Canadian discount giant Dollarama has lifted its annual sales guidance after delivering a stronger-than-expected third-quarter performance.
The retailer reported on Thursday that net sales climbed to C$1.91 billion, surpassing analyst expectations of C$1.87 billion. The surge is largely attributed to financially stretched consumers flocking to stores for affordable pantry staples, cleaning supplies, and seasonal goods.
With inflation remaining stubborn and household budgets tightening, the appeal of discounted consumables has proven resilient.
Navigating an ‘Unpredictable’ Economy
Despite broader economic uncertainty, Dollarama is thriving. CEO Neil Rossy emphasized that the company’s sustained growth is built on strict cost discipline and strategic international expansion in Latin America and Australia.
“The business was sustaining growth in an unpredictable economic environment,” Rossy noted.
This resilience aligns with trends seen south of the border. Major U.S. counterparts like Dollar Tree and Dollar General also recently raised their forecasts, signaling a North American-wide shift toward value retail as shoppers hunt for bargains.
By the Numbers: Q3 Highlights
Dollarama’s report for the quarter ended November 2 paints a picture of robust traffic:
- Earnings Per Share: C$1.17 (beating estimates of C$1.10).
- Comparable Store Sales (Canada): Up 6%.
- Transaction Growth: Up 4.1%.
- Average Basket Size: Up 1.9%.
Upgraded Outlook
Buoyed by these results, the retailer has revised its expectations for fiscal 2026 upward.
- Comparable Sales Growth: Now expected to range between 4.2% and 4.7% (up from the previous 3%–4% guidance).
- Annual Margin: Forecasted between 45% and 45.5% (an increase from the prior target of 44.2%–45.2%).
While economists predict inflation in Canada may temporarily tick higher in the near term, Dollarama appears well-positioned to capitalize on the continued demand for value.
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