MW Dollar Tree's sales top forecasts as fewer people are shopping - but they're spending more

By Tomi Kilgore

The stock surges toward its best day in four years after the full-year profit outlook was raised

Dollar Tree's stock soars after earnings beat expectations and the full-year profit outlook was raised.

Shares of Dollar Tree saw a nice pop in early Thursday trading, heading toward their best day in years, after the discount retailer beat quarterly profit expectations and raised the full-year outlook, saying lower transport costs helped offset higher tariff costs and increased price markdowns.

And while traffic to the company's $(DLTR)$ stores fell 1% from a year ago, higher markdowns helped drive a 4.5% increase in how much the average shopper spent. Lower traffic but a higher average ticket is a pattern that has continued for three straight quarters, as people feeling the pinch of stubborn inflation shop for bargains.

Still, for the fiscal first-quarter to May 2, the 3.5% rise in comparable net sales, or sales in stores open at least 15 months, topped the average analyst estimate compiled by FactSet of 3.3%, marking the seventh straight beat.

The stock shot up 11.6% in premarket trading, putting it on track for the biggest one-day gain since its 21.9% jump on May 26, 2022. That was also providing a 4.5% lift to the shares of rival Dollar General $(DG)$, which reports earnings on June 2.

Adjusted earnings per share for the quarter climbed 38.1% to $1.74 and beat the FactSet consensus of $1.53. The results were boosted by a 1.2-percentage-point increase in gross margin - a measure of sales profitability.

Total revenue grew 7.2% to $4.98 billion, just above the FactSet consensus of $4.96 billion.

The company expects adjusted EPS for the current quarter of $1 to $1.15, which is above current analyst expectations of 99 cents. For the full year, the company raised its adjusted EPS guidance range to $6.70 to $7.10 from $6.50 to $6.90.

The company continues to expect to open 400 new stores this year and close 75 stores.

Dollar Tree's stock has dropped 22.1% in 2026 through Wednesday, while shares of rival Dollar General have shed 21.4%. In comparison, the State Street Consumer Staples Select Sector SPDR ETF XLP has gained 8.9% this year and the S&P 500 index SPX has advanced 9.9%.

-Tomi Kilgore

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

May 28, 2026 07:38 ET (11:38 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.