Dollarama (TSX:DOL) EPS Jump Reinforces Bullish Efficiency Narrative After Q3 2026 Results

Dollarama (TSX:DOL) has just posted another busy quarter, with Q3 2026 revenue of about CA$1.9 billion and basic EPS of CA$1.17, alongside net income of roughly CA$322 million as the discount retailer leans into steady consumer demand. The company has seen revenue move from CA$1.56 billion in Q3 2025 to CA$1.91 billion in Q3 2026, while basic EPS stepped up from CA$0.98 to CA$1.17 over the same period. This sets the stage for investors to focus on how sustainably Dollarama is translating sales momentum into margins.

See our full analysis for Dollarama.

With the latest numbers on the table, the next step is to weigh these results against the most common narratives around Dollarama to see which stories hold up and which need a rethink.

See what the community is saying about Dollarama

18% Profit Growth Sets The Backdrop

• Over the last year, Dollarama generated about CA$1.3 billion in net income on roughly CA$7.0 billion of revenue, with earnings up 18.3% and a trailing net margin of 18.6% compared with 17.9% a year earlier.
• Consensus narrative leans bullish on operational efficiency and scale, and the latest numbers give it plenty of support:
  • Trailing twelve month EPS climbed to CA$4.72 from CA$4.18 a year earlier, lining up with the view that disciplined cost control is turning steady demand into faster profit growth.
  • Same store sales growth of 4.9% in both Q1 and Q2 2026 versus 3.3% in Q3 2025 matches the story that a value focused shopper base is driving consistent traffic across the chain.

High Growth Meets High Valuation

• At a share price of CA$197.49, the stock trades on a trailing P E of 41.3 times, well above peer and industry averages of about 19 times, even though that price sits around 8.5% below a DCF fair value of about CA$215.91.
• Bears focus on the rich multiple, and the numbers both justify and challenge that concern:
  • Forecast revenue and earnings growth of roughly 8.8% and 8.7% per year are solid but not dramatically faster than the wider market, which makes the premium P E stand out more.
  • Five year earnings growth averaging about 18% annually helps explain why investors have been willing to pay up, so skeptics are really questioning whether the next few years can repeat that pace.

🐻 Dollarama Bear Case

Debt And Expansion Raise Execution Stakes

• The balance sheet is flagged as having a high level of debt, while analysts still expect net income to rise from about CA$1.3 billion today to CA$1.6 billion by around 2028 alongside revenue climbing toward roughly CA$9.1 billion.
• Bullish narrative argues that international expansion and logistics investments will keep that growth on track, but the figures show where execution really matters:
  • Opening new markets, plus steady same store sales growth near the mid single digits, needs to continue if profits are to rise from CA$1.3 billion to the projected CA$1.6 billion while margins ease from 18.9% to 17.5%.
  • The expectation that the company could still trade near a 39.9 times P E on those 2028 earnings means leverage and integration of acquisitions have to be managed carefully so that debt does not become a drag on that story.

🐂 Dollarama Bull Case

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Dollarama on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

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A great starting point for your Dollarama research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

Explore Alternatives

Dollarama’s premium valuation, easing margin outlook, and elevated leverage mean investors face real execution risk if growth slows or costs surprise on the upside.

If that mix of rich pricing and balance sheet pressure makes you uneasy, use our solid balance sheet and fundamentals stocks screener (1943 results) to quickly find financially sturdier businesses built to endure tougher conditions.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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