Dollarama Inc. reported Thursday its financial results for the fourth quarter and fiscal year ended February 2, 2025 showing a 9.3% increase in annual sales to $6.4 billion.
“Through Fiscal 2025 and in a weakening economic environment, Dollarama was there for Canadians by delivering compelling year-round value across our broad assortment of everyday goods and convenience through our growing national store network. This enabled us to meet or exceed our annual guidance on all metrics,” said Neil Rossy, President and CEO, in a news release.
“In the last year, we have made excellent progress advancing our growth prospects in Canada and in Latin America and furthering our international expansion with the proposed acquisition of The Reject Shop in Australia, reflecting our conviction in the relevance of our business model across demographics and geographies. As we enter Fiscal 2026, we are confident in our ability to execute on our growth plans, and to leverage our sourcing and merchandising strengths to deliver the best relative value for our customers while continuing to generate profitable growth for our shareholders.”
Fiscal 2025 Fourth Quarter Highlights Compared to Fiscal 2024 Fourth Quarter Results
- Sales increased by 14.8% to $1,881.3 million, compared to $1,639.2 million
- Comparable store sales increased by 4.9%, over and above 8.7% growth in the corresponding period of the previous year
- EBITDA increased by 19.9% to $670.1 million, representing an EBITDA margin of 35.6%, compared to 34.1%
- Operating income increased by 20.1% to $558.3 million, representing an operating margin of 29.7%, compared to 28.3%
- Diluted net earnings per common share increased by 21.7% to $1.40, compared to $1.15
- 15 net new stores opened, compared to 10 net new stores
- 3,373,479 common shares repurchased for cancellation for $473.3 million
Fiscal 2025 Highlights Compared to Fiscal 2024 Results
- Sales increased by 9.3% to $6,413.1 million, compared to $5,867.3 million
- Comparable store sales increased by 4.6%, over and above 12.8% growth in the corresponding period of the previous year
- EBITDA increased by 14.0% to $2,121.8 million, representing an EBITDA margin of 33.1%, compared to 31.7%
- Operating income increased by 14.4% to $1,710.7 million, representing an operating margin of 26.7%, compared to 25.5%
- Diluted net earnings per common share increased by 16.9% to $4.16, compared to $3.56
- 65 net new stores opened, same as prior year, bringing total store count to 1,616
- 8,119,971 common shares repurchased for cancellation for $1,068.2 million
The company said sales growth in Q4 was driven by growth in the total number of stores over the past 12 months (from 1,551 on January 28, 2024 to 1,616 on February 2, 2025) and comparable store sales growth. Sales for the fourth quarter of Fiscal 2025 include the 53rd week.
“On December 18, 2024, the Corporation completed the previously announced acquisition of land in the Calgary, Alberta region for a total cash consideration of $46.7 million, which takes into account closing adjustments. The purchase price was paid with available cash on hand,” it said.
“As previously announced, the Corporation intends to build a logistics hub in the Calgary, Alberta region, to service stores in Western Canada, with an estimated total capital expenditure of approximately $450.0 million to be disbursed over a three-year period. Capital expenditures in respect of the Fiscal 2026 outlook currently excludes the portion that will be deployed in the year as the Corporation is in the process of completing its three-year plan and the timing of such expenditures.
Fiscal 2026 Outlook and Capital Allocation Strategy
While consumer behaviour and the path of the economy remain hard to predict, Dollarama said it believes that consumers will continue to respond positively to the affordability of its products, the convenience and proximity of its national store network, and its commitment to offering compelling value across its broad assortment of consumables, seasonal items and general merchandise.
“Given heightened uncertainty stemming from the current economic and trade environment, the 17.4% cumulative increase in comparable stores sales over the last two fiscal years, and assuming continued cautious discretionary spending by consumers, the Corporation anticipates generating comparable store sales growth of between 3.0% and 4.0% in Fiscal 2026, supported by its strong product sourcing and merchandising expertise and the regular refresh of its assortment. The Corporation improved its guidance range for gross margin as a percentage of sales compared to prior year, based on its ability to actively manage product margins, partially offset by higher inbound shipping costs. It also expects ongoing efficiency and labour productivity initiatives to offset the impact of higher store labour and operating costs, resulting in an improved guidance range in SG&A as a percentage of sales compared to the prior year,” it said.
“As a result of opportunities to take over leases from certain retailers exiting the market and its strong real estate pipeline, the Corporation may exceptionally open a higher number of net new stores during Fiscal 2026 compared to historical levels. As such, the Corporation has increased its net new store openings guidance range compared to the prior year.
“In addition to the logistics hub, the Corporation expects to allocate capital expenditures towards new store openings, maintenance and other transformational capital requirements, which are expected to be mainly funded with cash flow from operating activities and are not anticipated to impact the Corporation’s shareholder capital return strategy. In addition to its intent to maintain a dividend subject to quarterly approval, the Corporation anticipates to continue allocating the majority of excess cash toward the repurchase of shares through its normal course issuer bid.”
Founded in 1992 and headquartered in Montréal, Dollarama is a recognized Canadian value retailer offering a broad assortment of consumable products, general merchandise and seasonal items both in-store and online.
Dollarama also owns a 60.1% interest in Dollarcity, a growing Latin American value retailer. Dollarcity offers a broad assortment of consumable products, general merchandise and seasonal items at select, fixed price points up to US$4.00 (or the equivalent in local currency) in 632 conveniently located stores in Colombia, Guatemala, El Salvador and Peru.
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Dollarama leadership should be exploring opportunities outside Canada as its penetration of the domestic market reaches that saturation point.
Interestingly, the Polish parent company of UK-based Poundland is looking for potential buyers for that chain. Poundland has a solid positioning in the UK market and is a well-known brand that would be an asset to the Dollarama group.
https://www.retailgazette.co.uk/blog/2025/03/pepco-group-actively-exploring-poundland-sale-as-uk-retail-pressures-mount/