Dollar Tree (DLTR) Q3 2026 earnings summary

Executive summary

• Net sales for Q3 2025 rose 9.4% year-over-year to $4.75 billion, with same-store sales up 4.2% driven by higher average ticket and contributions from new and converted stores, despite a slight traffic decline.

• Adjusted diluted EPS from continuing operations was $1.21, up 12%, with strong sales growth and margin expansion in key segments.

• Gross profit increased 10.8% to $1.7 billion, with gross margin expanding 40 basis points to 35.8% due to improved pricing, favorable freight, and sales mix.

• Operating income was $343 million, with a margin of 7.2%, down 40 basis points due to higher SG&A expenses.

• Completed sale of Family Dollar in July 2025, enabling a unified focus on the Dollar Tree brand.

Financial highlights

• Comparable store sales rose 4.2%, driven by a 4.5% increase in average ticket, partially offset by a 0.3% decrease in traffic.

• Gross margin improved to 35.8% (up 40 bps year-over-year), aided by pricing initiatives and favorable sales mix.

• Adjusted operating income grew 4.1% to $345 million; operating margin contracted 30 basis points to 7.3% due to SG&A deleverage.

• Inventory declined 5% year-over-year, while sales increased 9.4% and store count rose 4.5%.

• Free cash flow from continuing operations was $88 million year-to-date; ended Q3 with $595 million in cash and $620 million in commercial paper notes outstanding.

Outlook and guidance

• Q4 2025 outlook: net sales of $5.4–$5.5 billion, comparable store sales growth of 4–6%, and adjusted EPS of $2.40–$2.60.

• Full-year 2025 outlook: net sales of $19.35–$19.45 billion, comparable store sales growth of 5.0–5.5%, and adjusted EPS of $5.60–$5.80.

• Gross margin expansion of 50–60 basis points expected for the year; SG&A deleverage of 120 basis points at the segment level.

• CapEx target of $1.2–$1.3 billion on track; detailed 2026 outlook to be provided next quarter.

• Long-term adjusted EPS growth targeted at 12%–15% CAGR through 2028.