DOLLARAMA REPORTS FOURTH QUARTER AND FISCAL YEAR 2025 RESULTS

Comparable store sales(1) growth of 4.9% for the fourth quarter and 4.6% for Fiscal 2025

Diluted net earnings per share up 21.7% to $1.40 for the fourth quarter; up 16.9% to $4.16 for Fiscal 2025

Fiscal 2025 guidance met or exceeded on all metrics

Quarterly dividend increase of 15.0% from $0.0920 to $0.1058 per common share

MONTREAL, April 3, 2025 /PRNewswire/ - Dollarama Inc. (TSX:DOL) ("Dollarama" or the "Corporation") today reported its financial results for the fourth quarter and fiscal year ended February 2, 2025 ("Fiscal 2025"), and issued guidance for the fiscal year ending February 1, 2026 ("Fiscal 2026"). Fiscal 2025 was comprised of 53 weeks whereas Fiscal 2026 will be comprised of 52 weeks.

Fiscal 2025 Fourth Quarter Highlights Compared to Fiscal 2024 Fourth Quarter Results

Sales increased by 14.8% to $1,881.3 million, compared to $1,639.2 million

Comparable store sales increased by 4.9%, over and above 8.7% growth in the corresponding period of the previous year

EBITDA(1) increased by 19.9% to $670.1 million, representing an EBITDA margin(1) of 35.6%, compared to 34.1%

Operating income increased by 20.1% to $558.3 million, representing an operating margin(1) of 29.7%, compared to 28.3%

Diluted net earnings per common share increased by 21.7% to $1.40, compared to $1.15

15 net new stores opened, compared to 10 net new stores

3,373,479 common shares repurchased for cancellation for $473.3 million

Fiscal 2025 Highlights Compared to Fiscal 2024 Results

Sales increased by 9.3% to $6,413.1 million, compared to $5,867.3 million

Comparable store sales increased by 4.6%, over and above 12.8% growth in the corresponding period of the previous year

EBITDA increased by 14.0% to $2,121.8 million, representing an EBITDA margin of 33.1%, compared to 31.7%

Operating income increased by 14.4% to $1,710.7 million, representing an operating margin of 26.7%, compared to 25.5%

Diluted net earnings per common share increased by 16.9% to $4.16, compared to $3.56

65 net new stores opened, same as prior year, bringing total store count to 1,616

8,119,971 common shares repurchased for cancellation for $1,068.2 million

"Through Fiscal 2025 and in a weakening economic environment, Dollarama was there for Canadians by delivering compelling year-round value across our broad assortment of everyday goods and convenience through our growing national store network. This enabled us to meet or exceed our annual guidance on all metrics," said Mr. Neil Rossy, President and CEO.

"In the last year, we have made excellent progress advancing our growth prospects in Canada and in Latin America and furthering our international expansion with the proposed acquisition of The Reject Shop in Australia, reflecting our conviction in the relevance of our business model across demographics and geographies. As we enter Fiscal 2026, we are confident in our ability to execute on our growth plans, and to leverage our sourcing and merchandising strengths to deliver the best relative value for our customers while continuing to generate profitable growth for our shareholders," concluded Mr. Neil Rossy.

Fiscal 2025 Fourth Quarter Financial Results

Sales for the fourth quarter of Fiscal 2025 increased by 14.8% to $1,881.3 million, compared to $1,639.2 million for the fourth quarter of the fiscal year ended January 28, 2024 ("Fiscal 2024"). This increase was driven by growth in the total number of stores over the past 12 months (from 1,551 on January 28, 2024 to 1,616 on February 2, 2025) and comparable store sales growth. Sales for the fourth quarter of Fiscal 2025 include the 53rd week.

On a 13-week basis, comparable store sales for the fourth quarter of Fiscal 2025 increased by 4.9%, consisting of a 5.3% increase in the number of transactions and a 0.4% decrease in average transaction size, over and above comparable store sales growth of 8.7% for the fourth quarter of Fiscal 2024. The increase is primarily attributable to continued demand for consumables, along with a positive comparable store sales performance from seasonal items. 

