Dollarama Inc.

and Patrick Bowie, CFO, will make a short presentation, followed by a question-and-answer period open exclusively to financial analysts. The press release financial statements and management discussion and analysis are available at dollarama.com and the investor relations section, as well as on CDAR+. Before we start, I have been asked by Dollarama to read the following message regarding forward-looking statements. Dollarama's remarks today may contain forward-looking statements about its current and future plans, expectations, and intentions, results, levels of activity, performance, goals or achievements, and any other future events or developments. Forward-looking statements are based on information currently available to management and on estimates and assumptions made based on factors that management believes are appropriate and reasonable in the circumstances. However, there can be no assurance that such estimates and assumptions will prove to be correct. Many factors could cause actual results, levels of activity, performance, achievements, future events or developments to differ materially from those expressed or implied by forward-looking statements. As a result, Dollarama cannot guarantee that any forward-looking statement will materialize, and you are cautioned not to place undue reliance on these forward-looking statements. For additional information on the assumptions and risk, please consult the cautionary statement regarding forward-looking information contained in Dollarama's MD&A, dated April 3, 2025, available on CDAR+. Forward-looking statements represent management's expectations as at April 3, 2025, and, 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. I would now like to turn the conference over to Neil Rossi.

Thank you, Operator, and good morning, everyone. Throughout fiscal 2025, Dollarama was there for Canadians, delivering compelling year-round value across our broad assortment of everyday goods and providing convenience through our growing national store network. This strong execution by all Dollarama teams is reflected in both our fourth quarter and full year financial and operational results. We generated same store sales growth of 4.9% in Q4, capping off the year on a high note and bringing full year SSS to 4.6%. Q4 SSS growth reflected a positive seasonal performance on top of the sustained demand for consumables from cautious, value-seeking customers. On the real estate front, we opened 15 net new stores in Q4, bringing our total to 65 for the year. Our store network across Canada at fiscal year ends stood at 1,616 stores. Last quarter, we increased our long-term target in Canada to 2,200 stores by 2034. As we work towards this goal, we expect to generally maintain our historical annual pace of growth but we will also seize opportunities as they come along. For fiscal 2026, in addition to a strong store pipeline, we secured opportunities to take over leases from retailers exiting the market. As a result, our net new store opening range is between 70 and 80 net new stores. While subject to annual review ahead of setting guidance, we expect to then come back in line with our historical pace of 60 to 70 net new stores. Turning to our capital project, we continue to develop a two-node logistics model to bring even more agility and resilience to our logistics operations through redundancy. Since announcing our plans last quarter, we completed the acquisition of the land for a total cash consideration of $46.7 million. The parcel is located north of Calgary where we will build a logistics center that integrates distribution and warehousing activities. As a reminder, the addition of a western logistics hub by the end of 2027 will be in complement to our currently centralized Montreal area logistics operations, which continue to run business as usual. The project planning phase is in full swing, with permitting and building design well underway, and with construction set to begin this summer. We are in the process of finalizing our roadmap through the project commissioning, including the timing of certain expenditures based on design decisions, construction schedule, which we expect to complete in the coming months. In LATAM, Dollar City had another busy year as the team works towards its recently updated long-term store target of 1,050 stores by 2031. in the current countries of operation. Dollar City opened an impressive 100 net new stores in calendar 2024, bringing their total number of stores in Colombia, Peru, El Salvador, and Guatemala to 632 at year end. We are very pleased with this strong execution. New stores were primarily opened in Colombia and Peru, a trend which is expected to be maintained this year. Strong execution continues to translate into strong financial performance. Dollar City is not only able to self-fund its growth in its current countries of operation, it is also generating excess cash that can be returned to its shareholders. Since we increased our equity interest and expanded our partnership with Dollar City, we have been working diligently to prepare the market for entry into Mexico. As a result of this work, I am pleased that we have been able to accelerate our timeline to this