Dollar Tree (DLTR) Q1 2026 earnings summary

Executive summary

• Net sales rose 11.3% year-over-year to $4.64 billion in Q1 FY2025, driven by a 5.4% increase in comparable store sales and new store openings, with higher traffic and average ticket.

• Adjusted diluted EPS from continuing operations was $1.26, up from $1.23 in the prior year, while diluted EPS reached $1.47.

• Opened 148 new stores, surpassing 9,000 total locations, and converted 3,000 stores to the Multi-Price 3.0 format, which outperformed other formats.

• Sale of Family Dollar business for $1.007 billion is on track to close in Q2 FY2025, with net proceeds estimated at $800 million and expected tax benefits of $350 million.

• Over $500 million in share repurchases completed year-to-date; 5.9 million shares repurchased for $436.8 million in Q1.

Financial highlights

• Gross profit increased 11.7% to $1.65 billion; gross margin improved by 20 bps to 35.6%.

• Adjusted operating income rose 1.4% to $388 million; operating margin contracted 90 bps to 8.3% due to higher SG&A.

• Free cash flow from continuing operations was $129.7 million, down from $188.7 million a year ago.

• Inventory increased 10% to $2.7 billion, reflecting assortment expansion and new store openings.

• Sales per square foot for Dollar Tree was $232–$235, maintaining elevated levels.

Outlook and guidance

• FY2025 net sales outlook reiterated at $18.5–$19.1 billion, based on 3–5% comparable store sales growth.

• Adjusted diluted EPS guidance for FY25 is $5.15–$5.65, reflecting share repurchases.

• Q2 adjusted EPS expected to be down 45–50% year-over-year due to tariff and cost headwinds, with profit recovery anticipated in H2.

• Gross margin improvement of 50–75 bps expected for the year; SG&A deleverage of 100–110 bps.

• CapEx for 2025 expected at $1.2B–$1.3B, with 400 new store openings planned.