Gross margin(1) was 46.8% of sales in the fourth quarter of Fiscal 2025, compared to 46.3% of sales in the fourth quarter of Fiscal 2024. Gross margin as a percentage of sales was higher primarily as a result of lower logistics costs.

General, administrative and store operating expenses ("SG&A") for the fourth quarter of Fiscal 2025 increased by 16.6% to $276.5 million, compared to $237.1 million for the fourth quarter of Fiscal 2024. SG&A represented 14.7% of sales for the fourth quarter of Fiscal 2025, compared to 14.5% of sales for the fourth quarter of Fiscal 2024, reflecting higher store operating costs, partially offset by the positive impact of scaling.

EBITDA was $670.1 million, representing an EBITDA margin of 35.6% of sales, for the fourth quarter of Fiscal 2025, compared to $558.9 million, or an EBITDA margin of 34.1% of sales, in the fourth quarter of Fiscal 2024.

The Corporation's 60.1% share of Dollarcity's net earnings for the period from October 1, 2024 to December 31, 2024 amounted to $58.0 million, compared to $32.8 million for the Corporation's 50.1% share during the same period last year. This 76.8% increase is primarily attributable to the continued strong operational performance of Dollarcity during the three‑month period ended December 31, 2024, compared to the same period last year, and the acquisition of an additional 10.0% equity interest in Dollarcity on June 11, 2024 (the "Dollarcity Transaction").  Dollarcity's fourth quarter performance was mainly driven by a 14.4% increase in sales, supported by growth in the total number of stores (from 532 on December 31, 2023, to 632 on December 31, 2024), as well as an increase in gross margin as a percentage of sales from lower inbound shipping and logistics costs. This was partially offset by slightly higher SG&A expenses, reflecting higher labour and operating costs. The Corporation's investment in Dollarcity is accounted for as a joint arrangement using the equity method.

Net financing costs increased by $9.3 million, from $35.4 million for the fourth quarter of Fiscal 2024 to $44.7 million for the fourth quarter of Fiscal 2025. The increase is mainly due to a higher interest expense on lease liabilities and a decrease in interest income due to lower invested capital.

Net earnings increased by 20.8% to $391.0 million, compared to $323.8 million in the fourth quarter of Fiscal 2024, reflecting an increase in diluted net earnings per common share of 21.7%, from $1.15 to $1.40 per diluted common share, in the fourth quarter of Fiscal 2025.

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(1) Refer to the section entitled "Non-GAAP and Other Financial Measures" of this press release for the definition of these items and, where applicable, their reconciliation with the most directly comparable GAAP measure.

Fiscal 2025 Financial Results

Sales in Fiscal 2025 increased by 9.3% to $6,413.1 million, compared to $5,867.3 million in Fiscal 2024. This increase was driven by growth in the total number of stores over the past 12 months (from 1,551 on January 28, 2024, to 1,616 on February 2, 2025) and increased comparable store sales. Sales for Fiscal 2025 include the 53rd week.

On a 52-week basis, comparable store sales increased 4.6% for Fiscal 2025, consisting of a 6.4% increase in the number of transactions and a 1.7% decrease in average transaction size, over and above comparable store sales growth of 12.8% for Fiscal 2024. The increase in comparable store sales during Fiscal 2025 was supported by a sustained demand for our consumable product offering in a context of continued normalization in comparable store sales trends.

Gross margin was $2,893.7 million or 45.1% of sales in Fiscal 2025, compared to $2,613.4 million or 44.5% of sales in Fiscal 2024. Gross margin as a percentage of sales was higher due to lower inbound shipping and logistics costs.

SG&A for Fiscal 2025 was $930.2 million, a 10.1% increase from $844.9 million for Fiscal 2024. SG&A for Fiscal 2025 represented 14.5% of sales, compared to 14.4% of sales for Fiscal 2024. This variance reflects higher store labour and operating costs, partially offset by the positive impact of scaling.

EBITDA was $2,121.8 million, representing an EBITDA margin of 33.1% of sales, for Fiscal 2025, compared to $1,861.2 million, or an EBITDA margin of 31.7% of sales, for Fiscal 2024.

