareholders of record at the close of business on January 9, 2026. The dividend is designated as an "eligible dividend" for Canadian tax purposes. Canadian Segment Fiscal 2026 Outlook The Corporation's fiscal 2026 guidance ranges for Comparable store sales and Gross margin in Canada, initially issued on April 3, 2025, have been increased to reflect year-to-date performance and anticipated continued positive customer response to our product offering in the fourth quarter of fiscal 2026. Capital expenditures guidance for the Canadian segment, which was previously updated on June 11, 2025, has also been lowered to reflect updated timing of certain expenditures related to the development of the Western logistics hub. All other guidance ranges and underlying assumptions remain unchanged. (as a percentage of sales except netnew store openings in units and capital expenditures in millions of dollars) Fiscal 2026 Fiscal 2026 Guidance for the Canadian segment asat June 11, 2025 Revised Guidance for the Canadiansegment as at December 11, 2025 Net new store openings 70 to 80 No change Comparable store sales 3.0% to 4.0% 4.2% to 4.7% Gross margin 44.2% to 45.2% 45.0 to 45.5% SG&A 14.2% to 14.7% No change Capital expenditures $285.0 to $330.0 $240.0 to $285.0 As the Corporation continues to evaluate and implement strategies to optimize operations and deploy attributes of the Dollarama business model in Australia over the coming years, the Corporation is not providing guidance that takes into account or presents separately the Australian segment. However, with its plan relating to the implementation of such strategies, the Corporation does not expect the Australian segment to have a positive impact on its overall profitability in the near term, including fiscal 2027. Guidance ranges for the Canadian segment are based on several assumptions, including the following: The number of signed offers to lease and store pipeline for the remainder of fiscal 2026, the absence of delays outside of our control on construction activities and no material increases in occupancy costs in the short- to medium-term Approximately three months visibility on open orders and product margins Continued positive customer response to our product offering, value proposition and in-store merchandising The active management of product margins, including through pricing strategies and product refresh, and of inventory shrinkage The Corporation continuing to account for its investment in Dollarcity as a joint arrangement using the equity method The entering into of foreign exchange forward contracts to hedge the majority of forecasted merchandise purchases in USD against fluctuations of CAD against USD The continued execution of in-store productivity initiatives and realization of cost savings and benefits aimed at improving operating expense The absence of a significant shift in labour, economic and geopolitical conditions, or material changes in the retail environment and projected census and household income data No significant changes in the capital budget for fiscal 2026 for new store openings and maintenance, and no further changes to transformational capital expenditures The absence of unusually adverse weather, especially in peak seasons around major holidays and celebrations The guidance ranges included in this section are forward-looking statements within the meaning of applicable securities laws, are subject to a number of risks and uncertainties and should be read in conjunction with the "Forward-Looking Statements" section of this press release. Selected Consolidated Financial Information 13-week periods ended 39-week periods ended (dollars and shares in thousands,except per share amounts) November 2, 2025 October 27, 2024 November 2, 2025 October 27, 2024 $ $ $ $ Earnings Data Sales 1,909,442 1,562,644 5,154,490 4,531,800 Cost of sales 1,053,641 863,928 2,841,889 2,518,613 Gross profit 855,801 698,716 2,312,601 2,013,187 SG&A 294,780 223,519 769,460 653,631 Depreciation and amortization 122,244 94,788 310,746 279,041 Share of net earnings of equity- accounted investments (42,418) (27,083) (121,060) (71,871) Operating