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Dollarama
(TSX:DOL)
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Rating:68Neutral
Price Target:
C$222.00
▲(21.01% Upside)
Action:Reiterated
Date:10/02/26
The score is driven primarily by strong operating profitability and cash generation, tempered by meaningful leverage and thin equity that elevate balance-sheet risk. Technicals are neutral-to-mildly constructive but not strongly aligned with the longer-term trend. Valuation is a headwind due to a high P/E and low yield, while the latest earnings call was supportive with raised guidance despite acknowledged cost and international expansion/transformation pressures.
Positive Factors
Profitability and Cash Generation
Strong margins and substantial cash generation indicate a scalable retail model with meaningful operating leverage. Operating and free cash flow provide resources to fund stores, logistics, international expansion and shareholder returns while supporting resilience through normal business volatility.
Negative Factors
High Financial Leverage
High debt relative to equity makes the capital structure less resilient if operating conditions weaken. Although cash generation is strong, leverage can restrict financial flexibility, increase sensitivity to financing costs and leave fewer resources available for expansion or shareholder returns.
Read all positive and negative factors
Positive Factors
Negative Factors
Profitability and Cash Generation
Strong margins and substantial cash generation indicate a scalable retail model with meaningful operating leverage. Operating and free cash flow provide resources to fund stores, logistics, international expansion and shareholder returns while supporting resilience through normal business volatility.
Read all positive factors
Dollarama (DOL) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$54.25B
Dividend Yield0.23%
Average Volume (3M)751.63K
Price to Earnings (P/E)40.3
Beta (1Y)0.54
Revenue Growth17.86%
EPS Growth10.53%
CountryCA
Employees28,300
SectorConsumer Defensive
Sector Strength42
IndustryDiscount Stores
Share Statistics
EPS (TTM)5.01
Shares Outstanding268,568,150
10 Day Avg. Volume674,292
30 Day Avg. Volume751,632
Financial Highlights & Ratios
PEG Ratio2.83
Price to Book (P/B)34.74
Price to Sales (P/S)6.97
P/FCF Ratio34.13
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$213.09Price Target Upside16.16% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering11
EPS Forecast (FY)5.15
Revenue Forecast (FY)C$8.13B
Dollarama Business Overview & Revenue Model
Company Description
Dollarama Inc. is a prominent Canadian retailer that manages a vast network of dollar stores across the country. Its outlets provide customers with a wide array of general merchandise, consumable goods, and seasonal products. The company extends i...
How the Company Makes Money
Dollarama primarily makes money by selling merchandise in its stores, generating revenue at the point of sale from high-volume transactions of low-priced items. Its core revenue stream is retail sales across a mix of (1) consumables (e.g., snacks,...
Dollarama Earnings Call Summary
Earnings Call Date:Sep 16, 2026
(Q2-2027)
| % Change Since: |
Next Earnings Date:Dec 09, 2026
Earnings Call Sentiment Positive
The call was broadly positive. Strong Q2 and first-half results, Canadian same-store sales and traffic momentum, raised guidance, store expansion, Dollarcity growth, progress in Australia, and shareholder returns significantly outweighed the stated challenges. Management nevertheless highlighted cautious consumers, trade and geopolitical uncertainty, higher oil and supply chain costs, Mexico ramp-up losses, and near-term Australian sales and operating losses.Positive Updates
Strong Consolidated Revenue and Earnings Growth
Consolidated sales increased 17.6% to more than $2 billion in Q2 fiscal 2027. EBITDA increased 11% to $653 million, representing a 32.2% EBITDA margin. Net earnings totaled $349.3 million, while diluted EPS increased 11.2% to $1.29 from $1.16 last year.
Negative Updates
Consumer and Macroeconomic Pressure
Management said Canadian economic conditions remain challenging, with cautious consumers, continued pressure on household budgets, elevated living costs, weak consumer confidence, trade tensions, and uncertainty weighing on the economic outlook.
Read all updates
Q2-2027 Updates
Positive
Negative
Strong Consolidated Revenue and Earnings Growth
Consolidated sales increased 17.6% to more than $2 billion in Q2 fiscal 2027. EBITDA increased 11% to $653 million, representing a 32.2% EBITDA margin. Net earnings totaled $349.3 million, while diluted EPS increased 11.2% to $1.29 from $1.16 last year.
