Dollarama (DOL) Q4 2025 earnings summary

Executive summary

• Fiscal 2025 sales rose 9.3% to over $6.4B, with comparable store sales up 4.6% and net earnings up 15.6% to $1.17B.

• Q4 sales increased 14.8% to nearly $1.9B, with same-store sales growth of 4.9% and diluted EPS up 21.7% to $1.40.

• 65 net new stores opened in Canada, bringing the total to 1,616, and long-term target raised to 2,200 stores by 2034.

• Dollarcity opened 100 net new stores, reaching 632 in Latin America, with Mexico entry planned for summer 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.

Financial highlights

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

• EBITDA for Fiscal 2025 was $2.1B (margin 33.1%), up from $1.86B, and Q4 EBITDA reached $670M.

• Operating income rose 14.4% to $1.71B, with an operating margin of 26.7%.

• SG&A as a percentage of sales was 14.5% for Fiscal 2025; Q4 SG&A was 14.7%.

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

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.

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

• CapEx guidance for fiscal 2026 is $185–210M, primarily for new stores, excluding major logistics hub expenditures.

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

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