Dollarama has ‘smooth’ Q1, bracing for impacts of Iran war: CFO

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MONTREAL — Dollarama Corp.’s chief financial officer says the company had a “smooth quarter,” even as war in the Middle East blocked key fuel shipping routes and posed challenges for retailers.  

Patrick Bui said the discount retailer didn’t incur several of the logistics costs it typically sees in its first quarter, which wrapped up when the conflict between Iran, the U.S. and Israel was well underway.

“When we talk about the impacts of higher fuel, none of that actually impacted the first quarter,” he explained on a call with analysts Thursday.

“These costs are to be expected later on in the year and specifically, in the second half of the year.”

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Bui’s remarks came as many retailers are already feeling the effects from the overseas strife. Fuel costs have sharply risen because the war has choked the Strait of Hormuz, a seaway where one fifth of the world’s oil supply typically travels through. Importers and exporters have also seen shipping expenses rise as they reroute goods away from the Middle East. 

Dollarama has previously indicated it will not be immune to such pressures. The war will make it more costly to gather raw materials to make merchandise, produce inventory and move it from factories to distribution warehouses and then on to stores, the retailer’s executives have warned.

The longer the war goes on, the more expensive it will be, they said.

“Who knows what the price of fuel and the impact on the cost of products will be,” Bui said Thursday. “The only thing that we could say is that after Q1, (the war) certainly dragged on longer than we had initially anticipated.”

While Bui touched on the war several times on the call, the discussion was mostly focused on Dollarama’s first-quarter profit of $302.3 million, up from $273.8 million in the same quarter last year.

Its earnings amounted to $1.11 per diluted share for the quarter ended May 3 compared with a profit of 98 cents per diluted share a year earlier.

Excluding an unrealized gain from a derivative on equity-accounted investments, Dollarama would have earned $1.05 per diluted share in its latest quarter.

Sales for the quarter totalled $1.85 billion, up from $1.52 billion in the same quarter last year.

Comparable store sales in Canada for the quarter were up 5.6 per cent helped by a 3.5 per cent increase in the number of transactions and a two per cent increase in average transaction size.

Dollarama said the growth was driven by an increase in its total number of stores in Canada, higher comparable store sales and the Reject Shop, an Australian discount store it acquired last year.

The company is slowly adapting the Reject Shop to Dollarama’s model and has plans to renovate 400 stores over the next four years. 

By the quarter’s end, 28 of its 410 locations in Australia were operating with the Dollarama layout and fixtures, CEO Neil Rossy said on the same call as Bui.

So far, consumers are liking the layout changes and the greater number of products Dollarama has introduced. 

Beyond improving store navigation for the consumer, the updated format allows for a broader product assortment.

“While it remains far too early to draw conclusions with such a small sample size, these initial indicators are certainly motivating the team as we continue to execute our road map,” Rossy said.

This report by The Canadian Press was first published June 11, 2026.

By Tara Deschamps