Dollarama Inc.

Good morning, and welcome to the Dollarama's fourth quarter and fiscal year 2026 results conference call. On today's call is Neil Rossi, President and CEO, and Patrick Bowie, CFO. They will begin with brief remarks followed by a Q&A with financial analysts. Before we begin, please note that today's remarks may contain forward-looking statements about Dollarama's current and future plans, expectations, intentions, results, or any other future events or developments. Forward-looking statements are based on information currently available to management and on reasonable estimates and assumptions made by management. Many factors could cause actual results, future events, or developments to differ materially from those expressed or implied. You are cautioned not to place undue reliance on these forward-looking statements. Forward-looking statements represent management's expectations as at March 24, 2026. Except as may be required by law, Dollarama has no intention and undertakes no obligation to update or revise any forward-looking statements whether as a result of new information, future events, or otherwise. You are invited to consult the cautionary statement on forward-looking statements in Dollarama's management discussion and analysis dated March 24, 2026. All forward-looking statements on today's call are expressly qualified by this cautionary statement. In addition, Dollarama may refer to certain non-GAAP and other financial measures during the call. Please consult the Non-Gap and Other Financial Measures section of Valorama's MD&A, dated March 24, 2026, for definitions, reconciliations with appropriate gap measures, and other information. The disclosure documents related to this call are available in the Investor Relations section of Valorama.com and on CDAR+. I will now turn the call over to Neil Rossi.

