Dollar Tree (DLTR) Q4 2026 earnings summary

Executive summary

• Q4 2025 net sales grew 9% year-over-year to $5.45B, with comparable sales up 5% driven by ticket growth and strong seasonal demand.

• Multi-price strategy expanded to 5,300 stores, now 16% of sales, driving higher sales productivity and basket size.

• Household penetration reached a record 102 million, with 6.5 million net new households in Q4, growth broad-based across income cohorts.

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

• Operational improvements led to better store standards, supply chain efficiency, and reduced turnover.

Financial highlights

• Q4 gross margin expanded 150 basis points to 39.1%, driven 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 exceeded $1.1B; $1.6B returned to shareholders via share repurchases, reducing shares outstanding by 8%.

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

• Sales per square foot reached $241 in FY25, maintaining high productivity.

Outlook and guidance

• FY26 net sales expected at $20.5–$20.7B, with 3–4% comparable sales growth and adjusted diluted EPS guidance of $6.50–$6.90.

• Targeting 400 gross new store openings and 75 closings; gross margin expected to be roughly flat.

• SG&A leverage expected to be modest; corporate SG&A targeted at 2% of sales by 2028.

• CapEx for FY26 projected at $1.1–$1.2B; $165M in cash tax benefits expected from NOL utilization.

• Q1 FY26 net sales outlook: $4.9B–$5.0B, with adjusted EPS guidance of $1.45–$1.60.