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Dollar Tree, Inc. Reports Results for the First Quarter Fiscal 2025

1. DLTR reported Q1 2025 net sales of $4.6 billion, up 11.3%. 2. The company opened 148 new stores and converted 500 to multi-price format. 3. Operating income rose 0.6%, but margins contracted due to higher costs. 4. Share repurchase program still robust, with $519.7 million remaining. 5. Full-year sales outlook maintained between $18.5 billion and $19.1 billion.

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$96.7206/04 06:49 AM EDTEvent Start
$96.92406/05 01:25 PM EDTLatest Updated
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Why Bullish?

Solid earnings and growth initiatives suggest positive market sentiment for DLTR. Historically, strong sales and store expansion lead to upward price pressure.

How important is it?

The article details strong quarterly performance, strategic growth, and financial outlook impacting investor confidence in DLTR.

Why Long Term?

DLTR's new store openings and structural changes will contribute to the long-term growth strategy. Past performance indicates sustained growth post-investment phases.

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CHESAPEAKE, Va.--(BUSINESS WIRE)--Dollar Tree, Inc. (NASDAQ: DLTR) today reported financial results for its first quarter ended May 3, 2025. “Our strong first quarter performance underscores the progress we’ve made against our strategic priorities and is a clear signal that our customers are responding positively to the changes we are making,” said Mike Creedon, Chief Executive Officer. “History has shown that we have the resilience to emerge stronger from periods of economic uncertainty and in today’s rapidly evolving environment, we see a meaningful opportunity to further elevate the value, convenience, and discovery that our customers depend on Dollar Tree to provide.” Additional Business Highlights Opened 148 new Dollar Tree stores Converted approximately 500 stores to our 3.0 multi-price format Generated $379 million of net cash provided by operating activities from continuing operations and $130 million of free cash flow from continuing operations First Quarter Results Results for the first quarter, ended May 3, 2025, are reported on a continuing operations basis and reflect the Family Dollar segment as discontinued operations. Continuing operations reflect the results of the Dollar Tree segment and corporate, support, and other. Also, unless otherwise noted, all comparisons are to the prior year’s first quarter, ended May 4, 2024, which also have been adjusted to reflect the Family Dollar segment as discontinued operations. Net sales increased 11.3% to $4.6 billion. Same-store net sales increased 5.4%, driven by a 2.5% increase in traffic and a 2.8% increase in average ticket. Gross profit increased 11.7% to $1.6 billion and gross margin expanded 20 basis points to 35.6%. The expansion in gross margin was driven primarily by lower freight, improved mark-on and lower occupancy costs due to sales leverage, partially offset by increased distribution, shrink, and markdown costs. Selling, general and administrative expenses increased 100 basis points to 27.3% of total revenue. The increase was driven primarily by higher depreciation expense from store investments, higher store payroll from wage increases, general liability claims, and utilities costs, partially offset by lower stock compensation, lower temporary labor related to multi-price store conversions, and sales leverage. Operating income increased 0.6% to $384.1 million and operating margin contracted 90 basis points to 8.3%. Adjusted operating income increased 1.4% to $387.8 million and adjusted operating margin contracted 80 basis points to 8.4%. The Company’s effective tax rate was 25.9% compared to 24.6%. Adjusted effective tax rate was 26.1% compared to 24.6%. Income from continuing operations was $313.5 million and diluted earnings per share from continuing operations was $1.47. On an adjusted basis, which does not include non-operating insurance gains or strategic review costs, net income was $269.7 million and diluted EPS was $1.26. The Company repurchased 5.9 million shares for $436.8 million, including applicable excise tax. Subsequent to quarter end, we have purchased an additional 780 thousand shares for $67.5 million. As of May 3, 2025, the Company had approximately $519.7 million remaining under its $2.5 billion share repurchase authorization, $1.0 billion of cash and cash equivalents, no borrowings under our revolvers and no commercial paper outstanding. On May 15, 2025 – subsequent to the end of the first quarter – we leveraged a combination of available cash and our commercial paper program to redeem our $1.0 billion 4.00% Senior Notes. As of June 2, 2025, we had $550 million of commercial paper notes outstanding. Sale of Family Dollar On March 25, 2025, the Company entered into a definitive agreement to sell the Family Dollar business to Brigade and Macellum for a purchase consideration of $1,007.0 million, subject to a number of adjustments, including with respect to working capital and net indebtedness. The closing of the transaction is subject to satisfaction of customary closing conditions, including receipt of US antitrust approval, which has subsequently been granted. Net proceeds are estimated to total approximately $800 million. Additionally, we expect the economic impact of tax benefits from losses on the sale to be approximately $350 million. The deal is expected to close in the second quarter of fiscal 2025. The results of Family Dollar are presented in Dollar Tree Inc.’s financial results as discontinued operations in the Condensed Consolidated Financial Statements for all periods presented and prior periods have been adjusted to conform to the current presentation. Unless otherwise noted, all amounts and disclosures included in this press release reflect only continuing operations. For additional information, please refer to Note 10 in our Quarterly Report on Form 10-Q filed on June 4, 2025. Fiscal 2025 Outlook Our full-year fiscal 2025 outlook is presented on a continuing operations basis, reflecting the operations of our Dollar Tree segment, which includes corporate, support, and other. A quarterly and full-year reclassification of our 2024 results into continuing, discontinued, and consolidated operations was included as supplemental schedules in the company’s fourth quarter fiscal 2024 earnings press release, published on March 26, 2025. Additionally, our outlook assumes that the level of tariffs in place today, June 4, 2025, remains in effect for the balance of the fiscal year. It further assumes that we will be able mitigate most of the incremental