year. We expect to open our first locations in Mexico this summer. Consistent with past practice, we will test our concept first prior to making the call on a full ramp up. Finally, last week we announced that we entered into a definitive agreement to acquire Australia's largest discount retailer as we pursue additional opportunities for Dollarama. With this acquisition, we have an opportunity to bring our value proposition to a new market through an at-scale platform in a value retail market with a path for growth. We believe that following the gradual transition of their business to our retail model, which we expect will take upwards of three years, we can unlock their margin and growth potential over the long term to the benefit of all stakeholders. The transaction is subject to customary conditions including shareholder and regulatory approval, and is expected to close during the second half of calendar 2025. While we are all looking forward to bringing the TRS team on board later this year, we must let the process follow its course. In the last year, we have made excellent progress advancing our growth plans across multiple platforms, reflecting our conviction in the relevance of our business model across demographics and geographies. Our success and extending our reach, whether in Canada or internationally, is made possible by the incredible team we have at all levels. I want to thank everyone at Dollarama and Dollar City, including every employee on the front lines, for doing their part in providing everyday value and convenience to our customers. It's thanks to all contributions, large and small, that we are in the position we are in today and that our long-term growth prospects are so compelling. Certainly, fiscal 2026 is gearing up to bring its fair share of challenges and uncertainty, something the last several years seems to have had in common. The particularity this time around is the unpredictability factor brought on by the current trade environment, coupled with a weakening economic outlook. For our business, the direct impacts of the ongoing trade war are the counter tariffs on a portion of goods we import from the U.S. It is not an inconsequential impact, but it is, we believe, a manageable one and one our peers are facing as well. As agile retailers and importers, we have tools to navigate this, whether through product substitutions or pricing adjustments where necessary. As a price follower, our objective remains the same, delivering the best year-round and relative value across our broad offering and within our fixed price point. While customer behavior remains difficult to forecast, our assumption is that consumers will remain cautious on discretionary spending and continue to seek out value in this context. Our focus will be on the disciplined execution of our long-term growth plan and on being proactive as our operating environment evolves. Our value and convenience promise resonates with consumers, and we will continue leveraging our retail expertise, sourcing strengths, and operational know-how to deliver on that value in fiscal 2026. With that, I'll pass it over to Patrick.

Thank you, Neil, and good morning, everyone. Let's drill down on our fourth quarter and fiscal 2025 results. On the back of a strong quarterly and annual performance, we have either met or exceeded our guidance across all metrics. Q4 sales, which included an extra week compared to last year, increased by 14.8% year-over-year to nearly $1.9 billion. For fiscal 2025, sales increased by 9.3% to more than $6.4 billion. SSS came in at 4.9% for Q4, representing a two-year stack of 13.6. While consumables continued to be an important sales driver, holiday and winter seasonal sales gave us an extra lift in Q4. Looking at trends throughout the quarter, sales picked up by early mid-December after a slower November, and those positive trends continued through January. This was further supported by two extra Halloween sales days, which fell in Q3 in the prior year. Looking at our performance throughout fiscal 2025, we saw, as anticipated, a progressive normalization in SSS trends. Full-year SSS came in at 4.6%, resulting in a slight guidance outperformance and a two-year stack of 17.4% growth. Q4 gross margin was 46.8% of sales compared to 46.3% in Q4 of fiscal 2024. The improvement primarily reflects lower logistics costs. Full-year gross margin came in at 45.1% of sales compared to 44.5% in fiscal 2024. The improvement was due to lower inbound shipping and logistics costs, resulting in a slight guidance beat here as well. SG&A was 14.7% of sales for Q4, compared to 14.5% in the prior year Q4, reflecting higher store operating costs partially offset by the positive impact of scaling. SG&A for fiscal 2025 was 14.5% of sales compared to 14.4% for fiscal 2024, impacted by the same factors as the quarter and coming in at the low end of our guidance range. Q4 EBITDA was $670 million compared to $559 million last year. For the year, EBITDA came in at $2.1 billion, compared to $1.9 billion for fiscal 2024. Diluted EPS increased by 21.7% to $1.40 for the quarter and grew 16.9% to $4.16 for the year. Our share of Dollar City's net earnings for Q4 amounted to $58 million, compared