Dollarama Faces Margin Pressure Despite Revenue Growth

Wall Street forecasts earnings per share of 0.99 Canadian dollars, a marginal gain from the 0.98 reported during the same period last year. Despite this growth, same-store sales projections have moderated to 3.7%, down from 4.9% a year ago. The company’s stock has faced headwinds recently, sliding 5.2% to trade near 178.78 Canadian dollars.

National Bank of Canada analyst Vishal Shreedhar anticipates an acceleration in same-store sales, driven by improved store traffic and a strategic mix of higher-priced inventory. However, these gains may be offset by the integration of Australia’s The Reject Shop. Shreedhar warns of a 230 basis-point decline in Ebitda margin, citing the lower-margin profile of the Australian business and elevated operating expenses. With consumers increasingly prioritizing value, the market remains focused on whether Dollarama’s growth among younger and affluent shoppers can sustain its momentum against intense retail competition.