Grocery bills keep climbing, and higher rents are eating into disposable income. And yet Canadians keep walking into Dollarama (TSX: DOL) stores amid a challenging macro environment.
Dollarama is a recession-resistant company and thrives across economic cycles. The retailer just posted another strong quarter and, more importantly, told investors it expects things to get even better.
Valued at a market cap of $48 billion, Dollarama stock has returned more than 400% to shareholders over the past decade.
So does that mean now is the time to buy?
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Why Dollarama stock keeps showing up on investor watchlists
Trade tensions, high oil prices, and a wary consumer have impacted investor sentiment in 2026. Yet on the September 16 earnings call, CEO Neil Rossy explained why that backdrop is not company-threatening.
“I think it’s our job to continue to stay focused on being the best relative value that we can be in our category of goods,” Rossy told analysts, “and to make the shopping experience as pleasant as possible, and to have as many convenient locations as we can across each of our markets. That’s our job.”
Dollarama’s second-quarter sales jumped 17.6% to more than $2 billion. Net earnings stood at $349.3 million, or $1.29 per share, up from $1.16 per share in the year-ago period.
Comparable store sales in Canada, a key measure of how existing locations are performing, rose 5.4%, up from 4.9% the year before.
The results were strong enough that Dollarama raised its full-year same-store sales target to 4% to 4.5%, up from 3% to 4%. Management also raised its store-opening guidance for the year, now expecting between 65 and 75 net new Canadian locations instead of 60 to 70.
What could slow Dollarama down
No growth story is without risk, and Dollarama’s leadership was upfront about theirs.
Higher oil prices are pushing up freight costs, and CFO Patrick Bui warned those pressures will likely intensify through the third quarter.
Canadian counter-tariffs on U.S. goods are another cost the company has to manage, even if Bui called the impact “manageable.”
Then there’s Australia, where Dollarama is still working through a multi-year turnaround. The segment posted roughly $25 million in operating losses through the first half, and management expects that loss to widen before the seasonally stronger fourth quarter kicks in.
Mexico, by contrast, looks like an early bright spot. The country went from 11 stores to 21 in a single quarter, and Bui said the consumer response has mirrored what the company saw in earlier Latin American markets, all of which eventually turned profitable.
Is Dollarama stock worth buying now?
Dollarama isn’t a cheap stock, and trades at a forward price-to-earnings multiple of 33.5 times. However, analysts forecast adjusted earnings per share to expand by 12.5% annually over the next five years.
Investors pay a premium for consistency, and Dollarama continues to deliver. It grew revenue across key markets while profit margins remained steady despite rising costs.
The company also rewarded shareholders directly, repurchasing more than 1.5 million shares for $300.4 million and declaring a quarterly dividend of $0.12 per share.
For long-term investors who value steady execution over flashy upside, Dollarama’s combination of defensive appeal and growth potential in Latin America, Mexico, and Australia makes a compelling case.
Short-term traders chasing quick swings may find less to love here, given the stock’s already rich valuation. Either way, Dollarama is a name worth watching closely as the retailer heads into its historically important holiday quarter.