income 481,195 407,492 1,353,455 1,152,386 Unrealized gain from derivative on equity-accounted investments - - (10,348) - Net financing costs 48,967 41,603 136,096 119,065 Earnings before income taxes 432,228 365,889 1,227,707 1,033,321 Income taxes 110,504 90,083 310,729 255,730 Net earnings 321,724 275,806 916,978 777,591 Basic net earnings per common share $1.17 $0.98 $3.32 $2.78 Diluted net earnings per common share $1.17 $0.98 $3.31 $2.77 Weighted average number of common shares outstanding: Basic 274,963 281,356 276,336 280,079 Diluted 276,032 282,349 277,402 281,075 Other Consolidated Data Year-over-year sales growth 22.2 % 5.7 % 13.7 % 7.2 % Gross margin (1) 44.8 % 44.7 % 44.9 % 44.4 % SG&A as a % of sales (1) 15.4 % 14.3 % 14.9 % 14.4 % EBITDA (1) 612,037 509,677 1,696,684 1,451,725 Operating margin (1) 25.2 % 26.1 % 26.3 % 25.4 % Capital expenditures 68,447 51,018 175,232 151,237 Declared dividends per common share $0.1058 $0.0920 $0.3174 $0.2760 As at (dollars in thousands) November 2, 2025 February 2,2025 $ $ Statement of Financial Position Data Cash and cash equivalents 205,521 122,685 Inventories 1,178,880 921,095 Total current assets 1,495,368 1,201,280 Property, plant and equipment 1,206,847 1,046,390 Right-of-use assets 2,379,873 2,109,445 Total assets 7,400,996 6,482,592 Total current liabilities 1,373,886 1,014,306 Total non-current liabilities 4,729,087 4,280,028 Total debt (1) 2,644,593 2,282,679 Net debt (1) 2,439,072 2,159,994 Shareholders' equity 1,298,023 1,188,258 (1) Refer to the section entitled "Non-GAAP and Other Financial Measures" of this press release for the definition of these items and, where applicable, their reconciliation with the most directly comparable GAAP measure. Selected Segmented Financial Information (dollars in thousands) 13-week period ended November 2, 2025 39-week period ended November 2, 2025 Canada Australia Total Canada Australia (4) Total $ $ $ $ $ $ Earnings Data Sales 1,723,339 186,103 1,909,442 4,942,654 211,836 5,154,490 Cost of sales (5) 934,395 119,246 1,053,641 2,706,458 135,431 2,841,889 Gross profit 788,944 66,857 855,801 2,236,196 76,405 2,312,601 SG&A 244,027 50,753 294,780 712,205 57,255 769,460 Depreciation and amortization 96,727 25,517 122,244 282,146 28,600 310,746 Share of net earnings of equity- accounted investments (42,418) - (42,418) (121,060) - (121,060) Operating income (loss) 490,608 (9,413) 481,195 1,362,905 (9,450) 1,353,455 Unrealized gain from derivative on equity-accounted investments - - - (10,348) - (10,348) Net financing costs 46,151 2,816 48,967 132,942 3,154 136,096 Income taxes 114,183 (3,679) 110,504 314,522 (3,793) 310,729 Net earnings (loss) 330,274 (8,550) 321,724 925,789 (8,811) 916,978 Other Segmented Data Comparable store sales growth (1) 6.0 % - (3) 5.3 % - (3) Capital expenditures 60,062 8,385 166,414 8,818 Number of stores (2) 1,684 401 1,684 401 Average store size (gross square feet) (2) 10,446 7,664 10,446 7,664 (1) Refer to the section entitled "Non-GAAP and Other Financial Measures" of this press release for the definition of these items and, where applicable, their reconciliation with the most directly comparable GAAP measure. (2) At the end of the period. (3) As the Corporation continues to evaluate and implement strategies to optimize operations and deploy attributes of the Dollarama business model in Australia over the coming years, the Corporation is not currently presenting Comparable store sales information for this segment. (4) Representing results from July 22, 2025, following the closing of the acquisition of TRS by the Corporation on July 21, 2025. (5) For the 13-week period ended November 2, 2025, Cost of sales included depreciation and amortization for the Canadian and Australian segments of $6,675 and $1,923, respectively. For the 39-week period ended November 2, 2025, Cost of sales included depreciation and amortization for the Canadian and Australian segments of $19,984 and $2,151, respectively. Non-GAAP and Other Financial Measures The Corporation prepares its financial information in accordance with GAAP. Management has included non‑GAAP and other financial measures