The Corporation's 50.1% share of Dollarcity's net earnings for the period from January 1, 2024 to June 10, 2024 and its 60.1% share for the period from June 11, 2024 to December 31, 2024 amounted to $129.9 million, compared to $75.3 million for the Corporation's 50.1% share during the same periods last year. This 72.5% increase is primarily attributable to the continued strong operational performance of Dollarcity during the 12‑month period ended December 31, 2024, compared to the same period last year, and the acquisition of an additional 10.0% equity interest in Dollarcity on June 11, 2024. During the 12‑month period ended December 31, 2024, Dollarcity's performance was mainly driven by a 24.5% increase in sales, supported by growth in the total number of stores (from 532 on December 31, 2023, to 632 on December 31, 2024) as well as an increase in gross margin as a percentage of sales from lower inbound shipping and logistics costs. This was partially offset by slightly higher SG&A expenses, reflecting higher labour costs. The Corporation's investment in Dollarcity is accounted for as a joint arrangement using the equity method. Refer to the section entitled "Dollarcity".

Net financing costs increased by $19.0 million from $144.8 million for Fiscal 2024 to $163.8 million for Fiscal 2025. The increase is mainly due to a higher average borrowing rate and debt level from lease liabilities.

Net earnings were $1,168.5 million, or $4.16 per diluted common share, for Fiscal 2025, compared to $1,010.5 million, or $3.56 per diluted common share, for Fiscal 2024.

Dollarcity

Network Growth

During its fourth quarter ended December 31, 2024, Dollarcity opened 44 net new stores, compared to 52 net new stores in the same period last year. For the year ended December 31, 2024, Dollarcity opened 100 net new stores, compared to 92 net new stores in the prior year. As at December 31, 2024, Dollarcity had a total of 632 stores, with 368 locations in Colombia, 108 in Guatemala, 77 in El Salvador and 79 in Peru. This compares to 532 stores as at December 31, 2023.

In Fiscal 2025, Dollarcity and Dollarama agreed on updated governance terms as part of the Dollarcity Transaction, which provide for, among other things, the future expansion of the business into Mexico. Dollarcity now expects to open its first stores in Mexico in the summer of 2025, faster than initially planned as a result of accelerated planning efforts. Dollarcity expects to test its concept before ramping up new store openings in this market and updating its long-term store target.

Dividend

On December 5, 2024, Dollarcity's board of directors approved a cash dividend totaling US$62.5 million. Dollarama's share of the dividend corresponded to US$37.6 million ($54.6 million), reflecting its 60.1% ownership in Dollarcity, and was received in the first quarter of Fiscal 2026. Going forward, dividends are expected to be declared and paid by Dollarcity twice annually.

Dollarama Normal Course Issuer Bid and Dividend

On July 4, 2024, the Corporation announced the renewal of its normal course issuer bid and the approval from the Toronto Stock Exchange to repurchase up to 16,549,476 of its common shares, representing approximately 6.0% of the public float of 275,824,605 common shares as at June 28, 2024, during the 12‑month period starting on July 7, 2024 and ending no later than July 6, 2025 (the "2024-2025 NCIB").

During Fiscal 2025, 8,119,971 common shares were repurchased for cancellation at a weighted average price of $131.55 per share, for a total cash consideration of $1,068.2 million, excluding the tax on share repurchases, under the Corporation's 2024‑2025 NCIB and the normal course issuer bid previously in effect.

On April 3, 2025, the Corporation announced that its board of directors approved a 15.0% increase of the quarterly cash dividend for holders of common shares, from $0.0920 to $0.1058 per common share. This dividend is payable on May 9, 2025 to shareholders of record at the close of business on April 18, 2025. The dividend is designated as an "eligible dividend" for Canadian tax purposes.

Closing of Acquisition of Land for Development of a Logistics Hub in Western Canada(1)

On December 18, 2024, the Corporation completed the previously announced acquisition of land in the Calgary, Alberta region for a total cash consideration of $46.7 million, which takes into account closing adjustments. The purchase price was paid with available cash on hand.

