Dollarama Inc. (DOL:CA)
Dollarama Inc. received a 12 month target price increase from Jefferies & Company to C$235 from C$223, following the company’s stronger-than-expected third-quarter results, continued momentum in international markets, and an upward revision to its fiscal 2026 guidance. Jefferies reiterated its constructive outlook on the discount retailer, highlighting Dollarama’s ability to deliver resilient sales growth despite a challenging macroeconomic environment marked by elevated living costs and shifting consumer spending patterns.
Jefferies pointed to the company’s robust same-store sales performance, driven by steady traffic gains and an expanding product assortment that continues to resonate with value-seeking consumers. Dollarama’s disciplined pricing strategy and tight cost controls have also supported margin expansion, further strengthening the company’s earnings outlook.
The analyst emphasized that international expansion, particularly through its majority stake in Latin American retailer Dollarcity, remains a key long-term growth catalyst. Dollarcity continues to post strong unit growth and rising profitability, offering Dollarama a scalable platform in high-growth emerging markets. Jefferies noted that this international segment is increasingly contributing to consolidated results and provides a material runway for store openings through 2026 and beyond.
Dollarama’s decision to raise its FY26 guidance reinforced Jefferies’ optimism, as it signals confidence in sustained demand, operational efficiency, and the company’s ability to navigate cost inflation and supply-chain pressures. The updated guidance reflects expectations for continued network expansion, stable margins, and solid free-cash-flow generation.
Jefferies’ valuation adjustment underscores the view that Dollarama remains one of the strongest defensive growth stories in Canadian retail, well-positioned to benefit from economic uncertainty while still delivering dependable, long-term earnings expansion.
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