Dollarama Inc. – Scaling Value Retail with Global Expansion Optionality

Section 1: Introduction

Inflation Report Coverage:

• Inflation report highlights how inflation impacts sectors differently, favoring value and defensive sectors like Energy, Materials, Consumer Staples, Healthcare, Utilities, select Financials, and REITs with inflation-indexed leases, while rate-sensitive sectors like Consumer Discretionary and high-growth Tech typically underperform.
• The report focuses on companies with proven business models, steady financials, high free cash flow, and solid ROE that can pass on costs to customers and protect margins. The aim is to identify stock that can outperform inflation via capital gains and dividends, supporting diversified sectoral exposure.

Stock Covered:

• Dollarama Inc. (TSX: DOL) reported healthy Fiscal 2026 results with double-digit revenue growth, steady comparable sales, and continued expansion across Canada and international markets. The company delivered healthy earnings growth, maintained high margins despite international headwinds, and returned significant capital via buybacks and dividends, while advancing its Australia transformation and Dollarcity expansion to support long-term growth.

Section 2: Company Overview

Dollarama Inc. (TSX: DOL) is a Canada-based company principally engaged in operating discount retail stores. The company provides a broad range of everyday consumer products, general merchandise, and seasonal items, with merchandise at low fixed price points. General merchandise and consumer products jointly account for the majority of the company's product offerings. The company's stores are throughout Canada, generally located in convenient locations, such as metropolitan areas, midsize cities, and small towns. All the stores are owned and operated by the company.

Kalkine’s Inflation Report covers the Investment Highlights, Key Financial Metrics, Risks, Technical Analysis along with the Valuation, Target Price, and Recommendation on the stock.

The top 10 shareholders together form ~24.86% of the total shareholding. Caisse de Depot et Placement du Quebec and The Vanguard Group, Inc. hold a maximum stake in the company at ~4.35% and ~3.39%, respectively.

The company reported rising financials in Q4 2026, where it clocked healthy growth under its Pretax ROA, which is a key positive. Furthermore, it witnessed elevated Pretax ROE and Asset to Equity Ratio, displaying its decent income stability and operational strength.

Section 2: Business Updates and Financial Highlights

The picture below gives an overview of the company’s recent activity, such as an announcement regarding Australia Transformation: Strategic Reset Phase.

Section 3: Key Risks and Company Outlook

Section 4: Stock Recommendation Summary

The stock has witnessed a downside of ~14.01% and ~17.75% over the last 1 month and 3 months respectively. Moreover, it is trading below the average 52-week high price of CAD 209.96 and 52-week low price of CAD 147.00, providing an opportunity to accumulate the stock.

Valuation Methodology: EV to Sales Based Relative Valuation (Illustrative):

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is March 26, 2026. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Dividend Yield may vary as per the stock price movement. 

Note 5: Kalkine reports are prepared based on the stock prices captured either from REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 25-30 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and the uptrend may take a pause due to profit booking or selling interest.

Stop-loss: In general, it is a level to protect further losses in case of any unfavourable movement in the stock prices.