The Numbers

Dollarama Inc. (TSX: DOL) posted second-quarter fiscal 2027 sales of $2,026.6 million, a 17.6% increase from $1,723.8 million in the same period a year earlier. The top-line surge was driven by a full quarter of Australian operations — compared with a 13-day post-acquisition stub period in fiscal 2026 — combined with Canadian store-count expansion and comparable-store sales growth. Net earnings rose 8.7% to $349.3 million, and diluted earnings per share climbed 11.2% to $1.29, absorbing a $0.05-per-share dilution attributable to the Australian segment.

EBITDA grew 11.0% to $653.0 million, though the EBITDA margin contracted 190 basis points to 32.2% from 34.1%, reflecting the lower-margin Australian business now fully consolidated. In Canada — the company's core value-retail engine — the picture was more constructive: EBITDA margin expanded to 34.9% from 34.5%, gross margin held near flat at 45.7% versus 45.6%, and SG&A as a percentage of sales was unchanged at 13.8%. Canadian comparable-store sales rose 5.4%, accelerating from 4.9% growth in the prior-year quarter, fuelled by a 3.7% lift in transaction volume and a 1.7% increase in average basket size, with strong demand concentrated in consumables and general merchandise — categories of particular relevance to food and household staples purchasers.

Global Expansion Picture

The company's equity-accounted Latin American joint venture, Dollarcity, contributed $49.9 million to Dollarama's net earnings for the April–June 2026 period. Dollarcity's Central American business delivered a 39.7% year-over-year earnings increase, driven by a 30.0% rise in sales as the network expanded from 658 to 781 locations over the past twelve months. Mexico remains loss-making: Dollarama's 80.05% share of that venture's net loss widened to $5.7 million from $1.5 million, reflecting higher expansion costs. Subsequent to quarter-end, Dollarcity declared a US$125.0 million cash dividend, with Dollarama receiving US$75.1 million ($103.8 million); a portion funded a US$38.0 million ($52.4 million) capital call for the Mexico build-out.

In Australia, Dollarama renovated 25 stores and opened 4 net new locations during the quarter, bringing to 60 the number of stores outfitted with Dollarama's layout and fixtures across a total network of 414 locations. The Australian segment posted a quarterly net loss of $13.8 million, consistent with management's full-year loss guidance. All refurbished and new Australian stores continue to trade under the legacy Reject Shop banner until the merchandise range fully reflects Dollarama's value proposition — a transition that will take multiple quarters and ongoing capital investment.

Guidance and Capital Returns

Management raised its fiscal 2027 Canadian guidance on two metrics. The comparable-store sales range was lifted to 4.0%–4.5% from 3.0%–4.0%, and the net new store opening target was widened to 65–75 units from 60–70. Gross margin guidance of 45.0%–45.5% and SG&A of 14.1%–14.6% of sales were left unchanged, as was the capital expenditure envelope of $420.0 million to $470.0 million.

Dollarama repurchased 1,596,016 shares during the quarter at a weighted average price of $188.23, for a total outlay of $300.4 million under its 2026–2027 normal-course issuer bid, which authorises the buyback of up to 13,532,086 shares. The board also declared a quarterly dividend of $0.12 per common share, payable November 6, 2026, to shareholders of record on October 9, 2026. For context on how value-retail operators are navigating consumer trade-down trends, see our related coverage of discount and convenience channel dynamics and food-and-household consumables demand drivers.

Neil Rossy, President and Chief Executive Officer, credited the quarter's performance to sustained consumer interest in value formats: "At a time when households are making careful spending decisions, customers continued to count on Dollarama for dependable value." The commentary aligns with broader foodservice and grocery research showing accelerated channel-shifting toward value-positioned retailers as consumers manage household budgets.

Written by Michael Politz, Author of Guide to Restaurant Success: The Proven Process for Starting Any Restaurant Business From Scratch to Success (ISBN: 978-1-119-66896-1), Founder of Food & Beverage Magazine, the leading online magazine and resource in the industry. Designer of the Bluetooth logo and recognized in Entrepreneur Magazine's "Top 40 Under 40" for founding American Wholesale Floral, Politz is also the Co-founder of the Proof Awards and the CPG Awards and a partner in numerous consumer brands across the food and beverage sector.