Dollar Tree, Inc. (NASDAQ:DLTR) shares moved higher as the discount retailer’s third quarter earnings beat Wall Street expectations as consumers continue to favor value.
For the quarter ended November 1, adjusted earnings per share (EPS) came in at $1.21, exceeding the consensus estimate of $1.09.
Revenue of approximately $4.7 billion marked a 9.4% increase compared with the same period last year and was in line with analyst forecasts.
Same-store net sales increased 4.2%, driven primarily by a 4.5% rise in average ticket, partially offset by a 0.3% decline in traffic.
Gross profit rose 10.8% to $1.7 billion, with gross margin expanding 40 basis points to 35.8%, supported by pricing initiatives, lower freight costs, and a favorable sales mix.
Dollar Tree repurchased 4.1 million shares during the quarter for $399 million and bought an additional 1.7 million shares for $176 million after quarter-end. The company has $2 billion remaining under its $2.5 billion share repurchase authorization.
“Our multi-price strategy drove strong momentum across our business in the third quarter and helped deliver an all-time record Halloween season,” Dollar Tree CEO Mike Creedon said in a statement.
“As we head into peak holiday season, we’re ready to bring even more value, convenience, and discovery to our growing base of loyal customers.”
Looking ahead, Dollar Tree expects Q4 comparable store net sales growth of 4% to 6% and adjusted EPS from continuing operations of $2.40 to $2.60.
The company also revised its full-year 2025 outlook, projecting comparable store net sales growth of 5.0% to 5.5%, net sales of $19.35 billion to $19.45 billion, and adjusted EPS of $5.60 to $5.80, reflecting updated operating expectations and year-to-date share repurchases.
Jefferies analysts commented on the results, noting that Dollar Tree delivered "better-than-expected Q3 results, with notable beats on EPS and operating metrics despite traffic softness."
The analysts wrote that the company’s execution of its multi-price strategy, margin gains from pricing and freight efficiencies, and strong Halloween seasonal sell-through supported performance.
They added that management also raised full-year EPS guidance "on stronger operating trends and the impact of share repurchases."
Shares of Dollar Tree were up 1.9% at about $111 post-earnings.