Thank you, Operator, and good morning, everyone. For fiscal 2026, we are pleased to have met or exceeded our financial guidance on all metrics, while we also advanced our growth ambitions. We generated same store sales of 4.2% in Canada for the year and delivered strong earnings growth with EPS increasing nearly 14% year over year. Fiscal 2026 also marked a significant milestone in our international expansion. with Dollar City entry into Mexico and our acquisition of a national discount chain in Australia. In Canada, our compelling value continued to resonate in an economic environment that is weighed on consumer sentiment and discretionary spending. As Canadians face pressures on their household budgets, they turn to Dollarama for year-round value and everyday convenience. Throughout the year, our full assortment contributed to solidifying Dollarama as a destination for affordable goods across our product categories. We experienced solid demand for general merchandise and seasonal items, which speaks to the strength of our buying team and direct sourcing platform. We also saw continued sustained demand for consumable products, which speaks to our ability to offer strong value for sought-after everyday essentials. Unfortunately, the weather did hamper our fourth quarter performance, which was off to a good start. Unfavorable weather conditions across Canada directly impacted both store traffic and peak sale periods through to the end of January. However, we nonetheless generated 1.5% same-store sales growth in the quarter, with basket growth driven by a positive seasonal performance. In Canada, we successfully opened an exceptional 75 net new stores in fiscal 2026. This brought our network across the country to 1,691 stores by the end of January. For fiscal 2027, we are returning to our historical cadence of annual net new store openings in the range of 60 to 70. This past February, we hit another real estate milestone with the opening of our 1700th store in Canada. We are making steady progress towards our long-term target of 2,200 stores by 2034. Reaching this threshold of stores requires us to grow our distribution and warehousing capacity in tandem. The development of our logistics hub in Western Canada is moving along well. Having made significant progress building the structure, with everything moving along on time and on budget, we are on track to have our Calgary hub operational by the end of 2027. Having a two node logistics model support our long term growth in Canada and bring added resilience to our logistics through redundancy. By applying our proven business model, Dollar City continues to generate strong top line momentum, margin expansion and footprint growth across our core markets in Latin America. This is translating into impressive year-over-year network and earnings growth. Consistent with the prior year, Dollar City opened 100 net new stores in 2025, bringing its total store count to just over the 700 store threshold at year end. This includes 11 stores in Mexico since entry last summer, where we are now building a new growth platform. Dollar City is well on its way to achieving its store target of 1,050 stores by 2034. As a reminder, this excludes Mexico, for which we have not yet set a long-term target. In fiscal 2027, Dollar City will continue to grow in its first four countries of operation in LATAM, with a focus on growth in Colombia and Peru. At the same time, we will be carefully scaling our presence and operations in Mexico. While it is still early days, we continue to be pleased with the team's execution and initial customer reception. Over the last few months, we have been firming up our plans in fiscal 2027 priorities for our multi-year transformation of our retail platform in Australia. We have several initiatives underway across three main pillars, merchandising, store experience and network growth, and operational excellence. Deploying aspects of our model is impacting just about every facet of the business. In the near term and through fiscal 2027, this work will be both gradual and disruptive, but it is a prerequisite to setting up our Australian operations for future success. Changing the merchandising strategy is the most important pillar of the transformation and the most complex to implement. We expect our first Dollarama import SKUs to start hitting shelves during the second quarter of fiscal 2027, with imports primarily comprised of general merchandise and seasonal items. The target is to have about a half of the Dollarama import SKUs sourced by the end of fiscal 2027. On the domestic side, which is primarily consumables, we are also looking at products SKU by SKU to deliver increased value to our customers. Under store experience and network growth, Our goal is to renovate the layout and change fixtures in 60 to 80 stores this year, having done four last year. We also aim to open 15 to 25 net new stores, all with the Dollarama layout and fixtures, having opened seven in fiscal 2026. On operational excellence, we are strengthening the IT infrastructure and optimizing various processes. Notably, we are working on migrating Australia's ERP system to ours, to get all our business processes integrated to the same platform. On the logistics front, we are finalizing our plan to optimize operations and support long-term growth. We are also adding team members as we build the bench strength of the local team. Once a store feels like a Dollarama shop and reflects our value proposition through both the offering and shopping experience, we will convert that store to the Dollarama banner. By fiscal year end, we will be in a better position to evaluate our progress on this front and initial customer reception. The objective is to build our brand equity in the market by introducing our strong and differentiated value and convenience positioning, as we have done over time in all of our other markets. As you can see, the year ahead is shaping up to be both busy and exciting for Dollar M. Today, we have strong teams across three continents, working to execute on their respective growth plans with each market bringing its own unique set of characteristics, priorities, and opportunities. While the paths may differ from one market to the next, the long-term vision guiding our efforts remains the same, to deliver unbeatable value to consumers in every market where we operate and to create long-term value for our shareholders. As we enter fiscal 2027, the macroeconomic and geopolitical backdrop is evolving rapidly and remains uncertain. Considering the current economic environment in Canada, we expect that consumers will continue to be cautious and deliberate in their spending. In this context, the importance of value is only increasing, and we believe that the value, convenience, and affordability we offer will continue resonating with consumers. Looking at the broader geopolitical environment, the conflict in the Middle East is beginning to have ripple effects on transportation and production costs. Our business model is resilient and provides us with a number of levers to help mitigate these impacts in the near term. The key variable will be the duration of the conflict, which will determine how persistent these cost pressures will be. As always, we remain highly disciplined as price followers. we will only pass on price increases where absolutely necessary and while staying true to our year-round value proposition. Across the business, our focus is on the disciplined execution of our plans, maintaining our strong value proposition, and leveraging the strengths of our business model to deliver for our customers and our shareholders. With that, I'll pass it over to Patrick.

