Q4 2026 Dollarama Inc Earnings Call

March 24, 2026

Operator 1: Today's call is Neil Rossy, President and CEO, and Patrick Bui, CFO. They will begin with brief remarks followed by Q&A with financial analysts. Before we begin, please note that today's remarks may contain forward-looking statements about Dollarama's current and future plans, expectations, intentions, results, or any other future events or developments. Forward-looking statements are based on information currently available to management and on reasonable estimates and assumptions made by management. Many factors could cause actual results, future events or developments to differ materially from those expressed or implied. You are cautioned not to place undue reliance on these forward-looking statements. Forward-looking statements represent management's expectations as at 24 March 2026. Except as may be required by law, Dollarama has no intention and undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Operator: Today's call is Neil Rossy, President and CEO, and Patrick Bui, CFO. They will begin with brief remarks followed by Q&A with financial analysts. Before we begin, please note that today's remarks may contain forward-looking statements about Dollarama's current and future plans, expectations, intentions, results, or any other future events or developments. Forward-looking statements are based on information currently available to management and on reasonable estimates and assumptions made by management. Many factors could cause actual results, future events or developments to differ materially from those expressed or implied. You are cautioned not to place undue reliance on these forward-looking statements. Forward-looking statements represent management's expectations as at 24 March 2026. Except as may be required by law, Dollarama has no intention and undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Speaker #1: Today's call is Neil Rossi, President and CEO, and Patrick Bui, CFO. They will begin with brief remarks followed by a Q&A with financial analysts.

Speaker #1: Before we begin, please note that today's remarks may contain forward-looking statements about Dollarama's current and future plans, expectations, intentions, results, or any other future events or developments.

Speaker #1: Forward-looking statements are based on information currently available to management and on reasonable estimates and assumptions made by management. Many factors could cause actual results, future events, or developments to defer materially from those expressed or implied.

Speaker #1: Your caution not to place undue reliance on these forward-looking statements. Forward-looking statements represent management's expectations as at March 24, 2026. Except as may be required by law, Dollarama has no intention and undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

Operator 1: You are invited to consult the cautionary statement on forward-looking statements in Dollarama's management's discussion and analysis dated 24 March 2026. All forward-looking statements on today's call are expressly qualified by this cautionary statement. In addition, Dollarama may refer to certain non-GAAP and other financial measures during the call. Please consult the non-GAAP and other financial measures section of Dollarama's MD&A dated 24 March 2026 for definitions, reconciliations with appropriate GAAP measures, and other information. The disclosure documents related to this call are available in the investor relations section of dollarama.com and on SEDAR+. I will now turn the call over to Neil Rossy.

Operator: You are invited to consult the cautionary statement on forward-looking statements in Dollarama's management's discussion and analysis dated 24 March 2026. All forward-looking statements on today's call are expressly qualified by this cautionary statement. In addition, Dollarama may refer to certain non-GAAP and other financial measures during the call. Please consult the non-GAAP and other financial measures section of Dollarama's MD&A dated 24 March 2026 for definitions, reconciliations with appropriate GAAP measures, and other information. The disclosure documents related to this call are available in the investor relations section of dollarama.com and on SEDAR+. I will now turn the call over to Neil Rossy.

Speaker #1: You are invited to consult the cautionary statement on forward-looking statements and Dollarama's management's discussion and analysis dated March 24, 2026. All forward-looking statements on today's call are expressly qualified by this cautionary statement.

Speaker #1: In addition, Dollarama may refer to certain non-GAAP and other financial measures during the call. Please consult the non-GAAP and other financial measures section of Dollarama's MD&A dated March 24, 2026, for definitions, reconciliations with appropriate GAAP measures, and other information.

Speaker #1: The disclosure documents related to this call are available in the Investor Relations section of Dollarama.com and on Cedar Plus. I will now turn the call over to Neil Rossi.

Neil Rossy: Thank you, operator, and good morning, everyone. For fiscal 2026, we are pleased to have met or exceeded our financial guidance on all metrics while we also advanced our growth ambitions. We generated same-store sales of 4.2% in Canada for the year and delivered strong earnings growth with EPS increasing nearly 14% year-over-year. Fiscal 2026 also marked a significant milestone in our international expansion with Dollarcity entry into Mexico and our acquisition of a national discount chain in Australia. In Canada, our compelling value continued to resonate in an economic environment that has weighed on consumer sentiment and discretionary spending. As Canadians face pressures on their household budgets, they turn to Dollarama for year-round value and everyday convenience. Throughout the year, our full assortment contributed to solidifying Dollarama as a destination for affordable goods across our product categories.

Speaker #2: Thank you, Operator, and good morning, everyone. For fiscal 2026, we are pleased to have met or exceeded our financial guidance on all metrics. While we also advanced our growth ambitions.

Speaker #2: We generated same-store sales of $4.2% in Canada for the year, and delivered strong earnings growth with EPS increasing nearly 14% year over year. Fiscal 2026 also marked a significant milestone in our international expansion.

Speaker #2: With Dollar City entry into Mexico and our acquisition of a national discount chain in Australia. In Canada, our compelling value continued to resonate in an economic environment that is weighed on consumer sentiment and discretionary spending.

Speaker #2: As Canadians face pressures on their household budgets, they turn to Dollarama for year-round value and everyday convenience. Throughout the year, our full assortment contributed to solidifying Dollarama as a destination for affordable goods across our product categories.

Neil Rossy: We experienced solid demand for general merchandise and seasonal items, which speaks to the strength of our buying team and direct sourcing platform. We also saw continued sustained demand for consumable products, which speaks to our ability to offer strong value for sought-after everyday essentials. Unfortunately, the weather did hamper our Q4 performance, which was off to a good start. Unfavorable weather conditions across Canada directly impacted both store traffic and peak sale periods through to the end of January. However, we nonetheless generated 1.5% same-store sales growth in the quarter, with basket growth driven by a positive seasonal performance. In Canada, we successfully opened an exceptional 75 net new stores in fiscal 2026. This brought our network across the country to 1,691 stores by the end of January.

Speaker #2: We experienced solid demand for general merchandise and seasonal items, which speaks to the strength of our buying team and direct sourcing platform. We also saw continued sustained demand for consumable products, which speaks to our ability to offer strong value for sought-after everyday essentials.

Speaker #2: Unfortunately, the weather did hamper our fourth-quarter performance. Which was off to a good start. Unfavorable weather conditions across Canada directly impacted both store traffic and peak sale periods.

Speaker #2: Through to the end of January. However, we nonetheless generated $1.5% same-store sales growth in the quarter with basket growth driven by a positive seasonal performance.

Speaker #2: In Canada, we successfully opened an exceptional $75 net new stores in fiscal 2026. This brought our network across the country to 1,691 stores by the end of January.

Neil Rossy: For fiscal 2027, we are returning to our historical cadence of annual net new store openings in the range of 60 to 70. This past February, we hit another real estate milestone with the opening of our 1,700th store in Canada. We are making steady progress towards our long-term target of 2,200 stores by 2034. Reaching this threshold of stores requires us to grow our distribution and warehousing capacity in tandem. The development of our logistics hub in Western Canada is moving along well. Having made significant progress building the structure with everything moving along on time and on budget, we are on track to have our Calgary hub operational by the end of 2027. Having a two-node logistics model support our long-term growth in Canada and bring added resilience to our logistics through redundancy.

Speaker #2: For fiscal 2027, we are returning to our historical cadence of annual net new store openings in the range of 60 to 70. This past February, we hit another real estate milestone with the opening of our 1,700th store in Canada.

Speaker #2: We are making steady progress towards our long-term target of 2,200 stores by 2034. Reaching this threshold of stores requires us to grow our distribution and warehousing capacity in tandem.

Which speaks to our ability to offer strong value for sought-after, everyday essentials.

Speaker #2: The development of our logistics hub in Western Canada is moving along well. Having made significant progress building the structure, with everything moving along on time and on budget, we are on track to have our Calgary hub operational by the end of 2027.

Unfortunately, the weather did hamper our fourth quarter performance.

Which was off to a good start. Unfavorable weather conditions across Canada, directly impacted both store traffic and Peak sale periods.

Through to the end of January.

Speaker #2: Having a two-node logistics model support our long-term growth in Canada and bring added resilience to our logistics through redundancy. By applying our proven business model, Dollar City continues to generate strong top-line momentum, margin expansion, and footprint growth across our core markets in Latin America.

However, we nonetheless generated 1.5% same-store sales growth in the quarter, with basket growth driven by a positive seasonal performance.

Neil Rossy: By applying our proven business model, Dollarcity continues to generate strong top-line momentum, margin expansion, and footprint growth across our core markets in Latin America. This is translating into impressive year-over-year network and earnings growth. Consistent with the prior year, Dollarcity opened 100 net new stores in 2025, bringing its total store count to just over the 700-store threshold at year-end. This includes 11 stores in Mexico since entry last summer, where we are now building a new growth platform. Dollarcity is well on its way to achieving its store target of 1,050 stores by 2034. As a reminder, this excludes Mexico, for which we have not yet set a long-term target.

In Canada, we successfully opened an exceptional 75. Net new stores in fiscal 2026.

This brought our network across the country to 1,691 stores by the end of January.

Speaker #2: This is translating into impressive year-over-year network and earnings growth. Consistent with the prior year, Dollar City opened 100 net new stores in 2025, bringing its total store count to just over the 700 store threshold at year-end.

For fiscal 2027, we are returning to our historical Cadence of annual net new store openings in the range of 60 to 70.

This past February, we hit another real estate milestone with the opening of our 1,700th store in Canada.

Speaker #2: This includes 11 stores in Mexico since entry last summer, where we are now building a new growth platform. Dollar City is well on its way to achieving its store target of 1,050 stores by 2034.

We are making steady progress towards our long-term target of 2,200 stores by 2034.

reaching this threshold of stores requires us to grow our distribution and warehousing capacity in tandem

Speaker #2: As a reminder, this excludes Mexico for which we have not yet set a long-term target. In fiscal 2027, Dollar City will continue to grow in its four first four countries of operation in Latam, with a focus on growth in Colombia and Peru.

the development of our Logistics Hub in western Canada is moving along. Well,

Neil Rossy: In fiscal 2027, Dollarcity will continue to grow in its first four countries of operation in LATAM with a focus on growth in Colombia and Peru. At the same time, we will be carefully scaling our presence and operations in Mexico. While it is still early days, we continue to be pleased with the team's execution and initial customer reception. Over the last few months, we have been firming up our plans in fiscal 2027 priorities for our multi-year transformation of our retail platform in Australia. We have several initiatives underway across 3 main pillars: merchandising, store experience and network growth, and operational excellence. Deploying aspects of our model is impacting just about every facet of the business.

having made significant progress building the structure.

