Dollar Tree (DLTR) investor relations material

Executive summary

• Net sales rose 7.2% year-over-year to $5.0 billion in Q1 2026, with comparable sales up 3.5% driven by higher average ticket and improved traffic trends.

• Adjusted EPS grew 38% to $1.74, and diluted EPS from continuing operations was $1.76, up 19.7% year-over-year.

• Operating income increased 23% to $473 million, with margin expanding 120 basis points to 9.5%.

• Opened 113 new stores and converted or added about 630 stores to the multi-price format, ending the quarter with 9,382 stores.

• Returned $595 million to shareholders via share repurchases in Q1, with $1.7 billion returned over the past 12 months.

Financial highlights

• Gross margin expanded 120 basis points to 36.8%, driven by higher merchandise margin, lower shrink, and freight favorability.

• Adjusted operating margin rose 110 basis points to 9.5%, and adjusted operating income increased 22%.

• Free cash flow was $392 million, with net cash from operations at $644 million.

• Inventory declined 9% year-over-year, supporting working capital efficiency and fresher assortments.

• Net sales per selling square foot increased to $242, up from $235 year-over-year.

Outlook and guidance

• FY26 net sales expected between $20.5–$20.7 billion, with comparable sales growth of 3–4%.

• Adjusted diluted EPS guidance raised to $6.70–$7.10, reflecting Q1 strength and lower share count.

• Q2 net sales expected at $4.8–$4.9 billion, with comps up 2.5–3.5% and adjusted EPS of $1.00–$1.15.

• Plans for approximately 400 new store openings and 75 closings in fiscal 2026.

• Guidance assumes higher fuel costs persist and no benefit from potential tariff refunds.