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1. Company Snapshot

1.a. Company Description

Dollarama Inc.operates a chain of dollar stores in Canada.Its stores offer general merchandise, consumables, and seasonal products.


The company also sells its products through online store.As of January 30, 2022, it operated 1,421 stores.The company was formerly known as Dollarama Capital Corporation and changed its name to Dollarama Inc.


in September 2009.Dollarama Inc.was founded in 1992 and is headquartered in Montreal, Canada.

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1.b. Last Insights on DOL

Dollarama Inc.'s recent performance was driven by its strong retail investor base, with 55% of shares owned by individual investors. This indicates significant control and influence over the company's direction. Additionally, the company's upcoming earnings release on April 3, 2025, for the fourth quarter and fiscal year 2025, is expected to provide insight into its financial performance. The company has also been focused on its operations and has been exploring opportunities to enhance its value proposition for customers.

1.c. Company Highlights

2. Dollarama's Q3 FY2026 Earnings: A Strong Performance

Dollarama's third-quarter fiscal 2026 results showcased a robust top-line performance and double-digit earnings growth, with EPS increasing by nearly 20% to $1.17. Total sales rose more than 22% to over $1.9 billion, driven by the Australian segment, Canadian same-store sales, and store network growth. The company's EBITDA increased by 20.1% to $612 million, and net earnings increased by 16.6% to $321.7 million. The actual EPS came out at $1.15, beating estimates at $1.09.

Publication Date: Dec -20

📋 Highlights
  • Strong Sales & EPS Growth:: Total sales surged 22% to $1.9B; EPS rose 19.4% to $1.17 driven by Canadian same-store sales (6%), Australian segment, and store growth.
  • Store Expansion Momentum:: Opened 19 net new Canadian stores (total 1,684) and 25 in Latin America (total 683), reflecting regional expansion success.
  • Gross Margin Expansion:: Canadian segment gross margin hit 45.8%, while consolidated margin stood at 44.8%, aided by logistics cost discipline and productivity gains.
  • Capital Allocation Strategy:: Repurchased $884.6M in shares (~2.6M shares) and raised annual dividends; maintained 2-dividend policy with Mexico capital contributions.
  • Guidance & Strategic Focus:: Raised full-year Canadian gross margin guidance to 45–45.5% and SSS to 4.2–4.7%, with Australia’s transformation expected to impact earnings neutrally by 2026.

Segment Performance

In Canada, same-store sales grew 6%, with a 4.1% increase in transactions and a 1.9% increase in basket size. The company opened 19 net new stores in Q3, bringing the total number of stores in Canada to 1,684. In Latin America, Dollarcity delivered strong financial results, opening 25 net new locations, and the total store count reached 683. The Australian segment is still in the early stages of transformation, with the company laying the groundwork for a multi-year transformation.

Margin Performance

Gross margin increased to 45.8% for the Canadian segment, and consolidated gross margin came in at 44.8% of sales for Q3. SG&A for the Canadian segment was 14.2%, and consolidated SG&A was 15.4% of sales in Q3. The company has seen stability in import costs, while domestic producers are pushing for price increases despite no significant input cost rises. Gross margin performance has been strong, partly due to lower logistics costs from productivity gains and stability in the logistics chain.

Guidance and Outlook

The company is increasing its full-year SSS guidance from between 3% and 4% to between 4.2% and 4.7% and raising its fiscal 2026 guidance range for the Canadian segment's gross margin to between 45% and 45.5%. The Australian segment had a negative $0.03 impact on EPS, and the company expects TRS to have a neutral to slightly negative impact on earnings in fiscal 2026. Analysts estimate next year's revenue growth at 13.1%.

Valuation

With a P/E Ratio of 42.76 and an EV/EBITDA of 30.5, the market is pricing in a high level of growth expectations. The company's ROE is 99.41%, indicating strong profitability. The Dividend Yield is 0.2%, which may not be attractive to income investors. The ROIC is 20.61%, indicating that the company is generating strong returns on its invested capital. The Net Debt / EBITDA ratio is 2.57, indicating a moderate level of leverage.

