Dollar Tree Q1 earnings surge; lifts guidance
Dollar Tree reported a solid first quarter, with sales growth, margin expansion, and earnings ahead of Street expectations as it continues to expand its multi-price strategy.
The discounter, which is celebrating its 40th anniversary this year, opened 113 new stores during the quarter, and converted or added about 630 stores to its multi-price format, ending the quarter with approximately 5,900 multi-price locations. It’s on track to open 400 new stores this year.
Dollar Tree reported first-quarter net income of $347.3 million for the quarter ended May 3, up from $343.4 million in the year ago period. Adjusted earnings per share rose 38% to $1.74, easily beating the analyst estimate of $1.55.
Gross profit margin increased 120 basis points, driven by higher mark-on, lower freight costs and lower shrink. The benefits were partially offset by higher tariff costs and higher markdowns.
Operating income increased 23% to $473.3 million and operating margin expanded 120 basis points. Adjusted operating income increased 22% to $473.3 million.
Revenue increased 7.2% to $4.975 billion, just ahead of analyst estimate of $4.96 billion.
Comparable store net sales increased 3.5%, driven by a 4.5% increase in average ticket, partially offset by a 1.0% decline in traffic.
“We continued advancing our strategic plan — a more relevant assortment, agile cost management, a stronger customer connection, and new store growth coupled with improved store conditions — all driving operating margin expansion and delivering a strong bottom-line performance,” said CEO Mike Creedon. “As we celebrate our 40th anniversary in 2026, we are encouraged by the progress we are seeing across the business and remain focused on making thoughtful investments in our stores, assortment and customer experience – building Dollar Tree to last for decades to come.”
Dollar Tree lifted its full-year earnings outlook to $6.70 to $7.10 per diluted share, up from its previous guidance of $6.50 to $6.90 per diluted share. It confirmed its top-line guidance for the fiscal year, which projects net sales from continuing operations in the range of $20.5 billion to $20.7 billion, based on comparable store net sales growth in the range of 3% to 4%.
The company ended with quarter with more than 9,300 stores across 48 contiguous U.S. states and seven Canadian provinces under the Dollar Tree and Dollar Tree Canada banners.
