Dollarama Inc. (DLMAF) Financial Performance Analysis

• Earnings per share slightly missed estimates at $0.703, but overall financial performance in Q3 2025 was strong.
• Sales increased by 5.7% to $1.56 billion, with a notable rise in comparable store sales by 3.3%.
• EBITDA and operating income saw increases of 6.5% and 5.4%, respectively, demonstrating efficient operations and profitability.

Dollarama Inc., trading under the symbol DLMAF on the PNK exchange, is a prominent Canadian discount retailer. The company operates a vast network of stores offering a wide range of affordable products. Dollarama competes with other discount retailers like Dollar Tree and Family Dollar. The company is known for its value-driven business model, which appeals to cost-conscious consumers.

On December 4, 2024, Dollarama reported earnings per share of $0.703, slightly below the estimated $0.704. Despite this minor shortfall, the company demonstrated strong financial performance in its Q3 2025 results. Sales increased by 5.7% to $1.56 billion, surpassing the previous year's $1.48 billion. This growth was supported by a 3.3% rise in comparable store sales, building on an 11.1% increase from the prior year.

Dollarama's EBITDA rose by 6.5% to $509.7 million, with an EBITDA margin of 32.6%. Operating income also increased by 5.4% to $407.5 million, maintaining an operating margin of 26.1%. These figures highlight the company's ability to efficiently manage its operations and generate profits. The diluted net earnings per share saw a 6.5% rise to $0.98, reflecting the company's strong financial health.

The company opened 18 new stores, compared to 16 in the previous year, and repurchased 1,360,635 common shares for $186.2 million. Dollarama plans to expand its long-term store target in Canada to 2,200 stores by 2034. Additionally, the company has entered into an agreement to acquire land in Calgary, Alberta, to develop a logistics hub in Western Canada, supporting its growth strategy.

Dollarama's financial metrics provide further insight into its performance. The company has a price-to-earnings (P/E) ratio of approximately 36, indicating investor confidence. Its price-to-sales ratio is about 6.43, and the enterprise value to sales ratio is around 7.14, reflecting the market's valuation of the company's sales. The debt-to-equity ratio is roughly 1.92, suggesting a balanced approach to financing. The current ratio of approximately 1.99 indicates strong short-term financial health.