Thank you, Neil, and good morning, everyone. Let's start with a brief overview of our consolidated results before turning to segment performance. Q4 sales, which included one less week compared to last year, increased by 11.7% to $2.1 billion. For fiscal 2026, sales increased by 13.1% to $7.3 billion, positively impacted by contributions from Australia as well as greater number of stores and SSS growth in Canada. Diluted EPS increased by 2.1% in Q4 to $1.43. This included a positive 3 cent impact from Australia. For the full fiscal year, EPS rose by 13.7% year-on-year to $4.73. Our Canadian segment met or exceeded all financial guidance targets SSS came in at 1.5% for Q4, over and above SSS of 4.9% in Q4 last year. The increase was primarily driven by demand for seasonal products, offset by two important factors. The first is a calendar shift caused by a 52-week fiscal year following a 53-week fiscal year. In the quarter, This resulted in one less historically strong pre-holiday sales week and an additional historically low sales week at the end of January. It also included four less pre-Halloween shopping days compared to Q4 last year, which we recorded in Q3. Excluding the calendar shift, SSS would have been 3.5%. The second factor was the weather. As mentioned by Neil, a high volume of weather events, including cold temperatures and precipitation, impacted store traffic and resulted in lost sales. This is reflected in the 1.6% decrease in the number of transactions. Despite this, basket growth was healthy, growing 3.1%, and we met our annual SSS guidance for the year, coming in at 4.2%. While the weather resulted in softer than anticipated SSS, as weather conditions improved, so did traffic patterns. Store traffic continued to recover nicely as we entered fiscal 2027. Looking ahead to fiscal 2027, we anticipate generating SSS growth in Canada of between 3 and 4%. Consistent with our outlook last year, we continue to expect sustained demand for the compelling value we offer, which remains particularly relevant in the current environment. At the same time, we also remain mindful of the macro environment and the uncertainty it creates. Gross margin for the Canadian segment came in at 46.6% of sales in Q4 compared to 46.8% last year. The variance is primarily due to the 53rd week in fiscal 2025, with the 14th week in fiscal 2025 providing additional scaling benefits. Full year gross margin was 45.6% of sales, slightly exceeding the top end of our guidance. For fiscal 2027, our guidance range for gross margin in Canada is in line with last year. at between 45 to 45.5% of sales based on our ability to actively manage product margins. Looking at early fiscal 2027 and given the current macro context, we are closely monitoring pressures in the global supply chain, which may negatively impact gross margin during the year. SG&A for the Canadian segment in Q4 was 14.5% of sales compared to 14.7% last year. The improvement reflects the positive impact of scaling. Full-year SG&E came in within guidance at 14.4%. For fiscal 2027, we expect scaling to help offset the impact of higher store labour and operating costs. As a result, our annual guidance range for SG&E in Canada is slightly better than in the prior year at between 14.1 and 14.6% of sales. Finally, capex for fiscal 2027 in Canada is between $420 to $470 million. The year-over-year increase primarily reflects capital spend for our logistics hub project, a portion of which shifted over from last year. Turning to Dollar City, Our share of their net earnings in Q4 increased by 22% to $70.5 million. For the year, our share reached $191.5 million, an over 47% increase. This was driven by SSS and store network growth, offset by the ramp-up of operations in Mexico. On a 100% basis, the Mexico business realized a net loss of US $5.4 million, and U.S. $11.7 million for Q4 and the full year, respectively. As the business is still in ramp-up mode, we expect a loss in fiscal 2027 consistent with the range provided last year of between U.S. $10 to $20 million for 100% of the business. On February 5th, Dollar City declared a dividend of U.S. $125 million with our share coming in at US$75.1 million. The doubling of the dividend compared to the previous one declared speaks to Dollar City's strong free cash flow generation, with its profitable growth trajectory continuing to mirror Dollarama's. In early fiscal 2027, we made a capital contribution of US$38 million towards Mexico expansion plans. This follows two U.S. $18 million contributions made last year. As with previous capital contributions, we allocated a portion of our share of the latest dollar city dividend. Looking now at Australia, for the approximately six-month period since our acquisition in late July, the business had a neutral impact on consolidated net earnings for fiscal 2026. For perspective, Looking at the full year and on a pro forma basis, Australia generated approximately $916 million in sales and a net loss of $10.6 million, all in Australian currency. Turning to fiscal 2027, it is expected to be an investment year as we ramp up the integration process. Neil spoke to our priorities across our strategic pillars. As a result, the Australian segment is expected to generate a net loss in fiscal 2027. These impacts are presented in our financial documents and in our investor presentation, which is available on the event page. But I'd like to call out the main ones. First and most significant is the anticipated negative impact from the merchandise changeover and transition to lower price items. As you can appreciate, It is also the hardest to quantify at this stage of the transformation, as it will depend on several factors. These include the timing of the product transition, the speed at which sales of incumbent higher-priced SKUs will be compensated by sales of the lower-priced Dollarama SKUs, and impact on store traffic. That said, we anticipate a negative impact on sales for the year. The second is related to capital expenditures for store renovations and net new store openings. These are estimated at between 400 and 600,000 Australian dollars per renovated store and between 800,000 and a million Australian dollars per net new store. There is also a direct impact on sales during renovation related store closures. Third is P&L related. We expect to incur about $35 to $45 million in incremental costs related to integration, IT transformation, additional headcount, and labor costs. These transformational changes are essential to set the business on a path for profitable growth. There's a lot of work to be done, but we are excited and motivated by the upside potential once we work through some of these major changes to the business. Our vision is to build a leading value retailer with a strong and favorable margin profile compared to global peers. The work we are undertaking in fiscal 2027 will represent a critical first step in our multi-year path to deliver attractive return on investment. Back to Dalarama. In terms of returning capital to shareholders, we repurchased over 4.4 million shares for cancellation during fiscal 2026 for a total cash consideration of $834.2 million. We also announced today that the Board has approved a 13.4% increase to the quarterly cash dividend, bringing it to $0.12 per share. Looking ahead, our priorities are clear. We will continue to allocate capital in a balanced manner as we pursue our profitable growth in Canada and LATAM, and as we embark on the transformation of our Australian platform. Consistent with past practice, we also intend to allocate the majority of excess cash towards share buybacks and a dividend subject to quarterly approval. While the broader economic environment remains uncertain, the underlying fundamentals of our business are strong and our value proposition as relevant as ever. As we enter the next fiscal year, we are focused on discipline execution to advance our growth initiatives across multiple geographies and support long-term value creation for our shareholders. With that, I'll now turn the call back to the operator for the Q&A.

