Dollarama Inc. shares rose sharply in trading today, advancing 8.2% to CA$194.20 after the company released its fiscal first-quarter 2027 financial results before markets opened. The quarter's results outpaced market forecasts on multiple fronts, prompting a positive market reaction.
Chief among the headline figures, Dollarama reported net earnings of C$302.3 million, a 10.4% increase year-over-year. Diluted earnings per share climbed 13.3% to C$1.11. Those results exceeded consensus estimates compiled by S&P Capital IQ, which projected net earnings of C$273.7 million and diluted EPS of C$0.99.
Profitability metrics also beat expectations. EBITDA for the quarter came in at C$582.5 million, up 17% from the year-ago period and above the analyst estimate of C$535.6 million. Total sales reached C$1.85 billion, representing a 21% increase compared with the prior-year quarter and topping the forecast of C$1.82 billion.
On the Canadian retail performance front, comparable store sales in Canada rose 5.6% for the quarter, materially higher than the 3.7% figure analysts had expected. The company continued to expand its domestic footprint by opening 28 net new locations in Canada during the quarter, bringing its total store count to 1,719 as of May 3.
CEO Neil Rossy highlighted the company’s "resilient value proposition" as a central strength in navigating an uncertain macroeconomic environment.
Management provided fiscal 2027 guidance that calls for 3-4% Canadian same-store sales growth and 60-70 net new Canadian store openings, a range that the company said is broadly in line with market expectations. That guidance, together with the quarterly beat, appears to have reinforced investor confidence.
Analyst coverage heading into the release was largely constructive, with current recommendations comprising 11 buy ratings, 4 holds and 1 sell. Several firms had already lifted their price targets following previous quarterly results: RBC Capital to C$225, CIBC to C$212, TD Securities to C$235 and Scotiabank to C$220 - all maintaining positive ratings. Those revisions provided a supportive backdrop for the stock's move higher.
In sum, the quarter delivered stronger-than-expected top-line growth, margin expansion as reflected in EBITDA gains, and ongoing store growth in Canada. Investors responded to the combination of beaten estimates and reiteration of measured fiscal guidance with a notable uptick in the share price during today's session.
Summary - Dollarama reported fiscal Q1 2027 results that surpassed analyst estimates for net earnings, diluted EPS, EBITDA and total sales. Canadian comparable store sales outperformed expectations and the retailer added 28 net new stores, with management providing fiscal-year guidance consistent with market views.