Everything moving along on time and on budget, we are on track to have our Calgary have operational by the end of 2027.

Speaker #2: At the same time, we will be carefully scaling our presence and operations in Mexico. While it is still early days, we continue to be pleased with the team's execution and initial customer reception.

Having a two-node logistics model supports our long-term growth in Canada and brings added resilience to our logistics through redundancy.

Speaker #2: Over the last few months, we have been firming up our plans in fiscal 2027, priorities for our multi-year transformation of our retail platform in Australia.

By applying our proven business model, Dollar City continues to generate strong topline momentum, margin expansion, and footprint growth across our core markets in Latin America.

This is translating into impressive year-over-year Network and earnings growth.

Speaker #2: We have several initiatives underway across three main pillars. Merchandising, store experience and network growth, and operational excellence. Deploying aspects of our model is impacting just about every facet of the business.

Consistent with the prior year Dollar city opened 100. Net new stores in 2025 bringing its total store count to just over the 700 store threshold, a year, end.

Neil Rossy: In the near term and through fiscal 2027, this work will be both gradual and disruptive, but it is a prerequisite to setting up our Australian operations for future success. Changing the merchandising strategy is the most important pillar of the transformation and the most complex to implement. We expect our first Dollarama import SKUs to start hitting shelves during Q2 of fiscal 2027, with imports primarily comprised of general merchandise and seasonal items. The target is to have about a half of the Dollarama import SKUs sourced by the end of fiscal 2027. On the domestic side, which is primarily consumables, we are also looking at products SKU by SKU to deliver increased value to our customers.

Speaker #2: In the near term and through fiscal 2027, this work will be both gradual and disruptive. But it is a prerequisite to setting up our Australian operations for future success.

We are now building a new growth platform.

Speaker #2: Changing the merchandising strategy is the most important pillar of the transformation, and the most complex to implement. We expect our first Dollarama import skews to start hitting shelves during the second quarter of fiscal 2027.

Dollar City is well on its way to achieving its store. Target of 1,050. Stores by 2034, as a reminder. This excludes Mexico for which we have not yet set a long-term Target.

In fiscal 2027 Dollar City will continue to grow in its 4. First 4 countries of operation and latam

Speaker #2: With imports primarily comprised of general merchandise and seasonal items. The target is to have about a half of the Dollarama import skews sourced by the end of fiscal 2027.

the focus on growth in Colombia and Peru.

The same time, we will be carefully. Scaling our presence and operations in Mexico.

Speaker #2: On the domestic side, which is primarily consumables, we are also looking at products skew by skew to deliver increased value to our customers. Under store experience and network growth, our goal is to renovate the layout and change fixtures in 60 to 80 stores this year.

While it is still early days, we continue to be pleased with the team's execution and initial customer reception.

Neil Rossy: Under store experience and network growth, our goal is to renovate the layout and change fixtures in 60 to 80 stores this year, having done 4 last year. We also aim to open 15 to 25 net new stores, all with the Dollarama layout and fixtures, having opened 7 in fiscal 2026. On operational excellence, we are strengthening the IT infrastructure and optimizing various processes. Notably, we are working on migrating Australia's ERP system to ours to get all our business processes integrated to the same platform. On the logistics front, we are finalizing our plan to optimize operations and support long-term growth. We are also adding team members as we build the bench strength of the local team. Once a store feels like a Dollarama shop and reflects our value proposition through both the offering and shopping experience, we will convert that store to the Dollarama banner.

Over the last few months, we have been confirming up our plans in fiscal 2027 priorities for our multi-year transformation of our retail platform in Australia.

Speaker #2: Having done four last year. We also aim to open 15 to 25 net new stores all with the Dollarama layout and fixtures, having opened seven in fiscal 2026.

We have several initiatives underway across three main pillars: merchandising.

Store experience and network growth and operational excellence.

Speaker #2: On operational excellence, we are strengthening the IT infrastructure and optimizing various processes. Notably, we are working on migrating Australia's ERP system to ours, to get all our business processes integrated to the same platform.

Deploying aspects of our model is impacting just about every facet of the business.

In the near term and through fiscal 2027, this work will be both gradual and disruptive, but it is a prerequisite to setting up our Australian operations for future success.

Speaker #2: On the logistics front, we are finalizing our plan to optimize operations and support long-term growth. We are also adding team members as we build the bench strength of the local team.

changing the merchandising strategy is the most important color of the transformation and the most complex to implement

We expect our first Dollarama import skus to start hitting shells during the second quarter of fiscal 2027.

Speaker #2: Once a store feels like a Dollarama shop and reflects our value proposition through both the offering and shopping experience, we will convert that store to the Dollarama banner.

With imports primarily comprised of general merchandise and seasonal items.

The target is to have about a half of the Dollarama import, excuse sourced by the end of fiscal 2027.

Neil Rossy: By fiscal year-end, we will be in a better position to evaluate our progress on this front and initial customer reception. The objective is to build our brand equity in the market by introducing our strong and differentiated value and convenience position, as we have done over time in all of our other markets. As you can see, the year ahead is shaping up to be both busy and exciting for Dollarama. Today, we have strong teams across three continents working to execute on their respective growth plans, with each market bringing its own unique set of characteristics, priorities, and opportunities. While the paths may differ from one market to the next, the long-term vision guiding our efforts remains the same: to deliver unbeatable value to consumers in every market where we operate and to create long-term value for our shareholders.

Speaker #2: By fiscal year-end, we will be in a better position to evaluate our progress on this front and initial customer reception. The objective is to build our brand equity in the market by introducing our strong and differentiated value and convenience positioning.

On the mastic side which is primarily consumables. We are also looking at products, SKU by SKU, to deliver increased value to our customers.

Speaker #2: As we have done, over time, in all of our other markets. As you can see, the year ahead is shaping up to be both busy and exciting for Dollarama.

Speaker #2: Today, we have strong teams across three continents working to execute on the respective growth plans, with each market bringing its own unique set of characteristics, priorities, and opportunities.

Under store experience in network growth, our goal is to renovate the layout and change fixtures in 60 to 80 stores this year, having done 4 last year. We also aim to open 15 to 25 net new stores, all with the Dollarama layout in pictures, having opened 7 in fiscal 2026.

On operational excellence. We are strengthening the it infrastructure and optimizing various processes.

Speaker #2: While the paths may differ from one market to the next, the long-term vision guiding our efforts remains the same. To deliver unbeatable value to consumers, in every market where we operate, and to create long-term value for our shareholders.

Notably, we are working on migrating Australia, the RP system to ours, to get all our business processes integrated to the same platform.

On the logistics front, we are finalizing our plan to optimize operations.

Neil Rossy: As we enter fiscal 2027, the macroeconomic and geopolitical backdrop is evolving rapidly and remains uncertain. Considering the current economic environment in Canada, we expect that consumers will continue to be cautious and deliberate in their spending. In this context, the importance of value is only increasing, and we believe that the value, convenience, and affordability we offer will continue resonating with consumers. Looking at the broader geopolitical environment, the conflict in the Middle East is beginning to have ripple effects on transportation and production costs. Our business model is resilient and provides us with a number of levers to help mitigate these impacts in the near term. The key variable will be the duration of the conflict, which will determine how persistent these cost pressures will be. As always, we remain highly disciplined as price followers.

And support long-term growth.

Speaker #2: As we enter fiscal 2027, the macroeconomic and geopolitical backdrop is evolving rapidly and remains uncertain. Considering the current economic environment in Canada, we expect that consumers will continue to be cautious and deliberate in their spending.

We're also adding team members as we build the bench strength of the local team.

Once a store feels like a Dollarama shop and reflects our value proposition through both the offering and shopping experience, we will convert that store to the Dollarama banner.

Speaker #2: In this context, the importance of value is only increasing. And we believe that the value convenience and affordability we offer will continue resonating with consumers.

Like fiscal year end, we will be in a better position to evaluate our program on this front and initial customer reception.

Speaker #2: Looking at the broader geopolitical environment, the conflict in the Middle East is beginning to have ripple effects on transportation and production costs. Our business model is resilient and provides us with a number of levers to help mitigate these impacts in the near term.

The objective is to build our brand equity in the market by introducing our strong and differentiated value and convenience positions.

as we have done over time, in all of our other markets,

As you can see, the year ahead is shaping up to be both busy and exciting for Dollarama.

Speaker #2: The key variable will be the duration of the conflict, which will determine how persistent these cost pressures will be. As always, we remain highly disciplined as price followers.

Today, we have strong teams across 3, continents, working to execute on the respective growth plans with each market, bringing its own unique set of characteristics, priorities and opportunities.

Neil Rossy: We will only pass on price increases where absolutely necessary and while staying true to our year-round value proposition. Across the business, our focus is on the disciplined execution of our plans, maintaining our strong value proposition, and leveraging the strengths of our business model to deliver for our customers and our shareholders. With that, I'll pass it over to Patrick.

Speaker #2: We will only pass on price increases where absolutely necessary and while staying true to our year-round value proposition. Across the business, our focus is on the disciplined execution of our plans.

While the paths may differ from one market to the next, the long-term vision guiding our efforts remains the same.

to deliver unbeatable value to consumers in every Market where we operate and to create long-term value for

Shareholders.

Speaker #2: Maintaining our strong value proposition and leveraging the strengths of our business model to deliver for our customers and our shareholders. With that, I'll pass it over to Patrick.

As we enter, fiscal 2027 the macroeconomic. And geopolitical backdrop is evolving rapidly and remains uncertain.

Patrick Bui: Thank you, Neil, and good morning, everyone. Let's start with a brief overview of our consolidated results before turning to segment performance. Q4 sales, which included one less week compared to last year, increased by 11.7% to CAD 2.1 billion. For fiscal 2026, sales increased by 13.1% to CAD 7.3 billion, positively impacted by contributions from Australia, as well as greater number of stores and SSS growth in Canada. Diluted EPS increased by 2.1% in Q4 to CAD 1.43. This included a positive CAD 0.03 impact from Australia. For the full fiscal year, EPS rose by 13.7% year on year to CAD 4.73. Our Canadian segment met or exceeded all financial guidance targets.

