Dollar Tree (DLTR) Q1 2026 earnings summary

Executive summary

• Net sales from continuing operations 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 traffic up 2.5% and average ticket up 2.8%.

• Adjusted diluted EPS from continuing operations was $1.26, up from $1.23 in the prior year, while diluted EPS was $1.47, up 19.5% year-over-year.

• Opened 148 new stores, surpassing 9,000 total locations, and converted approximately 500 stores to the Multi-Price 3.0 format, which outperformed other formats.

• Regulatory approval received for Family Dollar sale, expected to close in Q2 FY2025, with net proceeds estimated at $800 million and $350 million in expected tax benefits.

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

Financial highlights

• Gross profit increased 11.7% to $1.65 billion; gross margin expanded by 20 bps to 35.6%, driven by lower freight, improved mark-on, and lower occupancy costs.

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

• Adjusted net income was $270 million vs. $268 million last year; effective tax rate increased to 25.9% from 24.6%.

• 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 higher mark-on and receipts for expanded assortment.

Outlook and guidance

• FY2025 net sales outlook reiterated at $18.5–$19.1 billion, with 3–5% comparable store sales growth and adjusted EPS guidance of $5.15–$5.65.

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

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

• CapEx for FY2025 projected at $1.2–$1.3 billion, including 400 new store openings.

• Full-year earnings to be negatively impacted by $0.30–$0.35 due to timing of shared service cost reimbursements related to Family Dollar sale.