Dollarama Inc (TSX:DOL) stock popped almost 10% after the Canadian discount retailer reported strong sales growth for the first quarter, as cost-conscious consumers prioritize value amid persistent inflation.
First quarter sales were up 8.2% year-over-year at C$1.52 billion, beating estimates of C$1.5 billion.
Comparable store sales were up 4.9%, driven by a 3.7% increase in the number of transactions and a 1.2% increase in average transaction size. Analysts had expected same store sales growth of 3.4%.
The company noted strong demand for consumables in addition to the positive performance of its seasonal offerings.
Earnings per share were C$0.98, up from C$0.77 in the year-ago quarter and topping estimates of C$0.84.
“We are off to a strong start to fiscal 2026 as we successfully pursue our Canadian growth, with comparable store sales supported by sustained consumables demand and positive seasonal offering performance,” Dollarama CEO Neil Rossy said in a statement.
“Dollarcity also continued to deliver value and advance its expansion plans, with the first stores in Mexico slated to open imminently.”
The company’s international growth initiatives are also extending to Australia, where Dollarama is in the process of acquiring The Reject Shop.
“With The Reject Shop shareholders set to vote later this month, our acquisition of Australia’s largest discount retailer remains on track and is expected to close by the end of July,” Rossy said.
Shares of Dollarama had added 9.6% to about C$193 at midday in Toronto.