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Dollarama Inc. expects Canadians will continue to seek more value for their money amid ongoing economic uncertainty and the likelihood that U.S.-imposed tariffs will weaken the economy.
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On Thursday, the company reported higher sales and earnings in its fourth quarter and provided guidance for its next fiscal year, with expectations of another solid performance tempered by cautious consumer spending.
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The discount retailer said it believes consumers will continue to respond positively to product affordability given heightened concerns about the current economic and trade environment.
“Certainly, fiscal 2026 is gearing up to bring its fair share of challenges and uncertainty,” chief executive Neil Rossy told analysts during the fourth quarter 2025 earnings call.
Rossy said the direct impacts of the trade war on Dollarama’s business involve the counter tariffs on a portion of goods it imports from the U.S.
“While customer behaviour remains difficult to forecast, our assumption is that consumers will remain cautious on discretionary spending and continue to seek out value,” he said.
The CEO said most of the goods expected to be affected by the tariffs are consumables, which the company can navigate through product substitutions or pricing adjustments when necessary.
“While our concept may be more resilient than most, when consumers spend less, they tend to spend less everywhere. So, you know, tariff wars are no good for anyone,” said Rossy.
Dollarama provided the current year’s guidance range of three to four per cent comparable store sales, compared to the previous year’s actual 4.6 per cent result. It forecasts gross margin to be between 44.2 and 45.2 per cent in the fiscal year, compared to a prior actual result of 45.1 per cent.
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The company was either in line with or beat estimates for the quarter, reporting better than expected revenue and same-store sales.
Sales were up 14.8 per cent to $1.88 billion in the quarter ended Feb. 2 compared to a year ago, an increase it said was driven by growth in both its total number of stores and its comparable store sales over the past 12 months.
Same store sales grew 4.9 per cent in the quarter as the number of transactions increased 5.3 per cent, with a 0.4 per cent drop in average transaction size. This was well above the 3.3 per cent consensus by analysts.
The company attributed the growth primarily to continued demand for consumables, along with positive comparable store sales performance on seasonal items.
“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,” Rossy said in a press release.
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Dollarama’s net earnings also increased in the quarter to $391 million, up 20.8 per cent from the previous year — bringing diluted net earnings per common share up from $1.15 to $1.40, an increase of 21.7 per cent.
• Email: dpaglinawan@postmedia.com
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