What risks could impact DLTR's EPS performance in 2026?

Dollar Tree's (DLTR) EPS performance in 2026 could be impacted by several risks:

1. Macroeconomic Pressures: As a discount retailer, Dollar Tree's performance is sensitive to consumer discretionary spending. Economic headwinds, inflation, and changes in consumer confidence can affect the company's sales and, consequently, its EPS. Any downturn in the economy could lead to reduced EPS if sales volumes decline.
2. Tariff Risks: The company faces potential risks from tariffs, especially given the high percentage of direct imports in the Dollar Tree banner. Tariffs could increase the cost of goods, thereby affecting gross margin and potentially impacting EPS if the company is unable to pass these costs onto consumers.
3. Strategic Decisions: The sale of Family Dollar, although strategic, could have short-term implications for EPS. The classification of Family Dollar as discontinued operations after the sale means that its results will not contribute to DLTR's financials, which could temporarily lower EPS. However, the impact will depend on the performance of the remaining Dollar Tree stores and any cost savings from the sale.
4. FX Headwinds: As a retailer with international operations, Dollar Tree is exposed to foreign exchange rate fluctuations. A strengthening of the US dollar relative to other currencies could negatively impact the company's EPS if a significant portion of its revenue comes from international sales.
5. Cost Management: The company's ability to manage costs, including supply chain disruptions and labor expenses, will be crucial for maintaining EPS. If costs rise faster than price increases or sales growth, it could lead to a decline in EPS.

In summary, while the sale of Family Dollar presents an opportunity for DLTR to focus on long-term growth, the company still faces macroeconomic, tariff-related, and operational risks that could impact its EPS in 2026.