margin pressure from higher tariffs and other input costs. The Company continues to expect its full-year fiscal 2025 net sales from continuing operations to be in the range of $18.5 billion to $19.1 billion, based on comparable store net sales growth in the range of 3% to 5%. The company is updating its prior adjusted diluted EPS from continuing operations outlook range to $5.15 to $5.65 to reflect the effect of our year-to-date share repurchases. Additional share repurchases are not included in the updated outlook. Our outlook for adjusted diluted EPS from continuing operations includes SG&A costs associated with shared services that are provided to the Family Dollar business. These costs will be incurred for the entirety of fiscal year 2025. Under a Transition Services Agreement (TSA) that would begin with the anticipated closing of the sale in the second quarter of fiscal 2025, the Family Dollar buyer will reimburse the Company for the cost of providing these services. Because Dollar Tree will bear the full year of the costs to support Family Dollar but only expects to receive offsetting reimbursement income in the second half of the year, the Company’s full-year earnings will be negatively impacted by approximately $0.30 to $0.35, with that impact concentrated in the first two quarters of the fiscal year. Second Quarter 2025 Outlook Given trends to date and our expectations for the balance of the quarter, we believe second quarter comparable net sales growth will be towards the higher end of our full-year outlook range of 3% to 5%. Over the balance of fiscal 2025, the company expects to mitigate the earnings impact of the cost pressures it faces, including higher tariffs. In the near-term, it does expect to see some earnings volatility based on the timing of the various inputs and outputs to the company’s financial results. As such, we expect second quarter adjusted EPS from continuing operations could be down as much as 45 to 50 percent year-over-year before re-accelerating in the third and fourth quarters to meet our full-year earnings outlook. Conference Call Information On Wednesday, June 4, 2025, the Company will host a conference call to discuss its earnings results at 8:00 a.m. Eastern Time. The telephone number for the call is (877) 407-3943 or (201) 689-8855. A recorded version of the call will be available for seven days after the call and may be accessed by dialing (877) 660-6853 or (201) 612-7415. The access code is 13753956. A webcast of the call is also accessible through the Investor Relations portion of the Company’s website. Supplemental financial information for the first quarter is available on the Investor Relations portion of the Company’s website, at https://corporate.dollartree.com/investors. Dollar Tree, a Fortune 200 Company, operated 16,607 stores across 48 states and five Canadian provinces as of May 3, 2025. Stores operate under the brands of Dollar Tree, Family Dollar, and Dollar Tree Canada. To learn more about the Company, visit www.DollarTree.com. Use of Non-GAAP Financial Measures The Company reports its financial results in accordance with accounting principles generally accepted in the United States (“GAAP”). From time-to-time, the Company supplements the reporting of its financial information determined under GAAP with certain non-GAAP financial information. The non-GAAP financial measures we have disclosed include adjusted selling, general and administrative expenses; adjusted selling, general and administrative expense rate; adjusted operating income (loss); adjusted operating income (loss) margin; adjusted income from continuing operations; adjusted diluted earnings per share; and adjusted effective tax rate, in each case with respect to our continuing operations; and free cash flow. Reconciliations of the non-GAAP financial measures to the corresponding amounts prepared in accordance with GAAP appears in the tables under the heading “Reconciliation of Non-GAAP Financial Measures” below. These tables provide additional information regarding the adjusted measures. A WARNING ABOUT FORWARD-LOOKING STATEMENTS: Our press release contains "forward-looking statements" as that term is used in the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they address future events, developments or results and do not relate strictly to historical facts. Any statements contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements include, without limitation, statements preceded by, followed by or including words such as: “believe”, “anticipate”, “expect”, “intend”, “plan”, “view”, “target” or “estimate”, “may”, “will”, “should”, “predict”, “possible”, “potential”, “continue”, “strategy”, and similar expressions. For example, our forward-looking statements include statements relating to our business and financial outlook for fiscal 2025, including without limitation our expectations regarding net sales, comparable store sales and adjusted diluted earnings per share for the second fiscal quarter and full fiscal year 2025, and various factors that are expected to impact our quarterly and annual results of operations for fiscal 2025; the direct and indirect impacts of current and potential tariffs and other trade-related measures and our plans to mitigate those impacts; our plans and expectations regarding our business, including the impact of various initiatives, investments, and reviews on the company’s performance and prospects for long-term growth; and our other plans, objectives, expectations (financial and otherwise) and intentions. Our forward-looking statements also include statements regarding our pending sale of Family Dollar and the related TSA, which sale is subject to closing conditions and a number of adjustments to the purchase price, and which may not be completed in a timely fashion or at all, disrupt our business operations, be more difficult or costly than expected or fail to achieve the anticipated benefits. These statements are subject to risks and uncertainties. For a discussion of the risks, uncertainties and assumptions that could affect our future events, developments or results, you should carefully review the "Risk Factors," "Business" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections in our Annual Report on Form 10-K filed March 26, 2025, our Form 10-Q for the most recently ended fiscal quarter and other filings we make from time to time with the Securities and Exchange Commission. We are not obligated to release publicly any revisions to any forward-looking statements contained in this press release to reflect events or circumstances occurring after the date of this report and you should not expect us to do so. More News From Dollar Tree, Inc.

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