Dollar Tree, Inc. (NASDAQ:DLTR) said on Wednesday evening it has authorized a new $2.5 billion share repurchase program, signaling confidence in its long-term strategy just days after completing the $1 billion sale of its Family Dollar business.
The buyback plan, which matches the company’s previous authorization from September 2021, represents approximately 11.5% of Dollar Tree’s current market capitalization. The retailer had about $450 million remaining under the prior program before launching the new one.
Dollar Tree recently finalized the divestiture of Family Dollar to Brigade Capital Management and Macellum Capital Management for roughly $1.01 billion in cash, streamlining its portfolio amid efforts to improve operational efficiency.
The company has also steadily reduced its share count, with total shares outstanding down 9% over the past four years.
In the first quarter of fiscal 2025, Dollar Tree reported an 11.3% rise in revenue to $4 billion, driven by a 5.4% increase in comparable store sales. Adjusted earnings per share came in at $1.26, exceeding the company’s guidance range of $1.10 to $1.25. Gross margin improved by 20 basis points to 30.3%.
Free cash flow for the quarter stood at $130 million. The company repurchased 5.9 million shares for $437 million during the period and ended the quarter with inventory valued at $2.7 billion, up 10% year-over-year.
For fiscal 2025, Dollar Tree forecasts revenue in the range of $18.5 billion to $19.1 billion and adjusted EPS of $5.15 to $5.65.
Shares of Dollar Tree added over 3.5% on Thursday morning in New York.