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MONTREAL - Dollarama Inc . (TSX:DOL) reported better-than-expected first quarter results on Wednesday, driven by strong sales growth and improved margins. The Canadian discount retailer also raised its full-year guidance.
Dollarama’s shares edged up 0.24% in pre-market trading following the earnings release.
Dollarama’s net earnings rose 26.9% to C$273.8 million, or C$0.98 per diluted share, in the quarter ended May 4, beating analyst estimates. Revenue increased 8.2% to C$1.52 billion, also topping expectations.
Comparable store sales, a key metric in retail, grew 4.9% in Q1, consisting of a 3.7% increase in transaction count and a 1.2% rise in average basket size. This built on 5.6% comparable sales growth in the same quarter last year.
"We are off to a strong start to fiscal 2026 as we successfully pursue our Canadian growth, with comparable store sales supported by sustained consumables demand and positive seasonal offering performance," said Neil Rossy, President and CEO of Dollarama.
The company’s gross margin expanded to 44.2% from 43.2% a year earlier, primarily due to lower logistics costs. EBITDA margin improved to 32.6% from 29.7%.
Dollarama opened 22 net new stores during the quarter, bringing its total store count to 1,638 across Canada. The company maintained its target to open 70-80 net new stores this fiscal year.
Looking ahead, Dollarama raised its full-year comparable store sales growth forecast to 3.0-4.0%, up from its previous outlook of 2.5-3.5%. The company also increased its gross margin guidance to 44.2-45.2%.
The company said its proposed acquisition of Australia’s The Reject Shop remains on track to close by the end of July, pending shareholder approval. Dollarama also noted that its Latin American affiliate Dollarcity plans to open its first stores in Mexico imminently.
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