Speaker #1: Thank you, Neil, and good morning, everyone. Let's start with a brief overview of our consolidated results before turning to segment performance. Q4 sales which included one less week compared to last year increased by 11.7% to 2.1 billion dollars.

Considering the current economic environment in Canada, we expect that consumers will continue to be cautious and deliberate in their spending.

In this context, the importance of value is only increasing.

And we believe that the value, convenience, and affordability we offer will continue resonating with consumers.

Speaker #1: For fiscal 2026, sales increased by 13.1% to 7.3 billion dollars, positively impacted by contributions from Australia as well as greater number of stores and SSS growth in Canada.

Looking at the broader geopolitical environment, the conflict in the Middle East is beginning to have ripple effects on transportation and production costs.

Our business model is resilient and provides us with a number of levers to help mitigate these impacts in the near term.

Speaker #1: Diluted EPS increased by 2.1% in Q4 to $1.43. This included a positive 3 cent impact from Australia. For the full fiscal year, EPS rose by 13.7% year on year, to $4.73.

The key variable will be the duration of the complex, which will determine how persistent these cost pressures will be.

Value proposition.

Speaker #1: Our Canadian segment met or exceeded all financial guidance targets. SSS came in at 1.5% for Q4, over and above SSS of 4.9% in Q4 last year.

Patrick Bui: SSS came in at 1.5% for Q4, over and above SSS of 4.9% in Q4 last year. The increase was primarily driven by demand for seasonal products, offset by two important factors. The first is a calendar shift caused by a 52-week fiscal year following a 53-week fiscal year. In the quarter, this resulted in one less historically strong pre-holiday sales week and an additional historically low sales week at the end of January. It also included four less pre-Halloween shopping days compared to Q4 last year, which we recorded in Q3. Excluding the calendar shift, SSS would have been 3.5%. The second factor was the weather. As mentioned by Neil, a high volume of weather events, including cold temperatures and precipitation, impacted store traffic and resulted in lost sales.

Across the business, our focus is on the disciplined execution of our plans, maintaining our strong value proposition, and leveraging the strengths of our business model to deliver for our customers and our shareholders.

Speaker #1: The increase was primarily driven by demand for seasonal products, offset by two important factors. The first is the calendar shift caused by a 52-week fiscal year following a 53-week fiscal year.

With that, I'll pass it over to Patrick.

Thank you, Neil. And good morning, everyone. Let's start with a brief overview of our consolidated results before turning to segment performance.

Speaker #1: In the quarter, this resulted in one less historically strong pre-holiday sales week, and an additional historically low sales week at the end of January.

Q4 sales, which included one less week compared to last year, increased by 11.7% to $2.1 billion.

Speaker #1: It also included four less pre-Halloween shopping days compared to Q4 last year, which we recorded in Q3. Excluding the calendar shift, SSS would have been 3.5%.

For fiscal 2026 sales, increase by 13.1% to 7.3 billion dollars positively impacted by contributions from Australia, as well as greater number of stores and SSS. Growth in Canada.

Diluted EPS increased by 2.1% in Q4 to $1.43.

Speaker #1: The second factor was the weather. As mentioned by Neil, a high volume of weather events, including cold temperatures and precipitation, impacted store traffic and resulted in lost sales.

This included a positive 3-cent impact from Australia.

For the full fiscal year, EPS rose by 13.7% year-on-year.

For dollars and 73 cents.

Patrick Bui: This is reflected in the 1.6% decrease in the number of transactions. Despite this, basket growth was healthy, growing 3.1%, and we met our annual SSS guidance for the year, coming in at 4.2%. While the weather resulted in softer than anticipated SSS, as weather conditions improved, so did traffic patterns. Store traffic continued to recover nicely as we entered fiscal 2027. Looking ahead to fiscal 2027, we anticipate generating SSS growth in Canada of between 3% and 4%. Consistent with our outlook last year, we continue to expect sustained demand for the compelling value we offer, which remains particularly relevant in the current environment. At the same time, we also remain mindful of the macro environment and the uncertainty it creates.

Speaker #1: This is reflected in the 1.6% decrease in the number of transactions. Despite this, basket growth was healthy, growing 3.1%, and we met our annual SSS guidance for the year coming in at 4.2%.

Our Canadian segment met or exceeded all financial guidance targets.

SSS came in at 1.5% for Q4, over and above SSS of 4.9% in Q4 last year.

Speaker #1: While the weather resulted in softer than anticipated SSS, as weather conditions improved, so did traffic patterns. Store traffic continued to recover nicely as we entered fiscal 2027.

The increase was primarily driven by demand for seasonal products offset by 2 important factors.

The first is a calendar shift caused by a 52-week fiscal year following a 53-week fiscal year.

Speaker #1: Looking ahead to fiscal 2027, we anticipate generating SSS growth in Canada of between 3 and 4 percent. Consistent with our outlook last year, we continue to expect sustained demand for the compelling value we offer, which remains particularly relevant in the current environment.

In the quarter, this resulted in one less historically strong pre-holiday sales week,

And an additional historically, low sales week at the end of January.

It also included 4 or less preh Halloween shopping days compared to Q4 last year, which we recorded in Q3.

Speaker #1: At the same time, we also remain mindful of the macroenvironment and the uncertainty it creates. Gross margin for the Canadian segment came in at 46.6% of sales in Q4 compared to 46.8% last year.

Excluding the calendar shift, SSS would have been 3.5%.

Patrick Bui: Gross margin for the Canadian segment came in at 46.6% of sales in Q4, compared to 46.8% last year. The variance is primarily due to the 53rd week in fiscal 2025, with the 14th week in fiscal 2025 providing additional scaling benefits. Full year gross margin was 45.6% of sales, slightly exceeding the top end of our guidance. For fiscal 2027, our guidance range for gross margin in Canada is in line with last year at between 45% to 45.5% of sales, based on our ability to actively manage product margins. Looking at early fiscal 2027, and given the current macro context, we are closely monitoring pressures in the global supply chain, which may negatively impact gross margin during the year.

The second factor was the weather, as mentioned by Neil. A high volume of weather events, including cold temperatures and precipitation, impacted store traffic and resulted in lost sales.

Speaker #1: The variance is primarily due to the 53rd week in fiscal 2025, with the 14th week in fiscal 2025 providing additional scaling benefits. Full-year gross margin was 45.6% of sales, slightly exceeding the top end of our guidance.

This is reflected in the 1.6% decrease in the number of transactions.

Despite this.

Basket. Growth was healthy growing 3.1% and we met our annual SSS guidance for the year, coming in at 4.2%.

Speaker #1: For fiscal 2027, our guidance range for gross margin in Canada is in line with last year, at between 45 to 45.5% of sales based on our ability to actively manage product margins.

While the weather resulted in softer than anticipated SSS. As weather conditions improved. So the traffic patterns,

Store, traffic continued to recover nicely. As we entered fiscal 2027,

Speaker #1: Looking at early fiscal 2027 and given the current macro context, we are closely monitoring pressures in the global supply chain which may negatively impact gross margin during the year.

Looking ahead to fiscal 2027, we anticipate generating SSS growth in Canada of between 3% and 4%.

Consistent with our Outlook. Last year, we continue to expect sustained demand for the compelling value. We offer, which remains particularly relevant in the current environment.

Patrick Bui: SG&A for the Canadian segment in Q4 was 14.5% of sales, compared to 14.7% last year. The improvement reflects the positive impact of scaling. Full year SG&A came in within guidance at 14.4%. For fiscal 2027, we expect scaling to help offset the impact of higher store labor and operating costs. As a result, our annual guidance range for SG&A in Canada is slightly better than in the prior year at between 14.1% and 14.6% of sales. Finally, CapEx for fiscal 2027 in Canada is between CAD 420 and 470 million. The year-over-year increase primarily reflects capital spend for our logistics hub project, a portion of which shifted over from last year.

Speaker #1: SGNA for the Canadian segment in Q4 was 14.5% of sales, compared to 14.7% last year. The improvement reflects the positive impact of scaling. Full-year SGNA came in within guidance at 14.4%.

at the same time we also remain mindful of the macro environment and the uncertainty it creates

Growth margin for the Canadian segment came in at 46.6% of sales in Q4, compared to 46.8% last year.

Speaker #1: For fiscal 2027, we expect scaling to help offset the impact of higher store labor and operating costs. As a result, our annual guidance range for SGNA in Canada is slightly better than in the prior year, at between 14.1 and 14.6% of sales.

The variance is primarily due to the 503 third week, in fiscal 2025 with the 14th week in fiscal, 2025, providing additional scaling benefits.

Full year, gross margin was 45.6% of sales slightly exceeding, the top end of our guidance.

Speaker #1: Finally, CAPEX for fiscal 2027 in Canada is between 420 to 470 million dollars. The year-over-year increase primarily reflects capital spend for our logistics hub project.

Speaker #1: A portion of which shifted over from last year. Turning to Dollar City, our share of their net earnings in Q4 increased by 22% to 70.5 million dollars.

For fiscal 2027. Our guidance range for gross margin in Canada is in line with last year and between 45 to 45.5% of sales based on our ability to actively manage product margins.

Patrick Bui: Turning to Dollarcity, our share of their net earnings in Q4 increased by 22% to CAD 70.5 million. For the year, our share reached CAD 191.5 million, an over 47% increase. This was driven by SSS and store network growth, offset by the ramp-up of operations in Mexico. On a 100% basis, the Mexico business realized a net loss of $5.4 million and $11.7 million for Q4 and the full year respectively. As the business is still in ramp-up mode, we expect a loss in fiscal 2027, consistent with the range provided last year of between $10 and 20 million for 100% of the business.

Speaker #1: For the year, our share reached 191.5 million dollars, an over 47% increase. This was driven by SSS and store network growth, offset by the ramp-up of operations in Mexico.

Looking at early, fiscal 2027 and given the current macro context, we are closely monitoring pressures in the global supply chain, which may negatively impact gross margin during the year.

As DNA for the Canadian segment in Q4 was 14.5% of sales, compared to 14.7% last year, the improvement reflects the positive impact of scaling.

Speaker #1: On a 100% basis, the Mexico business realized a net loss of US 5.4 million dollars and US 11.7 million dollars for Q4 and the full year, respectively.

Whole year, at the beginning, came in within guidance at 14.4%,

Speaker #1: As the business is still in ramp-up mode, we expect a loss in fiscal 2027, consistent with the range provided last year, of between US 10 to 20 million dollars for 100% of the business.

