Dollarama Q2 Results: EPS $1.29 Beat and a Guidance Raise
Dollarama’s Q2 fiscal 2027 results, released before the open on Wednesday, September 16, cleared consensus on both headline lines and came with something the street had not been given since March: a higher number for the year. Diluted EPS of $1.29 beat the Yahoo consensus of $1.2556 from nine analysts by 2.7%. Sales of $2,026.6 million edged the $2,022.9 million consensus of 14 analysts by 0.2%. Alongside them, the company lifted its fiscal 2027 Canadian comparable store sales guidance to 4.0% to 4.5%, from the 3.0% to 4.0% range set on March 24, and raised expected net new Canadian store openings to 65 to 75 from 60 to 70.
One caveat on that raise, because it is easy to overstate. Dollarama guides the Canadian segment only. It publishes no consolidated revenue, earnings or EPS outlook, and none for Australia or Dollarcity. The gross margin (45.0% to 45.5%), SG&A (14.1% to 14.6%) and capital expenditure ($420.0 million to $470.0 million) ranges were all left unchanged.
The quality of the beat matters too. In the first quarter, a fair-value gain on the Dollarcity call option added roughly $0.06 to diluted EPS. This quarter that line was nil in both the current and prior-year periods. The $1.29 is reported GAAP diluted EPS, with no separate adjusted figure and no derivative mark inside it.
Q2 FY2027 versus Q2 FY2026
| Measure | Q2 FY2027 | Q2 FY2026 |
|---|---|---|
| Sales | $2,026.6M | $1,723.8M |
| Gross profit | $900.9M | $784.5M |
| Gross margin | 44.5% | 45.5% |
| SG&A | $306.7M (15.1% of sales) | $241.2M (14.0% of sales) |
| EBITDA | $653.0M (32.2% margin) | $588.5M (34.1% margin) |
| Operating income | $517.3M (25.5% margin) | $483.5M (28.0% margin) |
| Net earnings | $349.3M | $321.5M |
| Diluted EPS | $1.29 | $1.16 |
| Declared dividend per share | $0.1200 | $0.1058 |
Figures from Dollarama’s Selected Consolidated Financial Information for the 13 weeks ended August 2, 2026 and August 3, 2025. Gross margin, EBITDA and margin, operating margin and SG&A as a percentage of sales are company non-GAAP or supplementary measures. Read the comparatives with care: the prior-year quarter included Dollarama Australia for only the 13-day post-acquisition period of July 22 to August 3, 2025, worth $25.7 million of sales, while this quarter carries a full three months of it.
The base effect, resolved
Our Q2 preview argued that this was the first quarter with Australia fully in the base against a prior-year bar set almost without it, and that the deciding number would be consolidated gross margin against the 45.5% it had to beat. That played out close to the framing, with a more favourable answer than the preview expected.
Consolidated gross margin landed at 44.5%, a full percentage point below last year. The company attributes 110 basis points of that to the full quarter of Australian operations and their lower gross margin. Strip Australia out and the Canadian business went the other way: gross margin of 45.7% against 45.6%, which Dollarama credits to the positive impact of scaling. The same pattern repeats one line down. Consolidated SG&A rose to 15.1% of sales from 14.0%, again a 110 basis point Australian effect, while Canadian SG&A held at 13.8% of sales, unchanged year over year.
Where the preview was too conservative was earnings. It implied EPS growth of roughly 8% against revenue growth of roughly 17%. Revenue grew 17.6%, but EPS grew 11.2%, and three things moved in the same direction. Canadian comparable store sales rose 5.4%, made up of a 3.7% increase in transactions and a 1.7% increase in average basket, on top of 4.9% growth a year earlier. Canadian EBITDA margin improved to 34.9% of segment sales from 34.5%. And the share count fell, to 271.5 million diluted weighted average shares from 278.2 million. Below the operating line, net financing costs rose to $51.2 million from $43.2 million, mostly on higher average Canadian debt after the fixed rate note issuances in the first quarter.
Canada is running above the old range
The guidance raise concedes a trend already visible in the numbers. Canadian comps grew 5.6% in the first quarter and 5.4% in the second, both above the 3.0% to 4.0% band set in March, with first-half comps at 5.5%. First-half sales of $3,872.7 million were up 19.3%, and first-half diluted EPS reached $2.39 from $2.14.
