Dollarama Inc. says its business stands to be shaken but not upended by counter-tariffs Canada has applied to goods coming in from the U.S.
Chief executive Neil Rossy told analysts on a call Thursday that the ongoing trade war that prompted two rounds of retaliatory tariffs from Canada on items like food, paper and sporting goods are having “not an inconsequential impact” on his dollar store company.
However, he maintained the impact is both “manageable” and being faced by the Montreal-based company’s peers.
“We think that consumer confidence will be a major challenge with these tariff discussions while they continue,” Rossy said.
“While our concept may be more resilient than most, when consumers spend less, they tend to spend everywhere, so tariff wars are not good for anyone.”
Rossy’s remarks came a day after U.S. President Donald Trump delivered a wallop when he imposed a 10 per cent baseline tariff on imports from most countries and revealed a lengthy list of additional duties dozens of nations will additionally face.
Goods compliant with the Canada-U.S.-Mexico trade agreement were spared but imports outside of the pact will face 25 per cent levies. Trump also added 25 per cent tariffs on automobile imports, matching the 25 per cent duties previously imposed on steel and aluminum imports into the U.S.
In response, Canada imposed a round of retaliatory tariffs on March 4. Another tranche came into play on March 12.
The part of Dollarama’s business Rossy thinks could be most affected by tariffs are “consumables.” This category spans paper, plastic and foil products, cleaning supplies, basic health and beauty care items, pet food, confectionary, drinks, snacks and other food merchandise.
To mitigate any effects on these items, Rossy said the company could look to product substitutions or pricing adjustments “where necessary.”
When analysts questioned whether the buy Canadian wave that has materialized across the country would benefit the company, Rossy said, “I can’t tell you in our case that would be something we’ve seen.”
While his company was founded in Canada and has significant operations in the country and a Canadian management team, Rossy said “we are not trying to … maple glaze the Dollarama brand too much.”
“The reality is we try to provide great value every day of the year with or without tariff wars and I would think that Canadians are proud of the fact that Dollarama is a Canadian business to start with,” he said.
The company’s ability to provide value at a low cost helped pushed its fourth-quarter earnings to $391 million or $1.40 per diluted share.
The result announced Thursday for the period ended Feb. 2 was up from a profit of $323.8 million or $1.15 per diluted share a year earlier.
Sales for the quarter totalled $1.88 billion, up from $1.64 billion in the same quarter last year.
Comparable store sales growth for the quarter was 4.9 per cent including a 5.3 per cent increase in the number of transactions and a 0.4 per cent decrease in average transaction size.
The quarter covered a period Dollarama spent advancing plans to open a Calgary-area distribution centre by the end of 2027 and operate 2,200 stores by 2034.
Rossy said Thursday that project planning for the facility opening in Balzac, a hamlet outside Calgary that is known for hosting retailer warehouses, is in “full swing,” with construction to begin this summer.
In the second half of the year, Dollarama also expects to close on a transaction announced last month that will see it buy Australian discount retailer, the Reject Shop.
The deal valued at $233 million is expected to see Dollarama expand the Australian acquisition’s footprint to about 700 stores by 2034.
Rossy expects it to take upwards of three years to transition the Reject Shop to Dollarama’s model, which he sees as the way to boost the company’s margins and growth over the long term.
This report by The Canadian Press was first published April 3, 2025.
Companies in this story: (TSX:DOL)
