Fiscal 2027 First Quarter Results Highlights Compared to Fiscal 2026 First Quarter
Sales increased by 21.4% to $1,846.1 million, compared to $1,521.2 million
Comparable store sales(1) in Canada increased by 5.6%, compared to 4.9% in the first quarter of the previous year
EBITDA(1) increased by 17.4% to $582.5 million, representing an EBITDA margin(1) of 31.6%, compared to 32.6%
Operating income increased by 11.2% to $432.2 million, representing an operating margin(1) of 23.4%, compared to 25.6%
Net earnings increased by 10.4% to $302.3 million, resulting in a 13.3% increase in diluted net earnings per common share to $1.11, compared to $0.98
Unrealized gain of $16.4 million relating to the derivative on our equity-accounted investments, positively impacting EBITDA margin by 90 basis points and diluted net earnings per common share by $0.06
28 net new stores opened in Canada, compared to 22 in the corresponding period of the previous year; 8 net new stores opened and 13 stores renovated in Australia, all operating under the legacy banner
1,962,010 common shares repurchased for cancellation for $339.1 million
"We delivered a strong performance in the first quarter of fiscal 2027 as we pursue profitable growth in our core Canadian market, generating strong comparable store sales growth, expanding our store network and progressing our Western Canada logistics hub project. We are also advancing our priorities across our international growth platforms with discipline. In Latin America, Dollarcity had a solid start to the year in its established markets, while continuing to execute the ramp-up in Mexico. In Australia, we also made progress, with an increasing number of stores now operating under the Dollarama layout and our first Dollarama import products beginning to gradually reach shelves," said Mr. Neil Rossy, President and CEO.
"Looking ahead, we expect our strong value proposition to continue resonating with customers, supported by our resilient business model which provides us with flexibility to navigate an uncertain and rapidly evolving macroeconomic environment," concluded Mr. Rossy.
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(1)
Refer to the section entitled "Non-GAAP and Other Financial Measures" of this press release for the definition of these items and, where applicable, their reconciliation with the most directly comparable GAAP measure.
Fiscal 2027 First Quarter Financial Results
Sales for the first quarter of fiscal 2027 increased by 21.4% to $1,846.1 million, compared to $1,521.2 million in the corresponding period of the prior fiscal year. This increase was driven by growth in the total number of stores in Canada over the past 12 months (from 1,638 on May 4, 2025, to 1,719 on May 3, 2026), Comparable store sales growth in Canada and a $192.8 million sales contribution from 410 stores in Australia.
Comparable store sales in Canada for the first quarter of fiscal 2027 increased by 5.6%, consisting of a 3.5% increase in the number of transactions and a 2.0% increase in average transaction size, over and above Comparable store sales growth in Canada of 4.9% for the first quarter of fiscal 2026. Comparable store sales growth was primarily driven by strong demand for consumables and general merchandise.
Gross margin(1) was 43.9% of sales in the first quarter of fiscal 2027, compared to 44.2% of sales in the first quarter of fiscal 2026. The variance was primarily driven by a lower gross margin in Australia, representing a negative 110-basis point impact, partially offset by lower logistics costs and the positive impact of scaling in Canada.
General, administrative and store operating expenses ("SG&A") for the first quarter of fiscal 2027 represented 16.5% of sales, compared to 15.3% of sales for the first quarter of fiscal 2026. This increase is primarily attributable to higher SG&A in Australia, representing a negative 140-basis point impact, partially offset by the absence, compared to the first quarter of fiscal 2026, of transaction costs in Canada related to the acquisition (the "TRS Transaction") of The Reject Shop Limited (now Dollarama Australia Pty Limited, "Dollarama Australia").