Read all positive updates
Company Guidance
Fiscal 27 guidance was increased to between 65 and 75 net new stores in Canada, up from the previous range of 60 to 70, and fiscal 2027 same store sales guidance was increased to between 4% and 4.5%, up from the previous range of 3% to 4%; full year Canadian segment gross margin guidance is maintained at 45.0% to 45.5% and SG and A guidance remains unchanged at between 14.1% to 14.6% of sales. In Australia, Dollarama remains on track to renovate between 60 and 80 stores and open between 15 and 25 net new stores in fiscal 27, aims to have about half of its import products transition by fiscal year end, and expects the product transition to continue into fiscal 28; integration costs will be more heavily weighted through the second half, the business was about at a loss of $25 million at the midyear point, implying a certain acceleration in the third quarter, which is a seasonally weak period in Australia.Dollarama Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
56
Neutral
Cash Flow
78
Positive
| Breakdown | TTM | Jan 2026 | Jan 2025 | Jan 2024 | Jan 2023 | Jan 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 7.88B | 7.26B | 6.41B | 5.87B | 5.05B | 4.33B |
| Gross Profit | 3.28B | 2.82B | 2.89B | 2.61B | 2.35B | 2.05B |
| EBITDA | 2.55B | 2.43B | 1.99B | 1.79B | 1.48B | 1.28B |
| Net Income | 1.37B | 1.31B | 1.17B | 1.01B | 801.86M | 663.17M |
Balance Sheet | ||||||
| Total Assets | 8.18B | 7.56B | 6.48B | 5.26B | 4.82B | 4.06B |
| Cash, Cash Equivalents and Short-Term Investments | 479.74M | 331.57M | 122.69M | 313.92M | 101.26M | 71.06M |
| Total Debt | 5.91B | 5.40B | 4.71B | 4.33B | 4.22B | 3.62B |
| Total Liabilities | 6.70B | 6.10B | 5.29B | 4.88B | 4.79B | 4.13B |
| Stockholders Equity | 1.48B | 1.46B | 1.19B | 380.85M | 28.41M | -66.03M |
Cash Flow | ||||||
| Free Cash Flow | 1.58B | 1.48B | 1.40B | 1.25B | 712.22M | 999.71M |
| Operating Cash Flow | 1.97B | 1.76B | 1.64B | 1.53B | 869.04M | 1.16B |
| Investing Cash Flow | -327.42M | -403.50M | -220.72M | -250.87M | -156.55M | -158.67M |
| Financing Cash Flow | -1.85B | -1.15B | -1.61B | -1.07B | -682.29M | -1.37B |
Dollarama Technical Analysis
Positive
183.45
Price Trends
185.04
Positive
186.40
Positive
184.73
Positive
Market Momentum
6.97
Negative
66.42
Neutral
74.54
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:DOL, the sentiment is Positive. The current price of 183.45 is below the 20-day moving average (MA) of 195.73, below the 50-day MA of 185.04, and below the 200-day MA of 184.73, indicating a bullish trend. The MACD of 6.97 indicates Negative momentum. The RSI at 66.42 is Neutral, neither overbought nor oversold. The STOCH value of 74.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:DOL.
Dollarama Peers Comparison
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | C$78.22B | 28.44 | 25.25% | 0.87% | 3.75% | 16.92% | |
68 Neutral | C$54.25B | 40.32 | 97.52% | 0.23% | 17.86% | 10.53% | |
67 Neutral | C$15.77B | 32.07 | 7.45% | 2.02% | -4.63% | ― | |
63 Neutral | C$39.11B | 40.19 | 20.42% | 1.18% | 3.74% | -0.07% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
62 Neutral | C$19.69B | 22.51 | 12.87% | 1.72% | 2.94% | -8.82% | |
55 Neutral | C$11.11B | 50.89 | 4.27% | 1.85% | 2.45% | -67.24% |
* Consumer Defensive Sector Average
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Dollarama Corporate Events
Business Operations and StrategyStock BuybackFinancial Disclosures
Dollarama Posts Double-Digit Sales Growth as Australian Integration Boosts Q2 Results
Positive
Sep 16, 2026
Dollarama reported strong fiscal 2027 second-quarter results, with sales rising 17.6% to $2.03 billion, net earnings up 8.7% to $349.3 million, and diluted EPS increasing to $1.29. Growth was driven by a full quarter of Australian operations, a la...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.