Thank you. To ensure we hear from as many participants as possible, we ask that you please limit yourself to one question. To ask a question, please press star 1-1 on your telephone keypad and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please stand by while we compile the Q&A roster. Our first question is from Irene Nadel with RBC Capital Markets. Your line is now open.

Thanks, and good morning, everyone. I was wondering if we could spend a minute just unpacking that same store sales number. You called out weather. You called out strong seasonal. Can you give us an idea of, you know, what the cadence was through the quarter, what the exit rate was, where we are quarter to date, and what the demand is like across the store? Please and thank you.

Sure. Thanks for your question, Irene. Starting at high level, we believe the overall consumer environment remains exactly the same. Canadians are faced with pressures on their household budgets and they turn to Dollarama for year-round value and everyday convenience. If you look at it sequentially, we had strong momentum as we exited the third quarter. We had strong momentum as we started the fourth quarter in November. And then traffic then dropped off when we encountered unfavorable weather conditions in December and in January. But once those conditions were behind us, traffic resumed nicely in February and as we kicked off fiscal 2027. So it seems to suggest that the consumer environment that we've seen in the past few quarters, is, you know, exactly the same that we're seeing as we start the new fiscal year.

Thank you. Our next question comes from the line of Brian Morrison with TD Cowen. Your line is now open.

Thanks. The second focus, I think, this morning is dollar city leverage with your sales up 28% and equity income up 22%. But when you look at the disclosure, the Mexico losses, I think you even called there in the call, would the LATAM exposure, growth have been 30% to 35% illustrating leverage, Patrick. Is that correct? And I know there was a pricing structure in Colombia was a positive driver last year that will be lapped. But looking forward, how should we think about leverage drivers at LATAM and what your breakeven store target is for Mexico?

