Dollarama Inc. (DOL/TSX) has increased its ownership in Latin American discount retailer Dollarcity to 60.1% after acquiring an additional 10% stake. The Montreal-based company said the purchase was completed through an exchange of 6,060,478 Dollarama common shares, a package valued at roughly $761.7 million based on Dollarama’s share price of $125.68 on the day of the transaction.
Dollarama acquires Dollarcity
Alongside the immediate increase to a 60.1% holding, Dollarama has secured an option to acquire an additional 9.8% interest in Dollarcity at any time up to Dec. 31, 2027. The companies also announced governance arrangements specifically tied to Dollarcity’s planned expansion into Mexico.
Under the agreed terms for the Mexican business, Dollarama and Dollarcity’s founding stockholders will indirectly hold 80.05% and 19.95% stakes respectively. Dollarcity has indicated it intends to pilot its first Mexican store in 2026, marking the next step in the retailer’s regional growth trajectory.
Dollarama’s chief executive, Neil Rossy, said Dollarcity’s experienced leadership positions the business to continue delivering profitable growth across existing markets and in its next market of entry. Rossy emphasized that Dollarama will apply the same measured, disciplined approach it used for previous international entries—specifically citing the company’s launches in Colombia in 2017 and Peru in 2021—when preparing for expansion into Mexico.
This strategic increase in ownership and the option on further shares reinforce Dollarama’s commitment to expanding its footprint in Latin America. The transaction ties Dollarama more closely to Dollarcity’s operational strategy and future market moves, giving the Montreal firm more influence over regional growth plans while offering Dollarcity greater access to capital and expertise.
Dollarama profits for the first quarter
The acquisition announcement coincided with Dollarama’s release of first-quarter financial results. For the quarter ended April 28, the company reported net earnings of $215.8 million, or $0.77 per diluted share, compared with $179.9 million, or $0.63 per diluted share, in the same quarter a year earlier. Quarterly sales reached $1.4 billion, up from $1.3 billion in the prior-year period.
Comparable store sales rose 5.6% in the quarter. That improvement reflected an 8.7% increase in the number of transactions, which was partially offset by a 2.8% reduction in average transaction size. Management described this pattern as a progressive normalization in comparable store sales, driven largely by sustained demand for core consumables and everyday essentials.
Rossy observed that Canadian consumers continue to seek strong value for their spending, and he reiterated Dollarama’s focus on delivering both value and convenience. The company said it remains dedicated to executing on its value proposition as it serves customers looking to stretch their budgets.
From a strategic perspective, healthy quarterly results support Dollarama’s decision to deepen its investment in Dollarcity. Consistent profitability and sales growth provide the financial flexibility to pursue cross-border expansion through equity exchanges and strategic partnerships, while the option to increase ownership through 2027 preserves additional upside for Dollarama as Dollarcity executes on its Mexico plans.
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