3. NewsRoom

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DOLLARAMA TO REPORT FOURTH QUARTER AND FISCAL YEAR 2026 RESULTS

Feb -09

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Dollarama (TSX:DOL): Revisiting Valuation After a Strong Year-to-Date Share Price Rally

Dec -24

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Primaris REIT Says Completed $154M Strategic Disposition and Provided Financing Update

Dec -22

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Primaris REIT Completes $154 Million Strategic Disposition and Provides Financing Update

Dec -22

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CI Select Canadian Equity Fund Exits Dollarama Inc, Impacting Portfolio by -1.22%

Dec -19

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Stifel Canada Names Gildan, KITS, and Couche-Tard as Best Consumer Ideas For 2026

Dec -19

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Will Raised Guidance And Global Expansion Change Dollarama's (TSX:DOL) Value-Retail Narrative?

Dec -12

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Dollarama Inc (DLMAF) Q3 2026 Earnings Call Highlights: Strong Sales Growth and Strategic Expansion

Dec -11

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.80%)

6. Segments

Retail - Variety Stores

Expected Growth: 7.8%

Dollarama's growth is driven by increasing consumer demand for affordable products, rising popularity of dollar stores, and strategic store locations. The company's focus on private labels and effective supply chain management also supports its expansion.

7. Detailed Products

Housewares

Dollarama offers a wide range of housewares including kitchen utensils, cleaning supplies, and home decor items.

Health and Beauty

Dollarama sells a variety of health and beauty products such as skincare, haircare, and personal care items.

Food and Beverages

Dollarama offers a selection of packaged snacks, candies, and beverages at discounted prices.

Party and Craft Supplies

Dollarama provides a range of party supplies, craft materials, and seasonal decorations.

Pet Food and Accessories

Dollarama sells pet food, toys, and accessories at discounted prices.

Stationery and Office Supplies

Dollarama offers a variety of stationery, office supplies, and school materials.

Toys and Games

Dollarama sells a range of toys, games, and puzzles for kids and adults.

Seasonal and Holiday Items

Dollarama provides seasonal decorations, gifts, and holiday-themed items.

8. Dollarama Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Dollarama's products are mostly non-essential and discretionary, making substitutes less of a threat. However, online shopping and e-commerce platforms can be considered substitutes, but Dollarama's focus on in-store experience and convenience mitigates this threat.

Bargaining Power Of Customers

Dollarama's customers have some bargaining power due to the availability of alternative retailers and online shopping options. However, Dollarama's low prices and convenient locations reduce the bargaining power of customers.

Bargaining Power Of Suppliers

Dollarama has a diverse supplier base, which reduces the bargaining power of individual suppliers. Additionally, Dollarama's large scale of operations gives it negotiating power with suppliers.

Threat Of New Entrants

The threat of new entrants is low due to the high capital requirements and logistical challenges of setting up a large-scale retail operation. Additionally, Dollarama's established brand and economies of scale make it difficult for new entrants to compete.

Intensity Of Rivalry

The retail industry is highly competitive, and Dollarama faces intense rivalry from other discount retailers and dollar stores. However, Dollarama's focus on everyday low prices and convenient locations helps it to maintain its market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 86.78%
Debt Cost 5.42%
Equity Weight 13.22%
Equity Cost 6.53%
WACC 5.56%
Leverage 656.15%

11. Quality Control: Dollarama Inc. passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Dollarama

A-Score: 5.8/10

Value: 1.0

Growth: 8.0

Quality: 6.5

Yield: 0.0

Momentum: 9.5

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Target

A-Score: 5.4/10

Value: 6.5

Growth: 5.1

Quality: 4.5

Yield: 7.0

Momentum: 2.0

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
Walmart

A-Score: 5.4/10

Value: 2.5

Growth: 5.4

Quality: 5.3

Yield: 2.0

Momentum: 7.5

Volatility: 9.3

1-Year Total Return ->

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Stock-Card
Dollar General

A-Score: 5.3/10

Value: 4.5

Growth: 5.6

Quality: 3.9

Yield: 3.0

Momentum: 9.5

Volatility: 5.7

1-Year Total Return ->

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Stock-Card
Costco Wholesale

A-Score: 5.2/10

Value: 2.0

Growth: 6.8

Quality: 5.7

Yield: 2.0

Momentum: 5.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Dollar Tree

A-Score: 4.2/10

Value: 4.8

Growth: 3.2

Quality: 2.8

Yield: 0.0

Momentum: 9.0

Volatility: 5.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

192.96$

Current Price

192.96$

Potential

-0.00%

Expected Cash-Flows