Dollar Tree Raises Fiscal 2025 Outlook Despite Weak Q3 Earnings

Dollar Tree raised its fiscal 2025 outlook after reporting better-than-expected first-quarter earnings. The company's net sales increased 3.8% to $3.2bn, beating estimates of $3.16bn. However, it issued weak third-quarter earnings guidance, citing higher costs and inflationary pressures. Despite this, Dollar Tree's shares rose 4.7% in after-hours trading.

Dollar Tree, Inc. (DLTR) has raised its fiscal 2025 outlook following better-than-expected first-quarter earnings. The company reported net sales of $3.2 billion, a 3.8% increase over the same period last year, exceeding analysts' expectations of $3.16 billion [1]. However, the company issued weak third-quarter earnings guidance, citing higher costs and inflationary pressures. Despite this, Dollar Tree's shares rose 4.7% in after-hours trading.

The company's strong sales growth was driven by a balanced increase in both traffic and ticket, with comparable store sales growing by 6.5% [2]. Dollar Tree also added 2.4 million new customers over the last 12 months, with nearly 66% coming from households earning $100,000 or more [1]. The company achieved a gross margin increase of 20 basis points to 34.4%, mainly due to lower merchandise and freight costs [1].

Dollar Tree's guidance for the full year includes a comparable sales growth of 4% to 6% and an adjusted EPS of $5.32 to $5.72 [1]. The company also expects to complete approximately 5,000 store conversions to its 3.0 format by year-end [1].

Despite the weak third-quarter guidance, analysts remain cautiously optimistic about Dollar Tree's prospects. The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings [2].

References:
[1] https://www.tipranks.com/stocks/dltr/earnings
[2] https://storebrands.com/dollar-tree-sees-double-digit-sales-growth-q2