Dollar Tree (DLTR) investor relations material

Executive summary

• Q4 2025 net sales grew 9% year-over-year to $5.45B, with comparable store sales up 5% driven by a 6.3% increase in average ticket and a 1.2% decline in traffic.

• Multi-price strategy expanded to 5,300 stores, now 16% of sales, driving higher sales productivity and basket size; 2,400 conversions/additions and 402 new stores opened in FY25.

• Completed sale of Family Dollar in July 2025, now operating as a focused single-banner enterprise.

• Accelerated household growth, reaching a record 102 million U.S. households, with 6.5 million net new in Q4.

• Improved operational execution, store standards, and supply chain efficiency, with over one-third of stores improving against internal standards.

Financial highlights

• Q4 gross margin expanded 150 basis points to 39.1%, aided by favorable mix, lower freight, and higher merchandise margin.

• Adjusted diluted EPS for Q4 was $2.56, up 21% year-over-year; adjusted operating margin up 20 basis points to 12.8%.

• Free cash flow for FY25 was ~$1.1B; Q4 free cash flow was ~$970M.

• Inventory down 7% year-over-year, supporting working capital efficiency and fresher assortments.

• Returned $1.6B to shareholders via share repurchases, reducing shares outstanding by 8%.

Outlook and guidance

• FY26 net sales expected at $20.5–$20.7B, with 3–4% comparable store sales growth; Q1 FY26 sales guided to $4.9B–$5.0B.

• Adjusted diluted EPS guidance for FY26 is $6.50–$6.90, representing high teens earnings growth.

• Targeting 400 gross new store openings and 75 closings in FY26; CapEx planned at $1.1–$1.2B.

• Gross margin expected to be roughly flat, with improved markdowns offset by higher freight costs.

• Expect to utilize NOL balance for $165M in cash tax benefits.