Sure. So it is true when you look at those numbers of top line of 28% and bottom line of 22%, that does include Mexico. And so if you were to exclude Mexico, I think you're correct in saying that bottom line growth is over 30%. You need also to consider that when you look at the top line growth, it includes sales from Mexico this year, and we didn't have those sales, obviously, last year. So you would conclude that the dollar city business, excluding Mexico, is still benefiting from leverage and scale as we move in time. So I do conclude that the business is still growing at a good pace and there is still scaling benefits to come in the future. I believe, before I forget, there was a second part of your question about Mexico. We've provided in our financial statements the loss for 100% of Mexico this year. We've also commented that Mexico, while we're very happy with the progress, is still in ramp-up mode. So we do expect a loss similar, a range similar to last year, so about US $10 to $20 million. After that, hopefully EBITDA losses will shrink, but a little too early, Brian, to have a clear view on when that business will break even.

Thank you. Our next question comes from the line of Chris Lee with Day Jardin. Your line is now open.

All right, good morning. Maybe just a two-part question on Australia. First, I know it's still super early, but for the stores that have been renovated so far, what's been the sales lift, and is it trending in line or better than your expectation?

Yeah, and just to take a step back, so what we're doing when we're converting stores, right, so we talked about renovating the layout of the stores, having the appropriate racking, lighting, flow of shopping as well. It also provides a higher density of product in the stores, which is an important condition when you're selling low-price items and high-volume sales. one would expect a positive uplift. And even if all the products are currently all TRS products, if I could say, we did see a pickup in unit sales. That being said, the real power of the conversion is really when you combine the conversions with a good density of Dolorama SKUs. And we're not there yet. As Neil commented, we're going to start introducing some SKUs in the first part of the second half of the year.

Thank you. Our next question comes from the line of Mark Petrie with CIBC. Your line is now open.

Good morning. Thank you. Neil, you touched on this in your prepared remarks, but obviously the macro picture has gotten significantly murkier in the last month or so. Can you just add some color to what you said already with regards to the impacts that you've seen on your supply chain costing and consumer demand? And, you know, obviously, as you said, the longer this goes on, the higher the risk is to affecting costs more materially. But, you know, what's the sort of over-under on when you would expect this to affect your outlook and guidance?

It's still early days and unfortunately higher energy costs will permeate throughout the supply chain for all retailers and for consumers over the next few months to a year. The duration of the conflict will decide the scale of the effect. Certainly, inbound costs, outbound costs, production costs, raw material costs are all being affected by the increased cost of oil. And that will eventually make its way down the supply chain. Our job as low-cost retailers and value retailers is to ensure that we're price following. and to ensure that we are offering the best value, relative value in the market that we can. But I don't believe that any retailer will escape the reality of global economics. We all hope for the consumer and for the world, I would go so far as saying, that the conflict ends as quickly as possible.

Thank you. Our next question comes from the line of John Zamparo with Scotiabank. Your line is now open.

Thank you. Good morning. Perhaps a follow-up or two on that same topic. I wonder if you can elaborate on the ripple effect you've seen. It would be helpful to get a sense of magnitude on on how impactful you expect this to be. In other words, what the gross margin guide would have been prior to the start of the war. And just to clarify, have you seen any deceleration in same-store sales subsequent to the start of the war?

Yeah, look, I mean, as Neil alluded to, this is early days, right? So we are seeing some increased costs in transportation. We're seeing some costs increase in, you know, even product costs. But You know, if we're under the context of this is short term, all of this is, some of it is included in our guide, right? So if you look at our guide, we're saying 45, 45 and a half, same as last year, recognizing that there might be some incremental costs that we're seeing right now. But very important is, to Neil's point, if this is prolonged and or deepens, Well, there will be potentially over time consequences on gross margins that we may or may not be able to pass on. But generally speaking, we have a resilient business model and we're in a good position to offset some of those costs. So I would say we've included some of what we're seeing in the guide, but obviously if this gets prolonged and gets worse, well, then there might be negative consequences on our gross margins and, frankly, ripple effects throughout the whole industry and the whole economy.