to provide investors with supplemental measures of the Corporation's operating and financial performance. Management believes that those measures are important supplemental metrics of operating and financial performance because they eliminate items that have less bearing on the Corporation's operating and financial performance and thus highlight trends in its core business that may not otherwise be apparent when relying solely on GAAP measures. Management also believes that securities analysts, investors and other interested parties frequently use non-GAAP and other financial measures in the evaluation of issuers. Management also uses non-GAAP and other financial measures to facilitate operating and financial performance comparisons from period to period, to prepare annual budgets and to assess their ability to meet the Corporation's future debt service, capital expenditure and working capital requirements. The below-described non-GAAP and other financial measures do not have a standardized meaning prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other issuers and should be considered as a supplement to, not a substitute for, or superior to, the comparable measures calculated in accordance with GAAP. (A) Non-GAAP Financial Measures EBITDA EBITDA represents net earnings plus income taxes, net financing costs and depreciation and amortization and includes the Corporation's share of net earnings of its equity-accounted investments. Management believes EBITDA measure represents a supplemental metric to assess the operational profitability of the underlying core operations. The Corporation also calculates EBITDA excluding unrealized gain from derivative on equity-accounted investments, in order to exclude the impact of the option to purchase an additional 9.89% equity interest in CARS and a corresponding proportionate 4.945% equity interest in ICM (the "Call Option"), as it does not reflect ongoing operations of the Corporation and should not, in management's view, be considered in a long-term assessment of the operational profitability of the underlying core operations of the Corporation. A reconciliation of net earnings to EBITDA is included below: 13-week periods ended 39-week periods ended (dollars in thousands) November 2, 2025 October 27, 2024 November 2, 2025 October 27, 2024 $ $ $ $ Net earnings 321,724 275,806 916,978 777,591 Add: Income taxes 110,504 90,083 310,729 255,730 Net financing costs 48,967 41,603 136,096 119,065 Depreciation and amortization 130,842 102,185 332,881 299,339 EBITDA 612,037 509,677 1,696,684 1,451,725 Unrealized gain from derivative on equity-accounted investments - - (10,348) - EBITDA excluding unrealized gain from derivative on equity- accounted investments 612,037 509,677 1,686,336 1,451,725 Total debt Total debt represents the sum of long-term debt (including unamortized debt issue costs, accrued interest and fair value hedge – basis adjustment), short-term borrowings under the US commercial paper program, long‑term financing arrangements and other bank indebtedness, including credit facilities. Management believes Total debt is a measure that is useful to facilitate the understanding of the Corporation's corporate financial position in relation to its financing obligations. A reconciliation of long-term debt to total debt is included below: As at (dollars in thousands) November 2, 2025 February 2, 2025 $ $ Credit Facilities Dollarama Credit Facility - - TRS Credit Facilities, including interchangeable facility and seasonal facility 18,332 - Senior Unsecured Notes Senior unsecured notes (the "Fixed Rate Notes") bearing interest at: Fixed annual rate of 3.850%, maturing December 16, 2030 (the "3.850% Fixed Rate Notes") 600,000 - Fixed annual rate of 5.165%, maturing April 26, 2030 450,000 450,000 Fixed annual rate of 2.443%, maturing July 9, 2029 375,000 375,000 Fixed annual rate of 5.533%, maturing September 26, 2028 500,000 500,000 Fixed annual rate of 1.505%, maturing September 20, 2027 300,000 300,000 Fixed annual rate of 1.871%, maturing July 8, 2026 375,000 375,000 Fixed annual rate of 5.084%, maturing October 27, 2025 - 250,000 Unamortized