EBITDA was $582.5 million, representing an EBITDA margin of 31.6% for the first quarter of fiscal 2027, compared to $496.2 million, or an EBITDA margin of 32.6% in the first quarter of fiscal 2026. EBITDA for the first quarter of fiscal 2027 includes a contribution of $14.8 million from the Australian segment, which negatively impacted EBITDA margin by 270 basis points. EBITDA for the first quarter of fiscal 2027 also includes an unrealized gain of $16.4 million relating to the derivative on equity-accounted investments, compared to an unrealized gain of $10.4 million in the first quarter of fiscal 2026, reflecting the fair value adjustment of the option to purchase (the "Call Option") an additional 9.89% equity interest in Central American Retail Sourcing Inc. ("CARS") and a corresponding proportionate 4.945% equity interest in Inversiones Comerciales Mexicana S.A. ("ICM", and together with CARS and their respective subsidiaries, the "Dollarcity Group" or "Dollarcity"). Excluding the impact of the unrealized gain from the derivative on equity-accounted investments for both periods (respectively $16.4 million and $10.4 million), EBITDA and EBITDA margin would have been $566.1 million and 30.7%, respectively, for the first quarter of fiscal 2027, compared to $485.8 million and 31.9% for the corresponding period of the previous year.
The Corporation's share of net earnings from Dollarcity amounted to $51.2 million for the period from January 1, 2026 to March 31, 2026. This includes a 60.1% share of net earnings from CARS representing $55.5 million, compared to $40.3 million in the corresponding period of the previous year, reflecting a 37.7% year-over-year increase, and a 80.05% share of net loss from ICM representing $4.3 million. Dollarcity's first quarter performance was mainly driven by a 30.4% increase in sales, primarily attributable to an increase in Comparable store sales and total number of stores over the last twelve months (from 644 on March 31, 2025, to 752 on March 31, 2026), as well as a stable SG&A as a percentage of sales. This was partially offset by a slight decrease in gross margin related to expansion activities in Mexico. The Corporation's investment in Dollarcity is accounted for as a joint arrangement using the equity method. Refer to the section entitled "Dollarcity" of management's discussion and analysis for the first quarter of fiscal 2027.
Net financing costs increased by $5.8 million, from $44.0 million for the first quarter of fiscal 2026 to $49.7 million for the first quarter of fiscal 2027. The increase primarily reflects higher average debt levels from the Canadian segment following the issuance of the 3.940% and 4.576% Fixed Rate Notes (as hereinafter defined) during the first quarter of fiscal 2027 and an impact of $4.1 million from the Australian segment.
Net earnings increased by 10.4% to $302.3 million in the first quarter of fiscal 2027, compared to $273.8 million in the first quarter of fiscal 2026, resulting in an increase in diluted net earnings per common share of 13.3%, to $1.11 per diluted common share, in the first quarter of fiscal 2027, including a negative $0.04 impact per diluted common share from the Australian segment. Excluding the impact of the unrealized gain from the derivative on equity-accounted investments ($0.06 per diluted common share), diluted net earnings per common share would have been $1.05 per diluted common share.
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(1)
Refer to the section entitled "Non-GAAP and Other Financial Measures" of this press release for the definition of these items and, where applicable, their reconciliation with the most directly comparable GAAP measure.
Dollarama Australia
During the quarter, the Corporation renovated 13 stores and opened 8 net new stores, bringing the total number of stores in Australia to 410 at the end of the period. Among these, 28 are now configured with Dollarama's in‑store layout and fixtures, including renovated and new stores, but will continue to operate under the legacy banner until the product assortment reflects Dollarama's value proposition.
Dollarcity
Dividend and Mexico Capital Call
During the quarter, the Corporation used proceeds from its 60.1% share of the dividend previously declared by CARS and received in the first quarter of fiscal 2027, representing US$75.1 million ($102.2 million), to make a third capital contribution of US$38.0 million ($51.7 million) to ICM for expansion plans in Mexico, reflecting the Corporation's 80.05% ownership interest in ICM.
Store Network Growth
During its first quarter ended March 31, 2026, Dollarcity opened 20 net new stores, compared to 12 net new stores in the same period last year. As at March 31, 2026, Dollarcity had a total of 752 stores, with 424 locations in Colombia, 121 in Guatemala, 111 in Peru, 85 in El Salvador, and 11 in Mexico. This compares to 732 stores as at December 31, 2025.
