Dollarama raises annual sales forecast as consumers opt for cheaper alternatives (updated)

Dollarama

11/12/2025 12:20

Adds share movement in paragraph 2, analyst comment in paragraph  6

By Koyena Das

Dec 11 (Reuters) - Canadian retailer Dollarama DOL.TO on Thursday raised its annual sales forecast after beating analysts' estimates for third-quarter results, as price-sensitive shoppers turned to its stores for affordable consumables and seasonal merchandise.

Toronto-listed shares of the company rose about 2%.

Discounted goods ranging from pantry staples to cleaning supplies and personal care items have been a steady draw for consumers dealing with tighter wallets and stubborn inflation, boosting sales at dollar stores.

Inflation in Canada is expected to be temporarily higher in the near term, even as the economy seems to be broadly resilient to the impact of U.S. trade measures.

The company's CEO Neil Rossy said the business was sustaining growth in an "unpredictable" economic environment thanks to its cost discipline and business expansion in Latin America and Australia.

The forecast and strong recent performance point to another solid year, RBC Capital Markets analyst Irene Nattel said, noting it could be tempered by "caution around evolution of consumer spending."

U.S.-based discount retailers Dollar Tree DLTR.O and Dollar General DG.N raised their sales and profit forecasts each last week, helped by strong demand from deal-hunting consumers.

Dollarama expects fiscal 2026 comparable sales for its Canadian segment to grow in the range of 4.2% to 4.7%, compared to previous expectations of a 3% to 4% rise.

It forecast annual margin in the range of 45% to 45.5% compared to its prior target of 44.2% to 45.2%.

The company said the forecast does not include its Australian operations related to the acquisition of Reject Shop in March.

Net sales for the third quarter ended November 2 came in at C$1.91 billion ($1.38 billion), above analysts' average estimate of C$1.87 billion, according to data compiled by LSEG.

It earned C$1.17 per share, beating estimates of C$1.10 per share.

($1 = 1.3794 Canadian dollars)

 (Reporting by Koyena Das in Bengaluru; Editing by Shailesh Kuber)

 ((koyena.das@thomsonreuters.com))