Higher store, labor and operating costs.

As a result, our annual guidance range for SG&A in Canada is slightly better than in the prior year, at between 14.1% and 14.6% of sales.

Patrick Bui: On 5 February, Dollarcity declared a dividend of $125 million, with our share coming in at $75.1 million. The doubling of the dividend compared to the previous one declared speaks to Dollarcity's strong free cash flow generation, with its profitable growth trajectory continuing to mirror Dollarama's. In early fiscal 2027, we made a capital contribution of $38 million towards Mexico expansion plans. This follows two $18 million contributions made last year. As with previous capital contributions, we allocated a portion of our share of the latest Dollarcity dividend. Looking now at Australia. For the approximately six-month period since our acquisition in late July, the business had a neutral impact on consolidated net earnings for fiscal 2026.

Speaker #1: On February 5th, Dollar City declared a dividend of US 125 million dollars, with our share coming in at US 75.1 million dollars. The doubling of the dividend compared to the previous one declared speaks to Dollar City's strong free cash flow generation, with its profitable growth trajectory continuing to mirror Dollarama.

Finally, Capex for fiscal 2027 in Canada is between $420 million to $470 million.

The year-over-year increase primarily reflects capital spend for our logistics project, a proportion of which shifted over from last year.

Speaker #1: In early fiscal 2027, we made a capital contribution of US 38 million dollars towards Mexico expansion plans. This follows two US 18 million dollar contributions made last year.

Turning to Dollar City, our share of their net earnings in Q4 increased by 22% to 70.5 million. For the year, our share reached 191.5 million and over. 47% increase.

This was driven by SSS and store network growth.

Offset by the ramp-up of operations in Mexico.

Speaker #1: As with previous capital contributions, we allocated a portion of our share of the latest Dollar City dividend. Looking now at Australia, for the approximately six-month period since our acquisition in late July, the business had a neutral impact on consolidated net earnings for fiscal 2026.

On a 100% basis. The Mexico business realized a net loss of us 5.4 million and US 11.7 million for Q4, and the full year respectively,

Patrick Bui: For perspective, looking at the full year and on a pro forma basis, Australia generated approximately AUD 916 million in sales and a net loss of AUD 10.6 million, all in Australian currency. Turning to fiscal 2027, it is expected to be an investment year as we ramp up the integration process. Neil spoke to our priorities across our strategic pillars. As a result, the Australian segment is expected to generate a net loss in fiscal 2027. These impacts are presented in our financial documents and in our investor presentation, which is available on the event page. I'd like to call out the main ones. First and most significant is the anticipated negative impact from the merchandise changeover and transition to lower-priced items.

Speaker #1: For full year and on a pro forma basis, Australia generated approximately 916 million dollars in sales and a net loss of 10.6 million dollars, all in Australian currency.

As a business is still in ramp up mode. We expect a loss in fiscal 2027 consistent with the range provided last year of between us 10 to 20 million for 100% of the business.

Speaker #1: Turning to fiscal 2027, it is expected to be an investment year as we ramp up the integration process. Neil spoke to our priorities across our strategic pillars.

On February 5th, Dollar City declared a dividend of us 125 million with our share coming in at us 75.1 million.

The doubling of the dividend compared to the previous one declared speaks to Dollarama's strong free cash flow generation.

Speaker #1: As a result, the Australian segment is expected to generate a net loss in fiscal 2027. These impacts are presented in our financial documents and in our investor presentation, which is available on the event page.

With its profitable growth trajectory continuing to mirror dollars.

In early fiscal 2027, we made a capital contribution of US$38 million towards the Mexico expansion plan.

Speaker #1: But I'd like to call out the main ones. First, and most significant, is the anticipated negative impact from the merchandise changeover and transition to lower price items.

This follows two US $18 million contributions made last year.

As with previous capital contributions, we allocated a portion of our share of the latest Dollar City dividends.

Patrick Bui: As you can appreciate, it is also the hardest to quantify at this stage of the transformation as it will depend on several factors. These include the timing of the product transition, the speed at which sales of incumbent higher-priced SKUs will be compensated by sales of the lower-priced Dollarama SKUs, and impact on store traffic. That said, we anticipate a negative impact on sales for the year. The second is related to capital expenditures for store renovations and net new store openings. These are estimated at between AUD 400,000 and 600,000 per renovated store and between AUD 800,000 and 1 million per net new store. There is also a direct impact on sales during renovation-related store closures. Third is P&L related.

Speaker #1: As you can appreciate, it is also the hardest to quantify at this stage of the transformation, as it will depend on several factors. These include the timing of the product transition, the speed at which sales of incumbent higher price SKUs will be compensated by sales of the lower priced Dollarama SKUs, and impact on store traffic.

Looking now, at Australia.

For the approximately 6 month period, since our acquisition in Late July, the business had a neutral impact on Consolidated net, earnings for fiscal 2026.

For perspective.

Speaker #1: That said, we anticipate a negative impact on sales for the year. The second is related to capital expenditures for store renovations and net new store openings.

Looking at the full year and on a pro-forma basis. Australia, generated approximately 916 million dollars in sales and a net loss of 10.6 million all in Australian currency.

Turning to fiscal 2027, it is expected to be an investment year as we ramp up the integration process.

Speaker #1: These are estimated at between 400 and 600 thousand Australian dollars, per renovated store, and between 800 thousand and a million Australian dollars, per net new store.

Neil spoke to our priorities across our strategic pillars.

As a result, the Australian segment is expected to generate a net loss in fiscal 2027.

Speaker #1: There is also a direct impact on sales during renovation-related store closures. Third is P&L related. We expect to incur about 35 to 45 million dollars in incremental costs related to integration, IT transformation, additional headcount, and labor costs.

These impacts are presented in our financial documents and in our investor presentation, which is available on the event page.

Patrick Bui: We expect to incur about CAD 35 to 45 million in incremental costs related to integration, IT transformation, additional headcount, and labor costs. These transformational changes are essential to set the business on a path for profitable growth. There's a lot of work to be done, but we are excited and motivated by the upside potential once we work through some of these major changes to the business. Our vision is to build a leading value retailer with a strong and favorable margin profile compared to global peers. The work we are undertaking in fiscal 2027 will represent a critical first step in our multiyear path to deliver attractive return on investments. Back to Dollarama.

But I'd like to call out the main ones.

First and most significant is the anticipated negative impact from the merchandise changeover and transition to lower-price items.

Speaker #1: These transformational changes are essential to set the business on a path for profitable growth. There is a lot of work to be done, but we are excited and motivated by the upside potential once we work through some of these major changes to the business.

As you can appreciate, it is also the hardest to quantify at this stage of the transformation, as it will depend on several factors. These include the timing for the product transition.

Speaker #1: Our vision is to build a leading value retailer with a strong and favorable margin profile compared to global peers. The work we are undertaking in fiscal 2027 will represent a critical first step in our multi-year path to deliver attractive return on investment.

The speed at which sales of incumbent, higher-price SKUs will be compensated by sales of the lower-price Dollarama SKUs.

And impact on store traffic.

That said we anticipate a negative impact on sales for the year.

The second is related to capital expenditures for store renovations, and net new store openings.

Speaker #1: Back to Dollarama, in terms of returning capital to shareholders, we repurchased over 4.4 million shares for cancellation during fiscal 2026, for a total cash consideration of 834.2 million dollars.

Patrick Bui: In terms of returning capital to shareholders, we repurchased over 4.4 million shares for cancellation during fiscal 2026, for a total cash consideration of CAD 834.2 million. We also announced today that the board has approved a 13.4% increase to the quarterly cash dividend, bringing it to CAD 0.12 per share. Looking ahead, our priorities are clear. We will continue to allocate capital in a balanced manner as we pursue our profitable growth in Canada and LatAm, and as we embark on the transformation of our Australian platform. Consistent with past practice, we also intend to allocate the majority of excess cash towards share buybacks and a dividend subject to quarterly approval. While the broader economic environment remains uncertain, the underlying fundamentals of our business are strong and our value proposition as relevant as ever.

These are estimated at between 400 and 600,000 Australian dollars.

Per renovated store and between 800,000 and a million Australian dollars, per net use store.

There is also a direct impact on sales during renovation-related store closures.

Speaker #1: We also announced today that the board has approved a 13.4% increase to the quarterly cash dividend, bringing it to 12 cents per share. Looking ahead, our priorities are clear.

Third is pnl related. We expect to include in incur about 35 to 45 million in incremental, costs related to integration it transformation additional head, count and labor costs.

Speaker #1: We will continue to allocate capital in a balanced manner, as we pursue our profitable growth in Canada and LATAM, and as we embark on the transformation of our Australian platform.

These transformational changes are essential to set the business on a path for

Speaker #1: Consistent with past practice, we also intend to allocate the majority of excess cash towards share buybacks and a dividend subject to quarterly approval. While the broader economic environment remains uncertain, the underlying fundamentals of our business are strong, and our value proposition as relevant as ever.

Through some of these major changes to the business.

Our vision.

Patrick Bui: As we enter the next fiscal year, we are focused on disciplined execution to advance our growth initiatives across multiple geographies and support long-term value creation for our shareholders. With that, I'll now turn the call back to the operator for the Q&A.

Speaker #1: As we enter the next fiscal year, we are focused on disciplined execution to advance our growth initiatives across multiple geographies and support long-term value creation for our shareholders.

Speaker #1: With that, I'll now turn the call back to the operator for the Q&A.

Operator 1: Thank you. To ensure we hear from as many participants as possible, we ask that you please limit yourself to one question. To ask a question, please press star one one on your telephone keypad and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question is from Irene Nattel with RBC Capital Markets. Your line is now open.

Operator: Thank you. To ensure we hear from as many participants as possible, we ask that you please limit yourself to one question. To ask a question, please press star one one on your telephone keypad and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question is from Irene Nattel with RBC Capital Markets. Your line is now open.

Speaker #2: Thank you. To ensure we hear from as many participants as possible, we ask that you please limit yourself to one question. To ask a question, please press star 11 on your telephone keypad and wait for your name to be announced.

Speaker #2: To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question is from Irene Natal.

Speaker #2: With RBC Capital Markets, your line is now open.

Irene Nattel: Thanks, and good morning, everyone. I was wondering if we could spend a minute just unpacking that same-store sales number. You called out weather. You called out strong seasonal. Can you give us an idea of, you know, what the cadence was through the quarter, what the exit rate was, where we are quarter to date, and what the demand is like across the store, please, and thank you.

