Dollarama Inc (TSE:DOL)
TSX:DOL
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Dollarama
(TSX:DOL)
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Rating:71Outperform
Price Target:
C$216.00
▲(22.37% Upside)
Action:Upgraded
Date:06/12/26
The score is driven primarily by strong underlying profitability and cash generation, supported by a constructive uptrend in the stock. Offsetting factors are elevated balance-sheet leverage, a premium valuation (high P/E with low yield), and near-term earnings pressure from Australia/Mexico investment losses and cost-risk commentary in guidance.
Positive Factors
Strong cash generation
Consistent, sizable free cash flow that covers a large portion of net income gives durable funding for store expansion, logistics investment, dividends and buybacks. Strong FCF reduces reliance on external financing and supports long-term capital allocation flexibility.
Negative Factors
Elevated financial leverage
High leverage and a thin equity base increase financial vulnerability to shocks, limit flexibility for opportunistic investment, and raise refinancing risk. This structural capital constraint magnifies business risk through economic cycles.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Consistent, sizable free cash flow that covers a large portion of net income gives durable funding for store expansion, logistics investment, dividends and buybacks. Strong FCF reduces reliance on external financing and supports long-term capital allocation flexibility.
Read all positive factors
Dollarama (DOL) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$50.87B
Dividend Yield0.2%
Average Volume (3M)611.30K
Price to Earnings (P/E)38.2
Beta (1Y)0.63
Revenue Growth16.11%
EPS Growth11.08%
CountryCA
Employees7,720
SectorConsumer Defensive
Sector Strength42
IndustryDiscount Stores
Share Statistics
EPS (TTM)4.88
Shares Outstanding270,779,140
10 Day Avg. Volume793,608
30 Day Avg. Volume611,302
Financial Highlights & Ratios
PEG Ratio2.83
Price to Book (P/B)34.74
Price to Sales (P/S)6.97
P/FCF Ratio34.13
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$216.46Price Target Upside22.63% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering13
EPS Forecast (FY)5.13
Revenue Forecast (FY)C$8.12B
Dollarama Business Overview & Revenue Model
Company Description
Dollarama Inc. is a prominent Canadian retailer that manages a vast network of dollar stores across the country. Its outlets provide customers with a wide array of general merchandise, consumable goods, and seasonal products. The company extends i...
How the Company Makes Money
Dollarama makes money primarily by buying merchandise at low cost (through sourcing, direct imports, and scale purchasing) and selling it through its network of retail stores at fixed and multi-price points, earning a gross margin on each item sol...
Dollarama Earnings Call Summary
Earnings Call Date:Mar 24, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Sep 04, 2026
Earnings Call Sentiment Positive
The call balanced material near-term investments, transformational work and regional ramp-ups against strong core performance and disciplined capital allocation. Dollarama met or exceeded fiscal 2026 guidance: consolidated sales and EPS grew double digits, Canada delivered positive same-store sales and margin metrics, and Dollarcity produced robust top-line and earnings growth with a doubled dividend. Offsets include weather- and calendar-driven softness in Q4, Mexico and Australia operating losses tied to expansion and integration, and emerging supply-chain cost pressures from geopolitical events. Management presented these negatives as known, managed investments (Australia transformation and Mexico ramp-up) rather than fundamental deterioration in the core Canadian business.Positive Updates
Top-Line and EPS Growth
Consolidated fiscal 2026 sales rose 13.1% year-over-year to $7.3 billion; Q4 sales increased 11.7% to $2.1 billion (despite 1 less week). Diluted EPS for the full fiscal year increased 13.7% to $4.73; Q4 EPS increased 2.1% to $1.43 (includes a $0.03 benefit from Australia).
Negative Updates
Q4 Weather and Calendar Headwinds
Unfavorable weather events (cold temperatures and precipitation) and a calendar shift (52-week fiscal year vs prior 53-week) negatively impacted Q4 traffic and peak sales weeks. Transactions declined 1.6% in Q4; management estimated Q4 SSS would have been 3.5% excluding the calendar shift (reported 1.5%).
Read all updates
Q4-2026 Updates
Positive
Negative
Top-Line and EPS Growth
Consolidated fiscal 2026 sales rose 13.1% year-over-year to $7.3 billion; Q4 sales increased 11.7% to $2.1 billion (despite 1 less week). Diluted EPS for the full fiscal year increased 13.7% to $4.73; Q4 EPS increased 2.1% to $1.43 (includes a $0.03 benefit from Australia).
