Dollar Tree Beats Q4 Estimates, Shares Drop on Outlook

Dollar Tree Inc. reported stronger-than-expected fourth-quarter fiscal 2025 results on Monday, with adjusted earnings per share of $2.56 topping analyst estimates of $2.53, though shares fell about 3.8 percent in trading as the company issued cautious guidance for the year ahead.

Net sales for the quarter ended January 31 rose 9 percent to $5.45 billion, aligning with Wall Street projections and fueled by a 5 percent increase in comparable-store sales. That growth exceeded the 4.9 percent consensus forecast and marked the company's 20th consecutive year of positive comparable sales, according to Chief Executive Officer Mike Creedon. The performance reflected a 6.3 percent rise in average ticket size, partially offset by a 1.2 percent decline in customer traffic. By category, consumables saw a 3.6 percent comparable-sales gain, while discretionary items grew 6.2 percent, with strength in Christmas, party supplies, paper products, and toys.

Gross margin expanded 150 basis points year over year to 36.4 percent, driven by higher merchandise margins, lower freight costs, a favorable mix shift toward higher-margin discretionary goods, and occupancy leverage. Those gains were tempered...