Dollarama profits increase as consumers make 'careful spending decisions'
Tomas Kauer 
Dollarama Inc. reported double-digit increases in sales and EBITDA in the second quarter as consumers search for value amid an inflationary environment.
The discount retailer on Wednesday released its earnings results for the quarter ending on Aug. 2, reporting a 17.6 per cent jump in sales to $2.03 billion from $1.72 billion in the previous year. Its EBITDA grew by 11 per cent to $653.0 million.
“At a time when households are making careful spending decisions, customers continued to count on Dollarama for dependable value,” chief executive Neil Rossy said during the company earnings call.
Rossy said that in Canada, despite a cautious consumer and continued pressure on household budgets, customers turned to Dollarama for their everyday needs during the second quarter.
The increase in sales was driven by a 5.4 per cent growth in comparable store sales in Canada, compared to 4.9 per cent in the previous year, as well as an increase in the total number of stores in Canada, as it opened 15 net new locations in the quarter.
Same-store sales were supported by an increase in customer traffic and basket growth, Rossy said, which brought the company’s same-store sales year-to-date above expectations for the first half of the year.
Demand for consumables and general merchandise was sustained, while demand for seasonal products remained stable year-over-year, he said.
The sales increase also was driven by the inclusion of a full quarter of sales in Australia compared to just a 13 day-period after its acquisition of The Reject Shop Ltd., now Dollarama Australia Pty Ltd., in the second quarter of the previous fiscal year.
The company’s net earnings climbed 8.7 per cent to $349.3 million, resulting in an 11.2 per cent increase in diluted net earnings per common share to $1.29, compared to $1.16 the prior year.
Its operating income increased by seven per cent to $517.3 million, representing an operating margin of 25.5 per cent, down from 28 per cent.
Following its second quarter results, Dollarama updated its guidance for same-store sales and new store openings for the fiscal year, initially issued in March, to reflect the company’s year-to-date performance.
It increased its range expectations for Canadian comparable store sales to between four and 4.5 per cent, up from the previous guidance of three to four per cent.
Rossy said that, given the retailer’s strong pace of openings through the first half of the year, they’ve increased the fiscal 2027 guidance to between 65 and 75 net new stores, up from the previous range of 60 to 70.
The new store openings in the second quarter brings its year-to-date net new openings to 43, for a total Canadian store count of 1,734 stores.
The CEO said the company expects consumers to remain thoughtful about their spending while continuing to seek value, as it continues to operate in an “uncertain environment.”
“In Canada, economic conditions remain challenging. Continued trade tensions and elevated living costs are pressuring consumers and weighing on the economic outlook,” Rossy said.
He added that direct tariff impact for Dollarama comes from Canadian counter-tariffs on a portion of the goods it purchases from the U.S. He said, as mentioned during the last round of counter-tariffs over a year ago, the company has the “agility” to navigate those measures and their financial impact remains manageable.
Rossy said geopolitical conflict also continues to create cost pressures across global supply chains, and the company is actively working to manage potential impacts through the second half of the year.
