DLTR Plummets 7.6%: Earnings Beat vs. Tariff Jitters Spark Selloff – What’s Next?

Summary
• Dollar Tree (DLTR) plunges 7.62% intraday to $102.86, erasing a $104.28 high and testing $98.0 support
• Q2 results beat estimates with 6.5% same-store sales growth and $0.77 adjusted EPS, but third-quarter guidance dampens optimism
• Options frenzy: 2025-09-12 $95 puts (DLTR20250912P95) see 56.9% price drop and 410x leverage, while $101 calls (DLTR20250912C101) trade at 74.84% price change

Today’s selloff in Dollar Tree reflects a stark disconnect between stellar Q2 performance and a bearish third-quarter outlook. Despite robust sales growth and margin expansion, management’s flat EPS guidance for Q3 and tariff-related headwinds triggered a sharp reversal. The stock’s 7.6% drop highlights investor anxiety over near-term execution risks and macroeconomic pressures.

Tariff Jitters Overshadow Earnings Optimism
Dollar Tree’s 7.6% intraday selloff stems from a critical disconnect between its Q2 results and forward-looking guidance. While the company reported 6.5% same-store sales growth and $0.77 adjusted EPS (beating estimates by 88%), it warned of flat Q3 EPS due to tariff timing impacts reversing. The $0.20 one-time benefit in Q2 will not recur, and management’s inability to fully offset margin pressures from tariffs and input costs has spooked investors. Additionally, the completion of the Family Dollar sale, while strategic, has left the stock vulnerable to short-term volatility as the market recalibrates expectations.

Discount Retailers Diverge: Walmart Rises as DLTR Falls
While Dollar Tree’s shares crater, Walmart (WMT) rose 0.94% on the same day, underscoring divergent investor sentiment in the discount retail sector. Walmart’s resilience reflects its diversified global supply chain and pricing discipline, contrasting with DLTR’s exposure to U.S.-centric tariff risks. The sector’s mixed performance highlights Dollar Tree’s unique vulnerability to margin compression and its lack of a clear tariff mitigation strategy compared to sector leaders.

Bearish Setup: Key Levels and High-Leverage Put Options
• 200-day MA: $84.68 (far below current price), RSI: 41.48 (oversold), MACD Histogram: -0.717 (bearish), Bollinger Bands: $109.61–$117.45 (price near lower band)
• 30D MA: $113.92 (resistance), 200D MA: $84.68 (support), 52W Low: $60.49 (extreme support)

The technicals paint a bearish near-term picture. DLTR is trading below its 30D and 100D MAs, with RSI in oversold territory and MACD signaling momentum decay. The 2025-09-12 $95 put (DLTR20250912P95) stands out with 35.7% implied volatility, 410x leverage, and 56.9% price drop potential. This contract offers aggressive downside exposure with high liquidity (13,823 turnover). For a balanced approach, the 2025-0912 $101 call (DLTR20250912C101) provides 26.32% leverage and 74.84% price change potential, ideal for a short-term bounce trade.

DLTR20250912P95 (Put Option):
• Strike: $95, Expiry: 2025-09-12, IV: 35.7%, Leverage: 410x, Delta: -0.087, Theta: -0.0087, Gamma: 0.026, Turnover: 13,823
• High leverage and moderate delta position this put to capitalize on a 5% downside move (projected price: $97.72), yielding a $2.04 payoff per contract.

DLTR20250912C101 (Call Option):
• Strike: $101, Expiry: 2025-09-12, IV: 43.7%, Leverage: 26.32%, Delta: 0.608, Theta: -0.393, Gamma: 0.0517, Turnover: 69,751
• Strong liquidity and high gamma make this call ideal for a short-term rebound trade. A 5% upside move (projected price: $108.00) would yield a $6.99 payoff.

Action Insight: Aggressive bears should target DLTR20250912P95 for a 5% downside play, while cautious bulls may test the $101 call into a bounce above $104.28.

Backtest Dollar Tree Stock Performance

DLTR at Crossroads: Tariff Risks vs. Resilient Fundamentals
Dollar Tree’s 7.6% selloff underscores the market’s skepticism over its ability to navigate tariff headwinds and maintain Q2 momentum. While the company’s 6.5% same-store sales growth and $1B share repurchases signal long-term strength, near-term execution risks—particularly in Q3—loom large. Investors should monitor the $104.28 intraday high as a critical resistance level and the $98.0 support zone. A break below $98.0 could trigger a test of the 52W low at $60.49. Meanwhile, Walmart’s 0.94% rise highlights the sector’s divergent trajectories. For DLTR, the path forward hinges on management’s ability to mitigate tariff impacts and deliver on its $5.32–$5.72 adjusted EPS guidance. Watch for $98.0 breakdown or Q3 guidance clarity.