Dollar Tree reported first-quarter net sales of $5.0 billion, up 7.2% from a year earlier, as comparable store sales rose 3.5%. The company said the gain came from a 4.5% increase in average ticket, partly offset by a 1.0% decline in traffic.
Operating income climbed 23.2% to $473.3 million, while operating margin expanded 120 basis points. Gross profit margin also widened 120 basis points, helped by higher mark-on, lower freight costs and lower shrink, though tariff costs and markdowns weighed on the result. Selling, general and administrative expenses rose to 27.8% of revenue, up 50 basis points.
Diluted earnings per share from continuing operations increased to $1.76 from the prior-year quarter, up 19.7%. Adjusted diluted EPS rose 38.1% to $1.74. Income from continuing operations reached $347.3 million.
The company repurchased 5.5 million shares for $595 million during the quarter. It ended the period with $1.0 billion in cash and cash equivalents, $1.3 billion remaining under its share repurchase authorization, no commercial paper outstanding and no borrowings under its revolving credit facility.
Dollar Tree opened 113 new stores in the quarter and converted or added about 630 stores to its multi-price format, bringing the total to approximately 5,900. The company finished the quarter with 9,382 stores across its U.S. and Canada banners.
For fiscal 2026, Dollar Tree raised its adjusted EPS outlook to $6.70 to $7.10. It now expects full-year net sales of $20.5 billion to $20.7 billion, based on comparable store sales growth of 3% to 4%, and plans for about 400 new store openings and 75 closings.
For the second quarter, the company forecast net sales of $4.8 billion to $4.9 billion, with comparable store sales growth of 2.5% to 3.5%, and adjusted EPS of $1.00 to $1.15. Following these announcements, the company's shares moved 2.49%, and are now trading at a price of $96.035. For more information, read the company's full 8-K submission here.
