Groupe Dynamite reported a strong second‑quarter of fiscal 2026, with adjusted diluted earnings per share of C$0.96, exceeding the consensus estimate of C$0.41 by C$0.55 (a 134% beat). The figure represents a 68.7% increase from C$0.57 a year earlier.
Total revenue climbed 29.8% year‑over‑year to C$423.6 million. U.S. sales led the growth, reaching C$271.6 million, up 52.2%, while Canadian revenue slipped 1.9% to C$145.1 million on a slightly smaller store base. The United Kingdom contributed C$6.9 million.
E‑commerce revenue rose 31.5% to C$61.4 million, lifting the online share of total sales from 17.5% to 18.5% on a trailing‑12‑month basis, short of the 25% long‑term target. Brick‑and‑mortar comparable store sales increased 10.3% (12.3% on a constant‑currency basis).
Net earnings surged 77.5% to C$113.4 million, with adjusted net earnings up 68.1% to C$108.9 million. Gross profit grew 40.5% to C$291.6 million, expanding the gross margin to 68.8% – a 520‑basis‑point improvement after excluding a C$9.4 million tariff‑refund claim. Operating income rose 60.5% to C$156.2 million.
Adjusted EBITDA reached C$187.9 million, up 55.9% YoY, and the adjusted EBITDA margin expanded to 44.3%, a gain of 740 basis points. Free cash flow increased to C$109.5 million from C$72.6 million a year earlier.
Selling, general and administrative expenses climbed 21.8% to C$106.8 million, but adjusted SG&A as a percentage of sales fell 210 basis points to 24.6%.
The balance sheet remained solid with net leverage at 0.89 times. Cash stood at C$31.9 million, and the company retained C$312 million of credit capacity, having repaid a C$20 million draw from Q1. The credit agreement was extended to May 2030.
Return on assets improved to 38.9% from 24.1% and ROCE rose to 73.5% from 45%. The company repurchased 993,605 shares under its normal‑course issuer bid at an average price of C$63.50, costing roughly C$63.1 million.
Management announced higher full‑year guidance. Revenue growth is now expected at 25%‑27% (up from 22%‑25%). Brick‑and‑mortar comparable sales guidance was lifted to a 12%‑14% range, with the second‑half implied growth of 9.5%‑13%. Adjusted EBITDA margin guidance was raised to 39.5%‑40.5% (previously 38.25%‑39.5%).
The quarter also saw the opening of seven new stores in the United States and United Kingdom, bringing the total to 96 Garage stores in Canada and 139 in the U.S. Groupe Dynamite aims for 350 stores by the end of fiscal 2028.