Thank you. Our next question comes from the line of Eddie and Ricard with BMO Capital Markets. Your line is now open.

Thank you, and good morning. Patrick, to circle back on Mexico, if you look at your experience,

in other markets for a dollar city at what level of scale from a store count perspective do you typically reach break-even levels in in a given country thank you yeah you know every I would start out by saying you know we're following a recipe you know in all countries we open so this is arguably the fifth time but there are some nuances right like certainly in this case Mexico is a bigger country so does might take you know bigger investments to start off with and so it's hard to compare with you know with other countries but um just to give you some elements um you know think of you know the pace at which we're ramping up mexico to be you know pretty much in line with the experience that we've had in a country like colombia peru so it gives us will give you a sense of what we're thinking in terms of ramp up and related to that and a little bit to an earlier question you know we're not breakeven we were breakeven last year we don't expect to be EBITDA positive next year so maybe in the following year we might be starting to curb EBITDA losses but this is not bottom line right so you would need incremental time to derive you know a breakeven on the on the net income but like I said A little too early to say. Have a look at the other countries. We'll give you a sense of direction. But every country is slightly different. That's all we could say on that.

Thank you. Our next question comes from the line of Ed Kelly with Wells Fargo. Your line is now open.

Hi. Good morning. Thank you for taking my question. I wanted to dig in on Australia. I've heard you say a couple of things this morning around, sounds like a little bit of a comp headwind. You're going to be doing remodels. There's some transition costs. I'm not sure about the gross margin opportunity, but when you put all this together for a business that, I don't know, maybe it was a small loss. in fiscal 26, does the loss in this business grow to a range of sort of $30 to $40 million in EBIT? I'm just kind of curious if you could help us frame that because it does look like it maybe could matter from an earnings perspective.

Sure. So let's take it piece by piece as we think about the potential impact to fiscal year 27. First point is the business on a standalone basis, so without transformation from Dollarama, you look at last year on a full year basis, was at a loss of 10.6 million Australian dollars. So you need to start from that base. To which, when you look at the three pillars that we've laid out in our investor presentation, there are incremental integration costs. So we talk about 35 to 45 million that you would need to factor in. Then you move to, and I'm moving from third bucket and coming to the first, but the second bucket is a lot about CapEx. So we provide some color in terms of store renovations and new stores. There is a small P&L impact for the period during which we're going to close the source for the renovation. So you would need to factor that, potentially a little bit of DNA. And then the first bucket is really the most uncertain. So this is about transitioning the products. And we talked about all the factors. But this one, as you might appreciate, we barely have a Dalramin product in the country. And so to start guessing the impact of the transition is a little dangerous at this point. But certainly, once we get greater clarity there, we'll be happy to share it with you. But that's how I would think about framing the net income loss for this year.

Thank you. Our next question comes from the line of Mark Carden with UBS. Your line is now open.

Good morning. Thanks for taking the question. So I wanted to touch quickly on the competitive backdrop. Are you guys seeing any shifts in intensity, particularly from some of the mass merchants? And then population growth has also pulled in meaningfully. Any shifts in how you approach unit growth placement going forward and same-store sales, just given the changing dynamics there? Thanks.

No, I think the market in Canada is quite stable. Competition remains stable. There's no real new entrants. to talk about. Overall, I would say it's business as usual in Canada.

Thank you. Our next question comes from the line of Martin Landry with Stifel. Your line is now open.

Hi, good morning. I would like to touch on your same-store sales guidance for fiscal 27. I would like to know a little bit what assumptions you've used in terms of uh traffic and and basket size and also if you can talk a little bit about uh price increases uh you know quantify maybe what you've done in in terms of price increases in 26 and what's implied in your guidance for 27. thank you yeah um you know taking from a high level the three to four percent uh if you recall it's the same guidance as we provided uh last year

And so to an earlier comment, when we think about the economic and demand side, it's a very similar setup than what we have seen last year. The slight nuance perhaps compared to last year is towards the end of fiscal 26, we started seeing some price increases from from the domestic side, which will trickle into fiscal 27. So there's a little bit of an uplift when we think about the beginning of fiscal 27. But other than that, we expect a context that is very similar to this year. So the last year, sorry. I mean, certainly as we start the year, there's a lot happening out there and a lot of unknowns. And so, you know, we think it's prudent to start with the same guide as we've had last year at 3% to 4%.

