Dollarama shares drop as annual sales forecast misses estimates

Dollarama Inc (TSX:DOL) saw its shares autumn much than 7% connected Tuesday aft the institution forecast yearly income mostly beneath expectations, signaling softer request arsenic consumers go much selective amid persistent ostentation and a weakening labour market.

The Canadian discount retailer expects comparable store income maturation of 3% to 4% successful fiscal 2027, beneath analysts’ statement of 3.9%.

The guidance follows fourth-quarter 2026 results that were mixed against expectations. For the 4th ended February 1, 2026, Dollarama reported nett net of C$392.5 million, up 0.4% year-over-year, with diluted net per stock of C$1.43, somewhat exceeding the C$1.41 estimate.

Sales roseate 11.7% to C$2.1 billion, driven by enlargement successful Canada and Australia, but comparable store income successful Canada accrued lone 1.5%, falling abbreviated of the 2.6% consensus. The shortfall was attributed to mediocre upwind and a calendar displacement that reduced high-traffic pre-holiday buying days.

Operating income for the 4th grew 4.7% to C$584.4 million, with an operating borderline of 27.8%, down from 29.7% a twelvemonth earlier. EBITDA accrued 6.2% to C$711.5 million, representing a borderline of 33.9%.

During the quarter, Dollarama opened 7 nett caller stores successful Canada and 1 successful Australia, portion repurchasing astir 888,000 shares for C$174.8 million.

Looking ahead, Dollarama expects to instrumentality to its humanities gait of 60 to 70 nett caller store openings successful Canada successful fiscal 2027, portion maintaining gross borderline guidance of 45% to 45.5% and SG&A successful the scope of 14.1% to 14.6%.

Analysts astatine Jefferies said the institution delivered beardown net but noted that Canadian store-level maturation fell abbreviated of expectations, reflecting calendar effects and weather-related disruptions.

They besides pointed to borderline pressures from the ramp-up of Australian operations, which contributed to higher operating costs and a humble diminution successful EBITDA margin. Despite these near-term challenges, the steadfast highlighted that Canadian income remained resilient, with maturation supported by higher mean transaction values.

Jefferies further noted the company’s planetary operations, including Dollarcity, contributed solidly to wide results, and emphasized that Dollarama’s ongoing stock repurchases and dividend increases show fiscal flexibility adjacent arsenic investments successful Australia continue.

The steadfast has a ‘Buy’ standing and $235 terms people connected Jefferies, implying upside from existent levels of astir $173.