Dollarama (DOL) Q4 2025 earnings summary

Executive summary

• Fiscal 2025 sales rose 9.3% to $6.4B, with Q4 sales up 14.8% to $1.88B and comparable store sales growth of 4.6% for the year and 4.9% in Q4.

• EBITDA for FY2025 was $2.1B (33.1% margin), net earnings reached $1.17B, and diluted EPS increased 16.9% to $4.16.

• Opened 65 net new stores in Canada, reaching 1,616 locations, and Dollarcity expanded by 100 stores to 632 across four Latin American countries, with Mexico entry planned for 2025.

• Announced proposed acquisition of The Reject Shop in Australia for A$259M, expected to close in H2 2025, with integration over 3-4 years.

• Quarterly dividend increased by 15% to $0.1058 per share and 8.1M shares repurchased for nearly $1.1B.

Financial highlights

• Q4 gross margin improved to 46.8%; full-year gross margin at 45.1%, mainly due to lower logistics costs.

• SG&A was 14.5% of sales for FY2025; Q4 SG&A at 14.7%.

• Free cash flow for FY2025 was $1.0B; adjusted net debt/EBITDA ratio stable at 2.16x.

• Operating income rose 14.4% to $1.71B; operating margin at 26.7%.

• Dollarcity contributed $129.9M in net earnings, reflecting strong operational performance and increased ownership.

Outlook and guidance

• Fiscal 2026 guidance: comparable store sales growth of 3–4%, gross margin 44.2–45.2%, SG&A 14.2–14.7% of sales, and CapEx of $185–210M (excluding logistics hub).

• Net new store openings expected to be 70–80, above historical levels due to real estate opportunities.

• Dollarcity’s Mexico entry will result in a $10–20M USD loss (100% basis) in fiscal 2026, with 80% attributable.

• Long-term target of 2,200 Dollarama stores in Canada by 2034 and 1,050 Dollarcity stores by 2031 (excluding Mexico).

• Guidance excludes impact of proposed acquisition of The Reject Shop.