Dollarama (DOL) Q1 2026 earnings summary

Executive summary

• Achieved 8.2% Q1 sales growth year-over-year to $1,521.2 million, with 4.9% comparable store sales growth driven by strong consumables and seasonal performance.

• Opened 22 net new stores in Canada (total 1,638) and 12 new Dollarcity stores in Latin America (total 644), with imminent entry into Mexico and expansion plans for summer 2025.

• Announced acquisition of The Reject Shop in Australia for A$259M, expected to close by July, progressing toward international expansion.

• Maintained strong brand recognition, ranking #2 in Canada and #6 in Quebec.

• Focused on value proposition amid macroeconomic uncertainty and counter tariffs on U.S. imports.

Financial highlights

• Q1 FY2026 sales reached $1,521M, up 8.2% year-over-year; comparable store sales grew 4.9% (3.7% more transactions, 1.2% higher average transaction size).

• Gross margin improved to 44.2% from 43.2% year-over-year, mainly due to lower logistics costs and reduced inventory shrink.

• EBITDA was $496.2M (32.6% margin), including a $10.4M unrealized gain; excluding this, EBITDA was $485.8M (31.9% margin).

• Net earnings rose 26.9% to $274M, with diluted EPS up 27.3% to $0.98; Dollarcity contributed $40.3M in net earnings.

• LTM free cash flow was $1.0B; LTM Dollarcity net earnings contribution was $148.1M.

Outlook and guidance

• Fiscal 2026 guidance: 70–80 net new store openings, comparable store sales growth of 3.0%–4.0%, gross margin of 44.2%–45.2%, SG&A of 14.2%–14.7% of sales, and CapEx of $285–$330M.

• Long-term target of 2,200 Canadian stores by 2034 and 1,050 Dollarcity stores by 2031 (excluding Mexico); Mexico expansion set for summer 2025.

• Guidance excludes impact of The Reject Shop acquisition; expect negative Q4 impact from lapping a 53-week year.