Chief executive Neil Rossy tied the performance to household behaviour: “At a time when households are making careful spending decisions, customers continued to count on Dollarama for dependable value. Together with the execution of our teams, this contributed to our strong second-quarter performance and supports the increase in our annual Canadian Comparable store sales and net new store opening guidance.”
Store growth in Canada slowed within the quarter itself, at 15 net new stores against 27 a year earlier, though the network still finished at 1,734 stores versus 1,665. Consolidated capital expenditure more than doubled, to $126.1 million from $60.7 million.
Australia is still a loss, and is expected to stay one
The Australian segment produced $184.8 million of sales, about 9.1% of the consolidated total, at a 32.4% gross margin with SG&A running at 28.1% of sales. It lost $13.8 million, a negative $0.05 impact on consolidated diluted EPS. The outlook is explicit that the company “continues to expect a net loss for the Australian segment in fiscal 2027,” citing business transformation initiatives and investment.
That transformation is visible but early. The network stood at 414 stores against 402 at the end of fiscal 2026, with 4 net new stores and 25 renovations in the quarter. Sixty locations now carry Dollarama’s layout and fixtures, all still trading under the legacy banner.
Dollarcity did the offsetting
Dollarama’s share of net earnings from equity-accounted investments rose to $49.9 million from $38.3 million, covering Dollarcity’s quarter ended June 30, 2026 under its calendar-quarter lag. Inside that: a 60.1% share of CARS net earnings of $55.6 million, up 39.7%, less an 80.05% share of a $5.7 million net loss at ICM, the Mexico vehicle, which lost $1.5 million a year earlier. Dollarcity sales grew 30.0% and the chain finished at 781 stores, split 432 in Colombia, 124 in Guatemala, 116 in Peru, 88 in El Salvador and 21 in Mexico.
After quarter end, on August 19, the CARS board approved a $125.0 million USD cash dividend. Dollarama’s share is $75.1 million USD ($103.8 million), received in the third quarter, and $38.0 million USD ($52.4 million) of it went back out as a capital contribution to ICM for the Mexico build-out.
The dividend, and what the buyback paid
The board declared a quarterly dividend of $0.1200 per share on September 16, payable November 6 to shareholders of record on October 9, designated an eligible dividend for Canadian tax purposes. That is 13.4% above the $0.1058 declared a year earlier, and it represents 9.3% of the quarter’s diluted EPS. Readers weighing a payout ratio that low against higher-yielding names can compare it with our coverage of Canadian dividend stocks.
The buyback is where the capital actually goes. Dollarama repurchased 1,596,016 shares for $300.4 million during the quarter at a weighted average of $188.23, excluding the tax on share repurchases, equal to 86.0% of the quarter’s net earnings. The stock closed at $174.56 on the day the results were published. The renewed normal course issuer bid, effective July 3, allows up to 13,532,086 shares, 5.0% of the shares outstanding as at June 30, 2026, through to July 6, 2027.
Dollarama diluted EPS, fiscal 2022 to 2026, from the company’s fourth-quarter and full-year earnings releases.
Across those five fiscal years diluted EPS ran $2.18, $2.76, $3.56, $4.16 and $4.73, with fiscal 2025 a 53-week year.
The market’s answer
The stock went into this print at its lows. It closed at $165.50 on Tuesday, September 15, down 1.69%, and that session’s low of $163.25 is the 52-week low. On report day it opened at $172.22 and closed at $174.56, up 5.47% on volume of 1,592,409 shares. As of 14:08 ET on Thursday, September 17, it traded at $171.57, down 1.71% on the day, giving back part of the move. The 52-week range now runs $163.25 to $209.96. Market figures data as of September 17, 2026, intraday. Source: StockAnalysis. Our run-up piece covered the setup into the report.
What the quarter settles is that the Canadian business is compounding faster than the company’s own March guidance assumed, fast enough to absorb a loss-making Australian segment and higher financing costs and still grow EPS 11.2%. What it does not settle is Australia, which the company itself expects to lose money for the full year, or how long a 45.7% Canadian gross margin holds. The full numbers are in Dollarama’s fiscal 2027 second-quarter results release.
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