Speaker #3: Thanks, and good morning, everyone. I was wondering if we could spend a minute just unpacking that same store sales number. You called out weather.

Speaker #3: You called out strong seasonal. Can you give us an idea of what the cadence was through the quarter, what the exit rate was, where we are quarter to date, and what the demand is like across the store?

To be able to be a leading value retailer with a strong and favorable margin profile.

Speaker #3: Please, and thank you.

Patrick Bui: Sure. Thanks for your question, Irene. Look, starting at high levels, you know, we believe the overall consumer environment remains exactly the same, right? Canadians are faced with pressures on their household budgets, and they turn to Dollarama for year-round value and everyday convenience. If you look at it sequentially, you know, we had strong momentum as we exited Q3. We had strong momentum as we started Q4 in November. Traffic then dropped off when we encountered unfavorable weather conditions in December and January. Once those conditions were behind us, traffic resumed nicely in February and as we kicked off fiscal 2027.

Speaker #4: Sure. Thanks for your question, Irene. Look, starting at high level, we believe the overall consumer environment remains exactly the same, right? Canadians are faced with pressures on their household budgets, and they turn to Dollarama for year-round value and everyday convenience.

Speaker #4: So if you look at it sequentially, we had strong momentum as we exited the third quarter. We had strong momentum as we started the fourth quarter.

Speaker #4: In November, and then traffic then dropped off when we encountered unfavorable weather conditions in December and in January. But once those conditions were behind us, traffic resumed nicely in February and as we kicked off fiscal 2027.

Patrick Bui: It seems to suggest that the consumer environment that we've seen in the past few quarters is, you know, exactly the same that we're seeing as we start the new fiscal year.

Speaker #4: So it seems to suggest that the consumer environment that we've seen in the past few quarters, the past many few quarters, is exactly the same that we're seeing as we start the new fiscal year.

Patrick Bui: It seems to suggest that the consumer environment that we've seen in the past few quarters is, you know, exactly the same that we're seeing as we start the new fiscal year.

Operator 1: Thank you. Our next question comes from the line of Brian Morrison with TD Cowen. Your line is now open.

Operator: Thank you. Our next question comes from the line of Brian Morrison with TD Cowen. Your line is now open.

Speaker #2: Thank you. Our next question comes from the line of Brian Morrison with TD Cowan. Your line is now open.

Brian Morrison: Thanks. The second focus, I think, this morning is Dollarcity leverage, with your sales up 28% and equity income up 22%. When you look at the disclosure, the Mexico loss, I think you even called it out in the call. Would the LatAm growth have been 30% to 35%, illustrating leverage, Patrick, is that correct? I know there was a pricing structure in Colombia was a positive driver last year that will be lapped. Looking forward, how should we think about leverage drivers at LatAm and what your break-even store target is for Mexico?

Speaker #5: Thanks. The second focus I think this morning is Dollar City leverage, with your sales up 28% and equity income up 22%. But when you look at the disclosure, the Mexico loss, I think you even called it out in the call, would the LATAM growth have been 30 to 35 percent, illustrating leverage, Patrick?

Speaker #5: Is that correct? And I know there was a pricing structure in Colombia that was a positive driver last year that will be lapped, but looking forward, how should we think about leverage drivers at LATAM, and what you're break-even store target is for Mexico?

Patrick Bui: Sure. It is true when you look at those numbers of top line of 28% and bottom line of 22%, that does include Mexico. If you were to exclude Mexico, I think you're correct in saying that bottom line growth is over 30%. You need also to consider that when you look at the top line growth, it includes sales from Mexico this year, and we didn't have those sales obviously last year. You would conclude that the Dollarcity business, excluding Mexico, is still benefiting from leverage and scale as we move in time. Do conclude that the business is still growing at a good pace, and there is still scaling benefits to come in the future.

Speaker #4: Sure. So it is true when you look at those numbers of top line of 28% and bottom line of 22, that does include Mexico.

Speaker #4: And so if you were to exclude Mexico, I think you're correct in saying that bottom line growth is over 30%. You need also to consider that when you look at the top line growth, it includes sales from Mexico this year, and we didn't have those sales, obviously, last year.

Speaker #4: So you would conclude that the Dollar City business, excluding Mexico, is still benefiting from leverage and scale as we move in time. So do conclude that the business is still growing at a good pace, and there is still a scaling benefit to come in the future.

Patrick Bui: I believe, before I forget, there was a second part of your question about Mexico. You know, we've provided in our financial statements the loss for 100% of Mexico this year. We've also commented that Mexico, while we're, you know, very happy with the progress, is still in ramp-up mode. We do expect a loss similar, a range similar to last year, so about $10 to 20 million. After that, you know, hopefully, you know, EBITDA losses will shrink, but a little too early, Brian, to have a clear view on when that business will break even.

Speaker #4: I believe before I forget, there was a second part of your question about Mexico. We've provided in our financial statements the loss for 100% of Mexico this year.

Speaker #4: We've also commented that Mexico while we're very happy with the progress is still in ramp-up mode. So we do expect a loss similar a range similar to last year, so about US 10 to 20 million dollars.

Speaker #4: After that, hopefully, EBITDA losses will shrink, but a little too early, Brian, to have a clear view on when that business will break even.

Speaker #2: Thank you. Our next question comes from the line of Chris Lee with Day Garden. Your line is now open.

Operator 2: Thank you. Our next question comes from the line of Chris Li with Desjardins. Your line is now open.

Operator: Thank you. Our next question comes from the line of Chris Li with Desjardins. Your line is now open.

Chris Li: All right, good morning. Maybe just a two-part question on Australia. First is, I know it's still super early, but for the stores that have been renovated so far, what's been the sales lift, and is it trending in line or better than your expectation?

Speaker #5: All right. Good morning. Maybe just a two-part question on Australia. First is, I know it's still super early, but for the stores that have been renovated so far, what's been the sales lift, and is it trending in line or better than your expectation?

Speaker #4: Yeah. And just to take a step back, so what we're doing when we're converting stores, right? So we talked about renovating the layout of the stores, having the appropriate racking, lighting, flow of shopping as well.

Patrick Bui: Yeah, just to take a step back. What we're doing when we're converting stores, right? We talked about renovating the layout of the stores, having the appropriate racking, lighting, flow of shopping as well. What it also provides is a higher density of product in the stores, which is an important condition when you're selling low price items and high volume sales. One would expect a positive uplift. Even if all the products are currently all, you know, TRS products, if I could say, we did see a pickup in unit sales. That being said, the real power of the conversion is really when you combine the conversions with a good density of Dollarama SKUs, and we're not there yet.

Speaker #4: What it also provides is a higher density of products in the stores, which is an important condition when you're selling low-priced items and high-volume sales.

Speaker #4: And so one would expect a positive uplift and even if all the products are currently all TRS products, if I could say, we did see a pickup in unit sales.

Speaker #4: That being said, the real power of the conversion is really when you combine the conversions with a good density of Dollarama SKUs. And we're not there yet as Neil commented.

Patrick Bui: As Neil commented, we're gonna start introducing some SKUs in the first part of the second half of the year.

Speaker #4: We're going to start introducing some SKUs in the first part of the first part of the second half of the year.

Speaker #2: Thank you. Our next question comes from the line of Mark Petrie with CIBC, your line is now open.

Operator 2: Thank you. Our next question comes from the line of Mark Petrie with CIBC. Your line is now open.

Operator: Thank you. Our next question comes from the line of Mark Petrie with CIBC. Your line is now open.

Mark Petrie: Yeah, good morning. Thank you. Neil, you touched on this in your prepared remarks, but obviously the macro picture has gotten significantly murkier in the last month or so. Can you just add some color to what you said already with regards to the impacts that you've seen on your supply chain costing and consumer demand? You know, obviously, as you said, the longer this goes on, the higher the risk is to affecting costs more materially. You know, what's the sort of over-under on when you would expect this to affect your outlook and guidance?

Speaker #6: Yeah. Good morning. Thank you. Neil, you touched on this in your prepared remarks, but obviously, the macro picture has gotten significantly murkier in the last month or so.

Speaker #6: Can you just add some color to what you said already with regards to the impacts that you've seen on your supply chain, costing, and consumer demand?

Speaker #6: And obviously, as you said, the longer this goes on, the higher the risk is to affecting costs more materially. But what's the sort of over/under on when you would expect this to affect your outlook and guidance?

Neil Rossy: It's still early days. Unfortunately, higher energy costs will permeate, you know, throughout the supply chain for all retailers and for consumers over the next, you know, few months to a year. The duration of the conflict will decide, you know, the scale of the effect. Certainly, inbound costs, outbound costs, production costs, raw material costs are all being affected by the, you know, the increased cost of oil. That will eventually make its way down the supply chain. Our job as, you know, low-cost retailers and value retailers is to ensure that we're price following and to ensure that we are offering the best value, relative value in the market that we can. I don't believe that any retailer will escape the reality of global economics.

Speaker #6: So it's still early days. And I'm fortunately higher energy costs will permeate throughout the supply chain for all retailers and for consumers. Over the next few months to a year, the duration of the conflict will decide the scale of the effect.

Speaker #6: But certainly, inbound costs, outbound costs, production costs, raw material costs are all being affected by the increased cost of oil. And that will eventually make its way down the supply chain.

Speaker #6: Our job as low-cost retailers and value retailers is to ensure that we're price following and to ensure that we are offering the best value relative value in the market that we can.

Speaker #6: But I don't believe that any retailer will be will escape the reality of global economics and we just we all hope for the consumer and for the world, I would go so far as saying, that the conflict ends as quickly as possible.

Neil Rossy: We just, you know, we all hope for the consumer and for the world, I would go so far as saying that the conflict, you know, ends as quickly as possible.

Speaker #2: Thank you. Our next question comes from the line of John Zamparo with Scotiabank, your line is now open.

Operator 2: Thank you. Our next question comes from the line of John Zamparo with Scotiabank. Your line is now open.

Operator: Thank you. Our next question comes from the line of John Zamparo with Scotiabank. Your line is now open.

Speaker #7: Thank you. Good morning. Perhaps a follow-up or two on that same topic. I wonder if you can elaborate on the ripple effects you've seen.

John Zamparo: Thank you. Good morning. Perhaps a follow-up or two on that same topic. I wonder if you can elaborate on the ripple effect you've seen. It would be helpful to get a sense of some magnitude on how impactful you expect this to be. In other words, what the gross margin guide would have been prior to the start of the war. Just to clarify, have you seen any deceleration in same store sales subsequent to the start of the war?

