The retailer says shipping and fuel pressures may emerge later this year
Canadian discount retailer Dollarama reported stronger first-quarter earnings and revenue as value-conscious consumers continued to drive store traffic, while executives warned that the ongoing conflict involving Iran, Israel and the United States could lead to higher transportation and product costs in the second half of the fiscal year.
For the quarter ended May 3, 2026, Dollarama reported net earnings of $302.3 million, or $1.11 per diluted share, up from $273.8 million, or $0.98 per diluted share, a year earlier. Sales rose 21.4% to $1.85 billion from $1.52 billion.
Comparable store sales in Canada increased 5.6%, supported by a 3.5% rise in transaction volumes and a 2% increase in average transaction size, according to company disclosures.
Dollarama shares rose about 7% in early trading on June 11 after the company reported earnings and sales that topped market expectations, Reuters reported.
Chief financial officer Patrick Bui told analysts that the retailer experienced a “smooth quarter” and avoided much of the fuel-related cost pressure that has emerged from disruptions to global shipping routes in the Middle East. However, he cautioned that higher fuel and transportation expenses are expected to affect results later in the year as the conflict continues.
“The only thing that we could say is that after Q1, (the war) certainly dragged on longer than we had initially anticipated,” Bui said, according to The Canadian Press.
The Strait of Hormuz, a key route for global oil shipments, has been affected by regional tensions, contributing to higher fuel prices and shipping costs for importers and retailers worldwide.
Despite those concerns, Dollarama maintained its fiscal 2027 outlook, including projected comparable sales growth of 3% to 4% in Canada.
The retailer’s Canadian business continued to expand, with 28 net new stores opened during the quarter, bringing its total Canadian store count to 1,719 locations. Management said it remains on track to open between 60 and 70 net new stores during the current fiscal year.
Australian expansion gains traction
The quarter also marked an early test of Dollarama’s international expansion strategy following its acquisition of Australian discount retailer The Reject Shop in July 2025. The transaction, valued at approximately A$259 million, added a network of more than 390 stores and established a new Australian operating platform for the company.
Dollarama has begun adapting the chain to its merchandising and store-layout model, with 28 of the 410 Australian locations operating with Dollarama fixtures and layouts by the end of the quarter. The company plans to renovate about 400 stores over the next four years as it seeks to replicate the discount retail formula that helped drive its growth in Canada.
Chief executive officer Neil Rossy said early customer feedback has been encouraging, noting that shoppers have responded positively to improved store navigation and a broader assortment of products. While management cautioned that it remains too early to draw firm conclusions, the initial performance has reinforced confidence in the company’s Australian expansion strategy.
International growth remains a priority
Beyond Australia, Dollarama continues to expand through its majority-owned investment in Latin American discount retailer Dollarcity, which operates stores across several countries in the region.
Analysts have increasingly pointed to the company’s international operations as a key source of future growth beyond the mature Canadian market. Investors and market observers have highlighted both The Reject Shop transformation and Dollarcity’s ongoing expansion as potential long-term earnings drivers, complementing Dollarama’s domestic store growth and comparable sales gains.