Normal Course Issuer Bid and Dividend
During the first quarter of fiscal 2027, 1,962,010 common shares were repurchased for cancellation under the Corporation's 2025-2026 normal course issuer bid, for a total cash consideration of $339.1 million, excluding the tax on share repurchases, representing a weighted average price of $172.83 per share.
On June 11, 2026, the Corporation announced that its board of directors approved a quarterly cash dividend for holders of common shares of $0.1200 per common share. This dividend is payable on August 7, 2026 to shareholders of record at the close of business on July 10, 2026. The dividend is designated as an "eligible dividend" for Canadian tax purposes.
Fiscal 2027 Outlook
Canadian Segment
The Corporation's financial annual guidance ranges for the Canadian segment for fiscal 2027 issued on March 24, 2026 and the assumptions on which these are based remain unchanged:
(as a percentage of sales except net new store openings in units and capital expenditures in millions of dollars)
Fiscal 2027
Guidance for the Canadian segment
Net new store openings
60 to 70
Comparable store sales
3.0% to 4.0%
Gross margin
45.0% to 45.5%
SG&A
14.1% to 14.6%
Capital expenditures
$420.0 to $470.0
Australian Segment
The Corporation's expectations for the Australian segment for fiscal 2027 issued on March 24, 2026 and the assumptions on which these are based remain unchanged. Considering its business transformation initiatives and investments in Australia, the Corporation continues to expect a net loss for the Australian segment in fiscal 2027.
The guidance ranges for the Canadian segment and the Corporation's expectations regarding the Australian segment are based on several assumptions, including the following:
the number of signed offers to lease and store pipeline for fiscal 2027, the absence of delays outside of our control on construction activities and no material increases in occupancy costs in the short- to medium-term
approximately three months visibility on open orders and product margins
continued positive customer response to our product offering, value proposition and in-store merchandising
the active management of product margins, including through pricing strategies and product refresh, and of inventory shrinkage
the Corporation continuing to account for its investment in Dollarcity as a joint arrangement using the equity method
the entering into of foreign exchange forward contracts to hedge the majority of forecasted merchandise purchases in USD against fluctuations of CAD against USD
the continued execution of in-store productivity initiatives and realization of cost savings and benefits aimed at improving operating expenses
the absence of a significant shift in labour, economic and geopolitical conditions, or material changes in the retail environment and projected census and household income data
no significant changes in the capital budget for fiscal 2027 for new store openings and maintenance or transformational capital expenditures
the absence of unfavourable weather, especially in peak seasons around major holidays and celebrations
The guidance ranges for the Canadian segment and other statements included in this "Fiscal 2027 Outlook" section are forward-looking statements within the meaning of applicable securities laws, are subject to a number of risks and uncertainties and should be read in conjunction with the "Forward-Looking Statements" section of this press release.
Selected Consolidated Financial Information
13-week periods ended
(dollars and shares in thousands, except per share amounts)
May 3,
2026
May 4,
2025
$
$
Earnings Data
Sales
1,846,089
1,521,210
Cost of sales
1,036,100
848,900
Gross profit
809,989
672,310
SG&A
304,032
233,457
Depreciation and amortization
124,950
90,381
Share of net earnings of equity-accounted investments
(51,238)
(40,312)
Operating income
432,245
388,784
Unrealized gain from derivative on equity-accounted investments
(16,448)
(10,348)
Net financing costs
49,734
43,960
Earnings before income taxes
398,959
355,172
Income taxes
96,685
81,416
Net earnings
302,274
273,756
Basic net earnings per common share
$1.11
$0.99
Diluted net earnings per common share
$1.11
$0.98
Weighted average number of common shares outstanding:
Basic
272,356
277,045
Diluted
273,405
278,211
Other Consolidated Data
Year-over-year sales growth
21.4 %
8.2 %
Gross margin (1)
43.9 %
44.2 %
SG&A as a % of sales (1)
16.5 %
15.3 %
EBITDA (1)
582,506