Speaker #7: It would be helpful to get a sense of the magnitude on how impactful you expect this to be. In other words, what the gross margin guide would have been prior to the start of the war and just to clarify, have you seen any deceleration in SAMHSA sales subsequent to the start of the war?

Speaker #4: Yeah. Look, I mean, as Neil alluded to, this is early days, right? So we are seeing some increased costs in transportation, we're seeing some costs increase in even product costs.

Patrick Bui: Yeah, look, I mean, as Neil alluded to, this is early days, right? We are seeing some increased costs in transportation. We're seeing some cost increase in, you know, even product costs. But you know, if we're in under the context of this is short term, all of this is, some of it is included in our guide, right? If you look at our guide, we're saying 45.5, same as last year, recognizing that there might be some incremental costs that we're seeing right now. Very important is, to Neil's point, if this is prolonged and/or deepens, well, there will be, you know, potentially over time, consequences on gross margins that we may or may not be able to pass on.

Speaker #4: But if we're under the context of this is short-term, all of this is some of it is included in our guide, right? So if you look at our guide, we're saying 45, 45 and a half, same as last year, recognizing that there might be some incremental costs that we're seeing right now.

you know, will escape the reality of of global economics and we just, you know, we all hope for the consumer and, and for the world, I would go so far as saying that the conflict, you know, ends as quickly as possible,

Speaker #4: But very important is to Neil's point, if this is prolonged and/or deepens, well, there will be potentially over time consequences on gross margins that we may or may not be able to pass on.

Thank you. Our next question comes from the line of John Zaro with Scotia Bank. Your line is now open.

Speaker #4: But generally speaking, we have a resilient business model, and we're in a good position to offset some of those costs. So I would say we've included some of what we're seeing in the guide, but obviously, if this gets prolonged and gets worse, well, then there might be negative consequences on our gross margins.

Patrick Bui: Generally speaking, we have a resilient business model, and we're in a good position to offset some of those costs. I would say we've included some of what we're seeing in the guide, but obviously if this gets, you know, prolonged and gets worse, well, then, you know, there might be negative consequences on our gross margins and frankly, you know, ripple effects throughout, you know, the whole industry and the whole economy.

Thank you, good morning. Um, perhaps a follow-up or 2 on on that same topic. I wonder if you can. Elaborate on on the ripple effect, you've seen it would be helpful to get a sense of the magnitude on on, uh, how impactful you expect us to be. In other words, what the gross margin guide would have been, uh, prior to the start of the war and just to clarify. Have you seen any deceleration in samster sales subsequent to the start of the war?

Speaker #4: And frankly, ripple effects throughout the whole industry and the whole economy.

Speaker #2: Thank you. Our next question comes from the line of Eddie and Ricard with BMO Capital Markets, your line is now open.

Operator 2: Thank you. Our next question comes from the line of Tamy Chen with BMO Capital Markets. Your line is now open.

Operator: Thank you. Our next question comes from the line of Tamy Chen with BMO Capital Markets. Your line is now open.

Speaker #8: Thank you. And good morning. Patrick to circle back on Mexico. If you look at your experience in other markets for Dollar City, at what level of scale from a store count perspective do you typically reach break-even levels in a given country?

Tamy Chen: Thank you. Good morning. Patrick, to circle back on Mexico, if you look at your experience in other markets for Dollarcity, at what level of scale from a store count perspective do you typically reach break-even levels in a given country? Thank you.

Étienne Ricard: Thank you. Good morning. Patrick, to circle back on Mexico, if you look at your experience in other markets for Dollarcity, at what level of scale from a store count perspective do you typically reach break-even levels in a given country? Thank you.

This was early days, right? So we are seeing some increased costs. Uh, in transportation, uh, we're seeing some costs increase in, you know, even product costs. Um, but, you know, if we're under the context of this is short term, uh, all of this is—some of it is included in our guide, right? So if you look at our guide, we're saying 4.5, 4.55 and a half, same as last year, recognizing that there might be some incremental costs that we're seeing right now. But very important is, uh, to Neil's point.

Speaker #8: Thank you.

Speaker #4: Yeah. Every I would start out by saying we're following a recipe in all countries we open. So this is arguably the fifth time. But there are some nuances, right?

Patrick Bui: I would start off by saying, you know, we're following a recipe, you know, in all countries we open, so this is arguably the fifth time. There are some nuances, right? Like certainly in this case, Mexico is a bigger country, so it might take, you know, bigger investments to start off with. It's hard to compare with, you know, other countries. Just to give you some elements, you know, think of, you know, the pace at which we're ramping up Mexico to be, you know, pretty much in line with the experience that we've had in a country like Colombia or Peru. We'll give you a sense of what we're thinking in terms of ramp up.

Speaker #4: Certainly, in this case, Mexico is a bigger country, so it does might take bigger investments to start off with. And so it's hard to compare with other countries.

If this is prolonged and or deepens, well, there will be, you know, potentially over time consequences on on Gross margins that uh, we may or may not be able to pass on. But generally speaking we have a resilient business model and we're in a good position to offset um some of those costs. So I would say,

Speaker #4: But just to give you some elements, think of the pace at which we're ramping up Mexico to be pretty much in line with the experience that we've had in a country like Colombia or Peru.

We've included some of what we're seeing in the guide. But obviously, if this gets, you know, prolonged and gets worse, well then, you know, uh, there might be negative consequences on our gross margins and, frankly, you know, ripple effects throughout, you know, the whole industry and the whole economy.

Speaker #4: So it gives us we'll give you a sense of what we're thinking in terms of ramp-up. And related to that, and a little bit to an earlier question, we're not break-even.

Thank you.

Patrick Bui: Related to that, and a little bit to an earlier question, you know, we're not breaking even. We weren't breaking even last year. We don't expect to be EBITDA positive next year. Maybe in the following year, we might be starting to curb EBITDA losses, but this is not bottom line, right? You would need incremental time to derive, you know, a break-even on the net income. But like I said, a little too early to say. Have a look at the other countries. We'll give you a sense of direction, but every country is slightly different. That's all we could say on that.

Our next question comes from the line of Eddie and Ricard with BMO Capital Markets. Your line is now open.

Speaker #4: We weren't break-even last year. We don't expect to be EBITDA positive. Next year. So maybe in the following year, we might be starting to curb EBITDA losses.

Speaker #4: But this is not bottom line, right? So you would need incremental time to derive a break-even on the net income. But like I said, a little too early to say.

Thank you and uh, good morning, uh, Patrick to uh Circle back on Mexico. If you look at your experience uh in other markets for uh Dollar City at what level of scale uh from a store count perspective.

Do you typically reach Break Even levels in uh, in a given country? Thank you.

Speaker #4: Have a look at the other countries. We'll give you a sense of direction. But every country is slightly different. That's all we could say on that.

Speaker #2: Thank you. Our next question comes from the line of Ed Kelly with Wells Fargo, your line is now open.

Operator 2: Thank you. Our next question comes from the line of Edward Kelly with Wells Fargo. Your line is now open.

Operator: Thank you. Our next question comes from the line of Edward Kelly with Wells Fargo. Your line is now open.

Speaker #9: Hi. Good morning. Thank you for taking my question. I wanted to dig in on Australia. I've heard you say a couple of things this morning around sounds like a little bit of a comp headwind.

Edward Kelly: Hi. Good morning. Thank you for taking my question. I wanted to dig in on, you know, Australia. I've heard you say a couple things this morning around, sounds like a little bit of a comp headwind. You're gonna be doing remodels. There's some transition costs. I'm not sure about the gross margin opportunity. But, you know, when you put all this together, you know, for a business that, you know, I don't know, maybe with a small loss in fiscal 2026, does the loss in this business grow to a range of sort of, you know, AUD 30 to 40 million in EBIT? I'm just kinda curious if you could help us, you know, frame that because it does look like it maybe could matter from an earnings perspective.

Ed Kelly: Hi. Good morning. Thank you for taking my question. I wanted to dig in on, you know, Australia. I've heard you say a couple things this morning around, sounds like a little bit of a comp headwind. You're gonna be doing remodels. There's some transition costs. I'm not sure about the gross margin opportunity. But, you know, when you put all this together, you know, for a business that, you know, I don't know, maybe with a small loss in fiscal 2026, does the loss in this business grow to a range of sort of, you know, AUD 30 to 40 million in EBIT? I'm just kinda curious if you could help us, you know, frame that because it does look like it maybe could matter from an earnings perspective.

Speaker #9: You're going to be doing remodels. There's some transition costs. I'm not sure about the gross margin opportunity, but when you put all this together, for a business that, I don't know, maybe it was a small loss in fiscal '26, does the loss in this business grow to a range of sort of 30 to 40 million dollars in EBIT?

Yeah, you know, every um, I would start out by saying, you know, we're we're following a recipe, you know, in, in all countries, we open. So this is arguably the fifth time, but there are some nuances, right? Like, certainly in this case Mexico is a bigger country. So it does might take, you know, bigger Investments to start off with. And so, it's hard to compare with, you know, with other countries. But, um, just to give you some elements, um, you know, think of, you know, the pace at which we're ramping up Mexico to be, you know, pretty much in line with the experience that we've had in a country like Colombia Peru. So it gives us, we'll give you a sense of what we're thinking in terms of ramp up.

Speaker #9: I'm just kind of curious if you could help us frame that because it does look like it maybe could matter from an earnings perspective.

Speaker #4: Sure. So let's take it piece by piece. As we think about the potential impact to fiscal year '27, so first point is the business on a standalone basis.

Patrick Bui: Sure. Let's take it piece by piece as we think about the potential impact to fiscal year 2027. First point is the business on a standalone basis. Without you know transformation from Dollarama, you look at last year on a full year basis, was at a loss of -AUD 10.6 million. You need to start from that base, to which, when you look at the three pillars that we've laid out in our investor presentation, there are incremental integration costs. We talk about CAD 35 to 45 million that you would need to factor in. I'm moving from third bucket and coming to the first, but the second bucket is a lot about CapEx.

Speaker #4: So without transformation from Dollarama, you look at last year on a full-year basis, what at a loss of 10 million 10.6 million Australian dollars.

And, uh, related to that. And a little bit to an earlier question. Um, you know, we're not break. Even we were break even last year. We don't expect to be e bit up positive, uh, next year. So, maybe in the following year, we might be starting to curve, but the losses, but this is not bottom line, right? So you would need incremental time to derive, you know, a, a break even on the on the net income. But like I said, a little too early to say, have a look at the other countries. We'll give you a sense of direction, uh, but every country is slightly different. That's all we could say on that.

