Dollarama Inc. (TSX: DOL) reported a strong fiscal 2026 finish, with full-year sales up to $7.26 billion from $6.41 billion last year.
The year was shaped by Canadian same-store sales growth, 75 net new Canadian stores, Dollarcity earnings growth, and the addition of Australia, though fourth-quarter margins compressed as Australia diluted profitability and calendar shifts hurt peak-season traffic.
Q4 sales jumped to $2.10 billion from $1.88 billion in the same period last year, but gross margin fell to 45.5% from 46.8%.
Australia added revenue but dragged margins. The segment contributed $243.0 million of fourth-quarter sales and $454.8 million for the partial year since acquisition close, but reduced Q4 gross margin by 110 basis points, raised SG&A by 90 basis points, and cut EBITDA margin by 240 basis points, equal to a $37.1 million hit. For the full year, Australia reduced gross margin by 60 basis points, lowered EBITDA margin by 140 basis points, and represented a $58.4 million EBITDA drag.
Net earnings rose flat to $392.5 million in Q4 2025 from $391.0 million last year, driven by lower gross margin, higher operating expenses, and slightly higher financing costs. This translates to $1.43 earnings per diluted share. For full year, it also jumped to $1.31 billion from $1.17 billion in 2024.
Cash and cash equivalents rose to $331.6 million from $122.7 million in the same period last year. Inventories also broke the billion-mark at $1.10 billion from $921.1 million.
Q4 comparable sales in Canada increased 1.5%, or 3.5% excluding calendar shift effects, versus 4.9% growth a year earlier. Transaction count fell 1.6% while average ticket rose 3.1%. For the full year, Canadian comparable sales rose 4.2%, driven by a 2.4% increase in transactions and a 1.7% increase in average transaction size, against 4.6% growth in 2025. Management attributed the full-year increase to continued strength in consumables and seasonal products, while Q4 weather weighed on traffic during historically strong weeks.
Fiscal 2027 guidance implies a steadier Canada and an investment-heavy Australia. In Canada, Dollarama expects comparable sales growth of 3.0% to 4.0% and gross margin of 45.0% to 45.5%. Australia will be a deliberate earnings drag, with 60 to 80 store renovations at A$0.4 million to A$0.6 million each, 15 to 25 net new stores at A$0.8 million to A$1.0 million each, and incremental transformation costs of A$35.0 million to A$45.0 million. Management expects the Australian segment to post a net loss in Fiscal 2027 as imported Dollarama product ramps in the second half and reaches about half of imports by year-end.
Dollarama last traded at $186.58 on the TSX.
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