Dollarama Inc. saw its stock climb sharply on Thursday after the discount retailer delivered fiscal first-quarter results that surpassed analyst expectations, underscoring the continued strength of value-oriented shopping among Canadian consumers.
Shares of the Montreal-based company jumped 8.11% to C$194.13 by mid-morning on the Toronto Stock Exchange, after opening at C$185.00. The stock briefly touched an intraday high of C$195.29, remaining below its 52-week peak of C$209.96 but well above the 52-week low of C$166.00.
For its fiscal 2027 first quarter, Dollarama reported sales of C$1.846 billion, a 21.4% increase from C$1.521 billion in the same period last year. Net earnings rose 10.4% to C$302.3 million, while diluted earnings per share increased to C$1.11 from C$0.98. Adjusted earnings came in at C$1.05 per share, topping the C$0.99 consensus estimate from analysts polled by LSEG, who had also forecast revenue of C$1.82 billion.
In Canada, comparable store sales grew 5.6%, accelerating from 4.9% a year ago, driven by a 3.5% increase in customer transactions and a 2.0% rise in average transaction size. The company attributed the gains to strong demand across both consumables and general merchandise categories.
CEO Neil Rossy expressed confidence that Dollarama's compelling value proposition will continue to attract shoppers as the chain expands its footprint. The company added 28 net new stores in Canada during the quarter, up from 22 in the year-ago period.
International operations also drew attention. Dollarama's Australian segment reported C$192.8 million in sales from 410 stores, while its Dollarcity banner ended the quarter with 752 locations across Colombia, Guatemala, Peru, El Salvador, and Mexico as of March 31, 2026. TD Cowen analyst Brian Morrison noted that progress in both Mexico and Australia supports the view that Dollarama's business model is portable, and he expects these markets to become significant growth drivers.
The push overseas weighed slightly on margins. Gross margin contracted to 43.9% of sales from 44.2% a year earlier, partly due to lower margins in Australia, though this was offset by improved logistics and scale benefits in Canada.
Looking ahead, Dollarama maintained its fiscal 2027 outlook for Canada, including plans for 60 to 70 net new stores, comparable sales growth of 3.0% to 4.0%, gross margin between 45.0% and 45.5%, and capital spending of C$420 million to C$470 million. The board declared a quarterly dividend of C$0.1200 per share, payable August 7 to shareholders of record on July 10.
The strong results lifted the broader Canadian market, with the S&P/TSX Composite Index rising 0.9% to 34,479.68 points. Dollarama's earnings pushed the consumer discretionary sub-index to the top of the sector board, providing a boost to the overall market.