Read all positive updates
Company Guidance
Dollarama's fiscal 2027 guidance and near‑term plans are focused on disciplined, multi‑market investment: in Canada management expects same‑store sales of 3–4%, gross margin of 45.0–45.5% of sales, SG&A of 14.1–14.6% of sales and CapEx of $420–$470 million, with 60–70 net new Canadian stores planned (after 75 net openings in FY26 and a 1,700‑store milestone in February) and the Calgary logistics hub due by end‑2027 as it pursues a 2,200‑store long‑term goal by 2034; Dollarcity will continue rapid footprint growth toward a 1,050‑store target by 2034 (ex‑Mexico), having opened 100 net new stores in 2025 (network >700) but expects Mexico (100% basis) to incur losses of roughly USD 10–20 million in FY27 (Mexico losses in FY26: USD 5.4M Q4 / USD 11.7M full year), and Dollarcity declared a USD 125M dividend (Dollarama share USD 75.1M) with Dollarama contributing USD 38M to Mexico early in FY27; Australia is an investment year with an expected net loss in FY27, incremental integration/IT and labor costs of ~$35–45M, plans to renovate 60–80 stores and open 15–25 net new stores (renovation cost AUD 400k–600k each; new store AUD 800k–1M each), a target to have ~50% of Dollarama import SKUs sourced by end‑FY27 and a multiyear (~4‑year) path to profitability; capital returns remain balanced (>4.4M shares repurchased for $834.2M in FY26 and quarterly dividend raised 13.4% to $0.12), while FY26 results to frame the outlook included consolidated sales of $7.3B (+13.1%), Q4 sales $2.1B (+11.7%), Canadian FY same‑store sales 4.2%, Q4 Canadian SSS 1.5% (3.5% excl. calendar shift), and FY26 diluted EPS up 13.7% to $4.73.Dollarama Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
54
Neutral
Cash Flow
82
Very Positive
| Breakdown | TTM | Jan 2026 | Jan 2025 | Jan 2024 | Jan 2023 | Jan 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 7.58B | 7.26B | 6.41B | 5.87B | 5.05B | 4.33B |
| Gross Profit | 3.09B | 2.82B | 2.89B | 2.61B | 2.35B | 2.05B |
| EBITDA | 2.36B | 2.43B | 1.70B | 1.52B | 1.24B | 1.07B |
| Net Income | 1.34B | 1.31B | 1.17B | 1.01B | 801.86M | 663.17M |
Balance Sheet | ||||||
| Total Assets | 8.24B | 7.56B | 6.48B | 5.26B | 4.82B | 4.06B |
| Cash, Cash Equivalents and Short-Term Investments | 816.82M | 331.57M | 122.69M | 313.92M | 101.26M | 71.06M |
| Total Debt | 6.18B | 5.40B | 4.71B | 4.33B | 4.22B | 3.62B |
| Total Liabilities | 6.87B | 6.10B | 5.29B | 4.88B | 4.79B | 4.13B |
| Stockholders Equity | 1.37B | 1.46B | 1.19B | 380.85M | 28.41M | -66.03M |
Cash Flow | ||||||
| Free Cash Flow | 1.49B | 1.48B | 1.40B | 1.25B | 712.22M | 999.71M |
| Operating Cash Flow | 1.83B | 1.76B | 1.64B | 1.53B | 869.04M | 1.16B |
| Investing Cash Flow | -469.50M | -403.50M | -220.72M | -250.87M | -156.55M | -158.67M |
| Financing Cash Flow | -771.16M | -1.15B | -1.61B | -1.07B | -682.29M | -1.37B |
Dollarama Technical Analysis
Positive
176.51
Price Trends
176.29
Positive
182.07
Positive
186.81
Positive
Market Momentum
3.86
Negative
59.91
Neutral
49.20
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:DOL, the sentiment is Positive. The current price of 176.51 is below the 20-day moving average (MA) of 180.94, above the 50-day MA of 176.29, and below the 200-day MA of 186.81, indicating a bullish trend. The MACD of 3.86 indicates Negative momentum. The RSI at 59.91 is Neutral, neither overbought nor oversold. The STOCH value of 49.20 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:DOL.
Dollarama Peers Comparison
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | C$16.55B | 24.90 | 9.98% | 1.89% | -3.40% | ― | |
71 Outperform | C$50.87B | 38.24 | 94.71% | 0.20% | 16.11% | 11.08% | |
70 Outperform | C$19.24B | 19.25 | 14.38% | 1.50% | 3.52% | 5.04% | |
66 Neutral | C$75.28B | 27.42 | 24.88% | 1.52% | 4.36% | 28.73% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
57 Neutral | C$38.84B | 33.56 | 21.74% | 1.23% | 4.36% | -0.82% | |
56 Neutral | C$11.50B | 73.90 | 2.98% | 1.78% | 2.15% | -70.90% |
* Consumer Defensive Sector Average
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Dollarama Corporate Events
Business Operations and StrategyPrivate Placements and Financing
Dollarama to Raise $750 Million in Private Senior Notes Offering
Positive
Apr 1, 2026
Dollarama Inc. has launched a private Canadian offering of $750 million in fixed-rate senior unsecured notes, split evenly between $375 million notes maturing in 2031 at 3.940% and $375 million notes maturing in 2036 at 4.576%. The notes, rated BB...
Business Operations and StrategyStock BuybackFinancial Disclosures
Dollarama Delivers Strong 2026 Results as Expansion in Canada and Abroad Accelerates
Positive
Mar 24, 2026
Dollarama reported solid fourth-quarter and full-year 2026 results, with sales rising 11.7% in the quarter and 13.1% for the year despite a shorter reporting period and adverse winter weather affecting traffic. Annual net earnings climbed 12.1% to...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.