Thank you. Our next question comes from the line of Zihan Ma with Bernstein. Your line is now open.

Hi. Thank you. I wanted to circle back on the Australia side. I think initially you were kind of saying that it probably takes three to four years in that range to turn profitable in Australia, wondering if that's still the right timeline to think about it. And I'm assuming that probably means you'll have enough time to convert all the merchandising in stores, but probably not remodel all the stores. How should we think about what does it take to turn profitable on the ground? Thank you.

Yeah, thanks for the question. So, you know, consistent with what we said in the past, this is a multi-year transformation, i.e. four years. And what the four years takes into account is think of the conversions being an important part of this transformation. So 400 stores going in an average clip of 100 per year, that takes four years. So for us to say the transformation is complete, we need to make sure that we're well advanced, if not completed on the conversion side. And once these, hopefully what we'll see in four years, is that we'll have our stores converted and a strong assortment of Dollarama SKUs in the stores. And so, yes, we remain consistent with that four-year timeline.

Thank you. Our next question comes from the line of Luke Hannon with Canaccord Genuity. Your line is now open.

Thanks. Good morning, Patrick. You touched on the first bucket as it relates to Australian business transformation. as being the most important and talked about refreshing the assortment through the balance of this year. Just curious to know, how did you target that initial cohort of SKUs that you're looking to swap out and put in your own? Are they concentrated within any particular price point or category as we think about your assortment?

The initial study was on, of course, Dollarama's strongest SKUs. taking into account, of course, the SKUs that are transferable to Australia since they have different compliance rules, different standards in different products, different voltages in their electricity grids, different sizing in their notepads that they follow a UK standard on things in the stationary lines. So barring the exceptions that are different between Canada and Australia, the balance of the items we started with a focus on compliance first and foremost, the items that we were able to do compliance quickly on because the Australian compliance standards are entirely different from Canada's. So an entire compliance study has to be done on every single SKU that goes into the country. The goal is to get all Dollarama SKUs into Australia within the next two years or so. The priority started with our best SKUs and the most transferable SKUs.

Thank you. Our next question comes from the line of Corey Tarlow with Jefferies. Your line is now open.

Great, thanks. Patrick, you made a comment that... around a $10 million loss from Australia, and then I think building to like 35 to $45 million as an investment or starting point. I think that's like 15 to 25 cents. Can you just clarify kind of the glide path on that and on the investments? Just want to double click on that. Thanks so much.

Yeah, sorry. Part of your question I cut off, but yes, you're starting from that $10 million base, just as the business operating as normal. And then you would add on top of that $35 to $45 million of incremental integration cost. And then I also talked about the two other buckets, the impact of the store opening. So there is some incremental P&L impact there, but that's mostly CapEx. And then you would need to factor in something. We're guiding that it will lead to a net loss in sales, so that would have an impact on your bottom line. But you would need to add all those pieces. And so all of that transformation, especially when you think about integration costs, have started as we kicked off the new year and the team is working very hard to transform the business, but also as a necessary condition are also incurring incremental costs.

And I just wanted to add that clearly the dollar on the team feels strongly that in the long term this is a very exciting project and that bringing value to the Australian consumer has merit both for the consumer and for our shareholders. So while this is a four-year project, once you've established a low-cost retail platform in Australia with, by that point, over 500, 600 stores, we feel very confident that being the 800-pound gorilla in the market will play very well for our shareholders.

Thank you. And I'm sure no further questions at this time. This does conclude today's call. Thank you all for your participation. You may now disconnect.