debt issue costs, including $1,453 (February 2, 2025 – $1,219) for the Dollarama Credit Facility (8,670) (7,092) Accrued interest on the Fixed Rate Notes 17,436 22,330 Long-term financing arrangement 5,271 5,080 Fair value hedge – basis adjustment on interest rate swap 12,224 12,361 Total debt 2,644,593 2,282,679 Net debt Net debt represents total debt minus cash and cash equivalents. Management believes Net debt represents a useful additional measure to assess the financial position of the Corporation by showing all of the Corporation's financing obligations, net of cash and cash equivalents. A reconciliation of total debt to net debt is included below: As at (dollars in thousands) November 2, 2025 February 2, 2025 $ $ Total debt 2,644,593 2,282,679 Cash and cash equivalents (205,521) (122,685) Net debt 2,439,072 2,159,994 (B) Non-GAAP Ratios Adjusted net debt to EBITDA ratio Adjusted net debt to EBITDA ratio is a ratio calculated using adjusted net debt over consolidated EBITDA for the last twelve months. Management uses this ratio to partially assess the financial condition of the Corporation. An increasing ratio would indicate that the Corporation is utilizing more debt per dollar of EBITDA generated. A calculation of adjusted net debt to EBITDA ratio is included below: As at (dollars in thousands) November 2, 2025 February 2, 2025 $ $ Net debt 2,439,072 2,159,994 Lease liabilities 2,743,864 2,426,977 Unamortized debt issue costs, including $1,453 (February 2, 2025 – $1,219) for the credit facility 8,670 7,092 Fair value hedge – basis adjustment on interest rate swap (12,224) (12,361) Adjusted net debt 5,179,382 4,581,702 EBITDA for the last twelve-month period(1) 2,451,542 2,121,829 Adjusted net debt to EBITDA ratio 2.11x 2.16x (1) This amount corresponds to the EBITDA of the Corporation for the last twelve months, which was equal to $2,366,788 and includes the results of TRS from July 22, 2025 to November 2, 2025, plus the EBITDA of TRS for the period between October 28, 2024 until closing of the TRS acquisition on July 21, 2025 (as calculated and reported by TRS), which was equal to $84,754. EBITDA margin EBITDA margin represents EBITDA divided by sales. Management believes that this measure is useful in assessing the performance of ongoing operations and efficiency of operations relative to its sales. The Corporation also calculates EBITDA margin excluding unrealized gain from derivative on equity-accounted investments, in order to exclude the impact of the Call Option, given the Call Option does not reflect ongoing operations of the Corporation and should not, in management's view, be considered in a long-term assessment of the operational profitability of the underlying core operations of the Corporation. A reconciliation of EBITDA to EBITDA margin is included below: 13-week periods ended 39-week periods ended (dollars in thousands) November 2, 2025 October 27, 2024 November 2, 2025 October 27, 2024 $ $ $ $ EBITDA 612,037 509,677 1,696,684 1,451,725 Sales 1,909,442 1,562,644 5,154,490 4,531,800 EBITDA margin 32.1 % 32.6 % 32.9 % 32.0 % EBITDA excluding unrealized gain from derivative on equity- accounted investments 612,037 509,677 1,686,336 1,451,725 Sales 1,909,442 1,562,644 5,154,490 4,531,800 EBITDA margin, excluding unrealized gain from derivative on equity‑accounted investments 32.1 % 32.6 % 32.7 % 32.0 % (C) Supplementary Financial Measures Gross margin Represents gross profit divided by sales, expressed as a percentage of sales. Operating margin Represents operating income divided by sales, expressed as a percentage of sales. SG&A as a % of sales Represents SG&A divided by sales. Comparable storesales Represents sales of stores, including relocated and expanded stores, open for at least 13 complete fiscal months relative to the same period in the prior fiscal year. Comparable storesales growth Represents the percentage increase or decrease, as applicable, of comparable store sales relative to the same period in the prior fiscal year. Forward-Looking Statements Certain statements in this press release... Read more

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