As previously announced, the Corporation intends to build a logistics hub in the Calgary, Alberta region, to service stores in Western Canada, with an estimated total capital expenditure of approximately $450.0 million to be disbursed over a three-year period. Capital expenditures in respect of the Fiscal 2026 outlook currently excludes the portion that will be deployed in the year as the Corporation is in the process of completing its three-year plan and the timing of such expenditures.

Fiscal 2026 Outlook and Capital Allocation Strategy(1) (2)

While consumer behaviour and the path of the economy remain hard to predict, the Corporation believes that consumers will continue to respond positively to the affordability of its products, the convenience and proximity of its national store network, and its commitment to offering compelling value across its broad assortment of consumables, seasonal items and general merchandise.

Given heightened uncertainty stemming from the current economic and trade environment, the 17.4% cumulative increase in comparable stores sales over the last two fiscal years, and assuming continued cautious discretionary spending by consumers, the Corporation anticipates generating comparable store sales growth of between 3.0% and 4.0% in Fiscal 2026, supported by its strong product sourcing and merchandising expertise and the regular refresh of its assortment. The Corporation improved its guidance range for gross margin as a percentage of sales compared to prior year, based on its ability to actively manage product margins, partially offset by higher inbound shipping costs. It also expects ongoing efficiency and labour productivity initiatives to offset the impact of higher store labour and operating costs, resulting in an improved guidance range in SG&A as a percentage of sales compared to the prior year.

As a result of opportunities to take over leases from certain retailers exiting the market and its strong real estate pipeline, the Corporation may exceptionally open a higher number of net new stores during Fiscal 2026 compared to historical levels. As such, the Corporation has increased its net new store openings guidance range compared to the prior year.

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(1) To be read in conjunction with the "Forward-Looking Statements" section of this press release.

(2) All Fiscal 2026 guidance does not take into consideration the proposed acquisition of The Reject Shop Limited by the Corporation. Refer to the Corporation's press release dated March 26, 2025 for information regarding the transaction.

In addition to the logistics hub, the Corporation expects to allocate capital expenditures towards new store openings, maintenance and other transformational capital requirements, which are expected to be mainly funded with cash flow from operating activities and are not anticipated to impact the Corporation's shareholder capital return strategy. In addition to its intent to maintain a dividend subject to quarterly approval, the Corporation anticipates to continue allocating the majority of excess cash toward the repurchase of shares through its normal course issuer bid.

A summary of the Corporation's guidance ranges for Fiscal 2026, as well as how it performed against Fiscal 2025 guidance, is provided below:

(as a percentage of sales except net new storeopenings in units and capital expenditures inmillions of dollars)

Fiscal 2025

Fiscal 2026(ii)

Guidance

Actual results

Guidance

Net new store openings

60 to 70

65

70 to 80

Comparable store sales

3.5% to 4.5%

4.6 %

3.0% to 4.0%

Gross margin

44.0% to 45.0%

45.1 %

44.2% to 45.2%

SG&A

14.5% to 15.0%

14.5 %

14.2% to 14.7%

Capital expenditures(i)

$175.0 to $200.0

$195.3

$185.0 to $210.0

(i)

For Fiscal 2025, capital expenditures excluded $46.7 million for the cost of the land in the Calgary, Alberta region and $4.9 million in land development costs. Capital expenditures in respect of the Fiscal 2026 outlook excludes costs related to the development of logistics hub.

(ii)

All Fiscal 2026 guidance does not take into consideration the proposed acquisition of The Reject Shop Limited by the Corporation. Refer to the Corporation's press release dated March 26, 2025 for information regarding the transaction.

These guidance ranges are based on several assumptions, including the following:

The number of signed offers to lease and store pipeline for the next 12 months, the absence of delays outside of our control on construction activities and no material increases in occupancy costs in the short- to medium-term

Approximately three months visibility on open orders and product margins 

Continued positive customer response to our product offering, value proposition and in-store merchandising

The active management of product margins, including through pricing strategies and product refresh, and of inventory ...