Speaker #4: So you need to start from that base. To which, when you look at the three pillars that we've laid out in our investor presentation, there are incremental integration costs.

Thank you. Our next question comes from the line of Ed Kelly with Wells Fargo. Your line is now open.

Speaker #4: So we talk about 35 to 45 million that you would need to factor in. Then you move to and I'm moving from third bucket and coming to the first.

Hi, uh, good morning. Thank you for taking my question. I wanted to dig in on, um, you know, Australia. I've heard you say a couple of things this morning around, um, sounds like a little bit of a comp headwind. You're going to be doing remodels, there's some transition costs.

Speaker #4: But the second bucket is a lot about CapEx. So we provide some color in terms of store renovations, and new stores. There is a small P&L impact for the period during which we're going to close the stores for the renovation.

I'm not sure about the gross margin opportunity, but you know, when you put all this together, you know, for a business that, you know, I don't know, maybe it was a small loss and

Patrick Bui: We provide some color in terms of store renovations and new stores. There is a small P&L impact for the period during which we're gonna close the stores for the renovation. You would need to factor that, potentially a little bit of D&A. The first bucket is really the most uncertain. This is about transitioning the products and we talked about all the factors. This one, as you might appreciate, we barely have, you know, a Dollarama product in the country. To start guessing the impact of the transition is a little dangerous at this point. Certainly once we get greater clarity there, you know, we'll be happy to share it with you.

Speaker #4: So you would need to factor that potentially a little bit of DNA. And then the first bucket is really the most uncertain. So this is about transitioning the products and we talked about all the factors.

In in fiscal, 26, does the loss in this business grow to a range of sort of, you know, 30 to 40 million dollars in E bit? Um, I'm just kind of curious if you could help us, you know, frame that because it it does look like it maybe.

Speaker #4: But this one as you might appreciate, we barely have a Dollarama product in the country. And so to start guessing the impact of the transition is a little dangerous at this point.

Speaker #4: But certainly, once we get greater clarity there, we'll be happy to share it with you. But that's how I would think about framing the net income loss for this year.

Uh you look at last year and I pull your bases. What at a loss of of 10 million uh 10.6 million Australian dollars so you need to start from that base.

Patrick Bui: That's how I would think about framing, you know, the net income loss for this year.

Speaker #2: Thank you. Our next question comes from the line of Mark Carden with UBS, your line is now open.

Operator 2: Thank you. Our next question comes from the line of Mark Carden with UBS. Your line is now open.

Operator: Thank you. Our next question comes from the line of Mark Carden with UBS. Your line is now open.

To which, when you look at the 3Rs that we've laid out in our investor presentation, there are incremental integration costs. So, we talked about $35 to $45 million that you would need to factor in.

Speaker #10: Good morning. Thanks for taking the question. So I wanted to touch quickly on the competitive backdrop. Are you guys seeing any shifts in intensity, particularly from some of the mass merchants?

Mark Carden: Good morning. Thanks for taking the question. I wanted to touch quickly on the competitive backdrop. Are you guys seeing any shifts in intensity, particularly from some of the mass merchants? Population growth has also pulled in meaningfully. Any shifts in how you approach unit growth placement going forward and same store sales, just given the changing dynamics there? Thanks.

Speaker #10: And then population growth has also pulled in meaningfully. Any shifts in how you approach unit growth placement going forward? And same-store sales just given the changing dynamics there.

Speaker #10: Thanks.

Speaker #4: No, I think the market in Canada is quite stable. Competition remains stable. There's no real new entrants to talk about. Overall, I would say it's business as usual in Canada.

Patrick Bui: No, I think the market in Canada is quite stable. Competition remains stable. There's no real new entrants to talk about. Overall, I would say it's business as usual in Canada.

Um, then you move to and I'm moving from third bucket and and coming to the first. But the second bucket is a lot about capex. So we provide some color in terms of store Renovations and and new new stores. Uh, there is a small p&l impact, uh, for the period during which we're going to close the source for the renovation. Uh, so we would need to factor that potentially a little bit of DNA.

Speaker #2: Thank you. Our next question comes from the line of Martin Landry with Stifel, your open.

Operator 2: Thank you. Our next question comes from the line of Martin Landry with Stifel. Your line is now open.

Operator: Thank you. Our next question comes from the line of Martin Landry with Stifel. Your line is now open.

Speaker #11: Hi. Good morning. I would like to touch on your same-store sales guidance for fiscal '27. I would like to know a little bit what assumptions you've used in terms of traffic and basket size and also if you can talk a little bit about price increases quantified maybe what you've done in terms of price increases in '26 and what's implied in your guidance for '27.

Martin Landry: Hi, good morning. I would like to touch on your same-store sales guidance for fiscal 2027. I would like to know a little bit what assumptions you've used in terms of traffic and basket size. Also, if you can talk a little bit about price increases, you know, quantify maybe what you've done in terms of price increases in 2026 and what's implied in your guidance for 2027. Thank you.

And then the first bucket is really, um, the most uncertain. Um, so this is about transitioning the products, um, and we talked about all the factors, but this one, as you might appreciate, uh, we barely have, you know, a Dollarama product in the country. And so, to start, um, guessing the impact of the transition, um, is a little, um, is a little dangerous at this point, but certainly once we get, um, greater clarity there, you know, we'll be happy to share with you. Uh, but that's how I would think about framing, you know, the net income loss for this year.

Thank you. Our next question comes from the line of Mark, Kardon with UBS your line is now open.

Speaker #11: Thank you.

Speaker #4: Yeah. Taking it from a high level, the three to four percent, if you recall, it's the same guidance as we provided last year. And so to an earlier comment, when we think about the economic and demand side, it's a very similar setup than what we have seen what we have seen last year.

Patrick Bui: Yeah. You know, taking it from a high level, the 3% to 4%, if you recall, is the same guidance as we provided last year. To an earlier comment, when we think about the economic and demand side, it's a very similar setup than what we have seen last year. The slight nuance, perhaps, compared to last year is, towards the end of fiscal 2026, we started seeing some price increases from the domestic side, which will trickle into fiscal 2027. There's a little bit of an uplift when we think about the beginning of fiscal 2027. Other than that, you know, we expect a context that is very similar to last year, sorry.

Good morning. Thanks for taking the question so I wanted to touch quickly on the competitive backdrop. Are you guys seeing any shifts in intensity particularly from some of the mass merchants? And then population growth has also pulled in meaningfully, any shifts in how you approach unit growth placement going forward and same store sales just given the changing Dynamics there. Thanks.

Speaker #4: The slight nuance perhaps compared to last year is towards the end of fiscal '26, we started seeing some price increases. From the domestic side, which will trickle into fiscal '27.

No, I think the market in Canada is quite stable. Uh, competition remains stable. Uh, there's no real new entrance to talk about uh overall. I would say it's business as usual in Canada,

Thank you.

Our next question comes from the line of Martin Landry with Stifel. Your line is now open.

Speaker #4: So there's a little bit of an uplift when we think about the beginning of fiscal '27. But other than that, we expect a context that is very similar to this year.

Speaker #4: So to last year, sorry. I mean, certainly, as we start the year, there's a lot happening out there and a lot of unknowns. And so we think it's prudent to start with the same guide as we've had last year at three to four percent.

Patrick Bui: I mean, certainly as we start the year, there's a lot happening out there and a lot of unknowns. You know, we think it's prudent to start with the same guide as we've had last year at 3% to 4%.

Hi, good morning. Uh, I would like to touch on your same store, sales, guidance for fiscal 27. Um, I would like to, uh, to know a little bit what assumptions you've used in terms of, um, uh, traffic and, and basket size. And also, if you can talk a little bit about, uh, price increases, uh, you know, quantify, maybe what you've done in in in terms of price increases in 26 and what's implied in your guidance for 27. Thank you.

Yeah.

Speaker #2: Thank you. Our next question comes from the line of Zihan Ma with Bernstein, your line is now open.

Operator 2: Thank you. Our next question comes from the line of Zhihan Ma with Bernstein. Your line is now open.

Operator: Thank you. Our next question comes from the line of Zhihan Ma with Bernstein. Your line is now open.

Speaker #12: Hi. Thank you. I wanted to circle back on the Australia side. I think initially you were kind of saying that it probably takes three to four years in that range to turn profitable in Australia.

Zhihan Ma: Hi, thank you. I wanted to circle back on the Australia side. I think initially you were kind of saying that it probably takes three to four years in that range to turn profitable in Australia. Wondering if that's still the right timeline to think about it. I'm assuming that probably means you'll have enough time to convert all the merchandising in stores, but probably not remodel all the stores. How should we think about what does it take to turn profitable on the ground? Thank you.

Um, you know, taking from a high level, the 3 to 4%, uh, if you recall, it's the same guidance as we provided uh last year. Um, and so to an earlier comment,

Speaker #12: Wondering if that's still the right timeline to think about it. And I'm assuming that probably means you'll have enough time to convert all the merchandising in stores but probably not remodel all the stores.

Speaker #12: How should we think about what does it take to turn profitable on the ground? Thank you.

Speaker #4: Yeah. Thanks for the question. So consistent with what we said in the past, this is a multi-year transformation. I.e., four years. And what the four years takes into account is think of the conversions being an important part of this transformation.

Patrick Bui: Yeah, thanks for the question. You know, consistent with what we've said in the past, this is a multi-year transformation, i.e., 4 years. What the 4 years takes into account is, think of the conversions being an important part of this transformation. 400 stores going at an average clip of 100 per year, that takes 4 years. For us to say the transformation is complete, we need to make sure that we're well advanced, if not completed, on the conversion side. Hopefully, what we'll see in 4 years is that we'll have our stores converted and a strong assortment of Dollarama SKUs in the stores. Yes, we remain consistent with that 4-year timeline.

Speaker #4: So 400 stores, going at an average clip of 100 per year, that takes four years. So for us to say the transformation is complete, we need to make sure that we're well advanced, if not completed, on the conversion side.

When we think about the economic and demand side, uh, it's a very similar setup than what we have seen. Uh, what we have seen last year, the slight Nuance perhaps compared to last year is uh, towards the end of fiscal, 26. We started seeing some price increases, uh, from um, from the domestic side, which will trickle into fiscal 27. So there's a little bit of an uplift, uh, when we think about the beginning of fiscal 27. But other than that, you know, we expect a context that is very similar, um, to, to this year. So, uh, to last year, sorry. Um, I mean, certainly as we start the year, uh, there's a lot happening out there and a lot of unknowns and so, um, you know, we think it's prudent to start with the same guide as we've had last year at 3 to 4%.