to $32.8 million last year. The contribution for the full year was $129.9 million compared to $75.3 million for the same period last year. The 76.8% and 72.5% period-over-period increases, respectively, are primarily attributable to strong operational performance in our increased ownership stake. Dollar City's results in calendar 2024 were mainly driven by an increase in sales, supported by the growth in total number of stores and continued scaling of the business. This was also supported by a higher gross margin as a percentage of sales from lower inbound shipping and logistics costs, which was partially offset by slightly higher SG&E costs stemming from increased labor costs. We have also announced this morning that Dollar City's board of directors approved a cash dividend totaling $62.5 million US. Our share corresponded to 37.6 million US or 54.6 million Canadian and was received in the first quarter of fiscal 2026. Going forward, dividends are expected to be declared and paid by Dollar City twice a year. We will be using our dividend proceeds to fund our share of the Mexico expansion costs over the near term, required investments which have also been pulled forward with the acceleration of market entry. As a result, about half of our share of this dividend will be allocated towards Mexico investments. On CapEx for the year, we came in just below the top end of our guidance range at $195.3 million. This number excludes the final land acquisition costs of $46.7 million and an additional $4.9 million that went towards land development costs in the quarter as we prepare the groundwork for our future Western Logistics Hub. On the NCIB front, we remain active with the repurchase of more than 8.1 million common shares for cancellation through fiscal 2025 for a total cash consideration of nearly $1.1 billion, marking Dollarama's largest annual buyback on record. We also announced today that the Board has approved a 15% increase to our quarterly cash dividend of $0.1058 per share. Looking now at our financial guidance and outlook for fiscal 2026. We expect to continue generating consistent annual same-store sales growth, given the enduring relevance of our business model and our unique role within the Canadian retail ecosystem. This is despite coming from several years of outsized annual SSS growth, followed by progressive normalization, and now having to contend with an unpredictable trade environment and a weak economic context. Factoring that in, we anticipate generating between 3% and 4% SSS growth for fiscal 2026. To achieve this, we will leverage our product sourcing and merchandising expertise supported by regular product refreshes in our multi-price point strategy to deliver value to our customers. On gross margin as a percentage of sales, we do expect that headwinds will pressure margins compared to last year. As a result, our annual guidance range is between 44.2% and 45.2%. On SG&E, we expect higher labor costs to continue, as well as increased store operating costs, including higher curbside recycling costs. Our ongoing efficiency and labor productivity initiatives should help offset those pressures resulting in an improved guidance range for SG&E as a percentage of sales of 14.2% to 14.7% for fiscal 2026. Looking at Dollar City, one item of note is the new timeline for Mexico. With market entry happening this year, we will be required to make investments and will incur ramp-up costs. we should expect a loss in the range of roughly $10 to $20 million U.S. for fiscal 2026 in Mexico. Turning to CapEx, our fiscal 2026 guidance range of between $185 and $210 million will go towards new store openings and other transformational capital requirements. The year-over-year increase is primarily a result of a higher number of planned store openings. For the time being, guidance excludes the portion of the $450 million budget estimate for our Western Logistics Hub development that we intend to deploy this fiscal year. We are still in the process of finalizing the plan, specifically the timing of certain significant expenditures. We still expect it to be front-loaded It's just a question of completing that work. We expect to be able to provide more color on logistics CapEx for fiscal 2026 when we release our Q1 results. In terms of returning capital to shareholders, our approach remains unchanged. Neither our logistics hub project nor our proposed acquisition of TRS is expected to impact our overall strategy. we have sufficient financial flexibility to fund these strategic investments. Supported by our strong cash flow generation, we intend to continue being active on our NCIB program, allocating a portion of cash towards share buybacks, subject to market conditions, and to maintain a dividend subject to quarterly approval. While the trade environment remains unpredictable and the economic outlook uncertain, What we do know is that Canadian consumers appreciate and rely on our value and convenience promise. We also have growth plans for each of our platforms. We will continue to execute on these in fiscal 2026 to further strengthen our long-term growth path to the benefit of all stakeholders. With that, I'll now turn the call back to the operator for the Q&A.