Speaker #4: And once these hopefully, what we'll see in four years, is that we'll have our stores converted and a strong assortment of Dollarama SKUs in the stores.

Thank you. Our next question comes from the line of Zeon ma with Bernstein. Your line is now open.

Speaker #4: And so, yes, we remain consistent with that four-year timeline.

Hi, thank you. Um, I wanted to Circle back on the Australia side. I think initially you were kind of saying that it probably takes

Speaker #2: Thank you. Our next question comes from the line of Luke Hannan with Canada Core Genuity, your line is now open.

Operator 2: Thank you. Our next question comes from the line of Luke Hannan with Canaccord Genuity. Your line is now open.

Operator: Thank you. Our next question comes from the line of Luke Hannan with Canaccord Genuity. Your line is now open.

Speaker #13: Thanks. Good morning, Patrick. You touched on the first bucket as it relates to Australian business transformation. As being the most important and talked about refreshing the assortment through the balance of this year.

Luke Hannan: Thanks. Good morning, Patrick. You touched on the first bucket as it relates to the Australian business transformation as being the most important and talked about refreshing the assortment through the balance of this year. Just curious to know, how did you target that initial cohort of SKUs that you're looking to swap out and put in your own? Are they concentrated within any particular price points or category as we think about your assortment?

3 to 4 years in that range to turn profitable in Australia wondering if that's still the right timeline to think about it and I'm assuming that probably means you'll have enough time to convert all the merchandising in stores but probably not remodel, all the stores. How should we think about what it? What does it take to turn profitable on the ground? Thank you.

Speaker #13: Just curious to know, how did you target that initial cohort of SKUs that you're looking to swap out and put in your own? Are they concentrated within any particular price point or category as we think about your assortment?

Speaker #4: So the initial study was on, of course, Dollarama's strongest SKUs. Taking into account, of course, the SKUs that are transferable to Australia since they have different compliance rules, different standards in different products, different voltages in their electricity grids, different sizing in their notepads that they follow a UK standard on things, and the stationary lines.

Patrick Bui: The initial study was on, of course, Dollarama's strongest SKUs, taking into account, of course, the SKUs that are transferable to Australia since they have different compliance rules, different standards, and different products, different voltages in their electricity grid, different, you know, sizing in their notepads, that they follow a UK standard on things in the stationery lines. Barring the exceptions that are different between Canada and Australia, the balance of the items, we started with a focus on compliance first and foremost, the items that we were able to do compliance quickly on, because the Australian compliance standards are entirely different from Canada's. You know, an entire compliance study has to be done on every single SKU that goes into the country.

Um, and and what the 4 years takes into account is um, think of the conversions being an important part of this transformation. So, 400 stores going in an average clip of a 100 per year that takes 4 years. So for us to say the transformation is complete, we need to make sure that we're well well, Advanced if not completed uh, on the on the conversion on the conversion side and once these hopefully what we'll see in 4 years is that we'll have our source converted and a strong assortment of dollar Rama skues in the stores. And so yes, we remain consistent with that 4 year timeline.

Speaker #4: So barring the exceptions that are different between Canada and Australia, the balance of the items we started with a focus on compliance first and foremost, the items that we were able to do compliance quickly on, because the Australian compliance standards are entirely different from Canada's.

Thank you. Our next question comes from the line of Luke Hannon with Canaccord Genuity. Your line is open.

Speaker #4: So an entire compliance study has to be done on every single SKU that goes into the country. But the goal is to get all Dollarama SKUs into Australia within the next two years or so.

Patrick Bui: you know, the goal is to get all Dollarama SKUs into Australia within the next two years or so. The priority started with our best SKUs and the most transferable SKUs.

Thanks. Good morning. Patrick. You you touched on the the first bucket, as it relates to the the Australian business transformation, as being the most important and talked about refreshing the assortment, uh, through the balance of this year. Just curious to know, how did you target that initial cohort of skus that you're looking to uh, swap out and and put in your own? Are they concentrated within any particular price point or a category as we think about your assortment?

Speaker #4: The priority started with our best SKUs and the most transferable SKUs.

Speaker #2: Thank you. Our next question comes from the line of Corey Tarlowe with Jefferies, your line is now open.

Operator 2: Thank you. Our next question comes from the line of Corey Tarlowe with Jefferies. Your line is now open.

Operator: Thank you. Our next question comes from the line of Corey Tarlowe with Jefferies. Your line is now open.

Speaker #11: Great. Great. Thanks. Patrick, you made a comment that around a $10 million loss from Australia and then I think building to like $35 to $45 million as a investment or starting point.

Speaker 15: Great. Great, thanks. Patrick, you made a comment that around a AUD 10 million loss from Australia, and then I think building to like CAD 35 to 45 million as an investment or starting point. I think that's like CAD 0.15 to 0.25. Can you just clarify kind of the glide path on that and on the investments? Just wanna double-click on that. Thanks so much.

Corey Tarlowe: Great. Great, thanks. Patrick, you made a comment that around a AUD 10 million loss from Australia, and then I think building to like CAD 35 to 45 million as an investment or starting point. I think that's like CAD 0.15 to 0.25. Can you just clarify kind of the glide path on that and on the investments? Just wanna double-click on that. Thanks so much.

Speaker #11: I think that's like 15 to 25 cents. Can you just clarify kind of the glide path on that and on the investments to want to double-click on that?

Speaker #11: Thanks so much.

Speaker #4: Yeah. Sorry. I part of your question, I cut off, but yes, you're starting from that $10 million base just as the business operating as normal.

Patrick Bui: Yeah, sorry, part of your question I cut off, but yes, you're starting from that CAD 10 million base, just as, you know, the business operating as normal. Then you would add on top of that, you know, CAD 35 to 45 million dollars of incremental integration cost. Then I also talked about, you know, the two other buckets, you know, the impact of the store opening. There is some incremental P&L impact there, but that's mostly CapEx. Then you would need to factor in something, you know, we're guiding that it will lead to a net loss in sales. That would have an impact on your bottom line. But you would need to add all those pieces.

So the, the initial, uh, study was on, of course, all around the strong excuse, uh, taking into account of course, uh, the skus that are transferable to Australia, since they have different compliance rules, different standards, and different products, different voltages, and their electricity grids different, you know, sizing in their notepads that they follow a, a UK, you know, standard on, on on things, uh, in the stationary lines. So, so barring the exceptions that are different between Canada and Australia. The balance of the items, we started with a focus on compliance, uh, first and foremost, the items that we were able to do compliance quickly on, uh,

Speaker #4: And then you would add on top of that 35 to 45 million dollars of incremental integration cost. And then I also talked about the two other buckets, the impact of the store opening.

Australian compliance standards are entirely different from Canada. So, you know, an entire compliance study has to be done on every single SKU that goes into the country. Uh, but you know, the goal is to get all Dollarama skues into Australia within the next 2 years or so.

uh,

Speaker #4: So there is some incremental P&L impact there, but that's mostly CapEx. And then you would need to factor in some thing, we're guiding that it will lead to a net loss in sales.

The priority started with our best use and the most transferable.

Thank you. Our next question comes from the line of Corey tarlow with Jeffries. Your line is now open.

Speaker #4: So that would have an impact on your bottom line. But you would need to add all those pieces. And so all of that transformation especially when you think about integration costs, have started as we kicked off the new year and the team is working very hard to transform the business.

Great, great. Thanks. Um, Patrick you made a comment that um

Patrick Bui: All of that transformation, especially when you think about integration costs, have started as we kicked off the new year, and the team is working very hard to transform the business. Also as a necessary condition, are also incurring incremental costs.

Around a 10 million dollar loss from Australia. And then, I think building to like, 35 to 45 million dollars as a

Speaker #4: But also as a necessary condition are also incurring incremental costs.

Investment or starting point. Um, I think that's like 15 to 25 cents. Can you just clarify kind of the the Glide path on that and then the investments just want to double? Click on that. Thanks so much.

Speaker #11: And I just wanted to add that clearly the Dollarama team feels strongly that in the long term, this is very exciting project. And that bringing value to the Australian consumer has merit both for the consumer and for our shareholders.

Neil Rossy: I just wanted to add that, clearly the Dollarama team, you know, feels strongly that in the long term, this is a very exciting project, and that bringing value to the Australian consumer has merit, both for the consumer and for our shareholders. While this is a four-year project, once you've established a, you know, a low-cost retail platform in Australia with, you know, by that point over 500-600 stores, we feel very confident that being the 800-pound gorilla in the market will play very well for our shareholders.

Speaker #11: So while this is a four-year project, once you've established a low-cost retail platform in Australia, with by that point over 500, 600 stores, we feel very confident that being the 800-pound gorilla in the market will play very well for our shareholders.

Yeah, sorry, I I I part of your question, I, um, cut off but yes, you're starting from that $10 million uh, base. Um, just as you know, the business operating as, as as normal and then you would add on top of that, you know, 35 to 45, uh, million dollars of of incremental uh, integration cost. Um, and then I also talked about, you know, the 2 other buckets. Um you know the the impact of the store openings. So there's there is

Speaker #2: Thank you. And I'm showing no further questions at this time. This does conclude today's call. Thank you all for your participation. You may now disconnect.

Operator 1: Thank you. I'm showing no further questions at this time. This does conclude today's call. Thank you all for your participation. You may now disconnect.

Operator: Thank you. I'm showing no further questions at this time. This does conclude today's call. Thank you all for your participation. You may now disconnect.

Some incremental, p&l impact there. But that's mostly capex. And then you would need to factor in something, you know, we're guiding that it will lead to a net loss, uh, uh, in sales. So that would have an impact on your bottom line. But you would need to uh, add all those, all those pieces. Um, and so, um, all of that transformation, um, especially when you think about

costs uh have started as we uh as we kicked off the new year and the team is working very hard to transform the business but also as a necessary condition are also incurring, uh incremental costs,

And I just wanted to add that uh clearly the dollar and the team you know feel strongly that in the long term. This is very exciting project and

By that point, over 5 600 stores. We feel very confident that

Being the 800 pound gorilla in. The market will will play very well for our share.

Thank you.

Q4 2026 Dollarama Inc Earnings Call

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