Dollar Tree, Inc. (NASDAQ:DLTR) shares rose almost 4% in early trade on Monday after the discount retailer reported fourth quarter earnings that topped profit expectations, even as revenue narrowly missed estimates and the company issued cautious guidance for fiscal 2026.
For the quarter ended January 31, the company reported adjusted earnings per share of $2.56, slightly above analysts’ expectations of $2.53.
Revenue totaled $5.45 billion, just below the $5.46 billion analysts had projected, but still represented a 9% increase from the same period a year earlier.
Comparable store sales in the fourth quarter rose 5%, marking the company’s 20th consecutive year of positive same-store sales growth.
Dollar Tree CEO Mike Creedon said the results reflect continued demand for value-focused retail. “Our strong results this quarter show that Dollar Tree remains America’s retail destination for value, convenience, and discovery,” he said in a statement.
For the full fiscal year 2025, Dollar Tree reported net sales growth of 10% and comparable store sales growth of 5.3%. Diluted earnings per share from continuing operations reached $5.94, while adjusted diluted EPS rose 13% to $5.75.
The company also returned $1.55 billion to shareholders through share repurchases during the fiscal year and has bought back about $193 million in stock so far this quarter.
However, the retailer’s forward outlook was more subdued. Dollar Tree said it expects fiscal 2026 net sales from continuing operations to range between $20.5 billion and $20.7 billion. That compares with an analyst consensus estimate of about $20.69 billion.
The company forecast adjusted earnings per share of $6.50 to $6.90, roughly in line with expectations of $6.69.
Dollar Tree also said it plans to open approximately 400 new stores in fiscal 2026 while closing about 75 locations.
For the first quarter of fiscal 2026, the company expects net sales between $4.9 billion and $5 billion, with comparable store sales growth of 3% to 4%. Adjusted earnings per share for the quarter are projected to range from $1.45 to $1.60.
Analysts from Jefferies noted that Dollar Tree’s results largely met expectations. They highlighted that same-store sales growth of 5% was driven by strong ticket increases, even as traffic declined slightly.
Gross margins expanded due to pricing, product mix, and freight efficiencies, though operating margins for the Dollar Tree segment dipped modestly.
Overall, enterprise margins and earnings per share came in roughly in line with Street expectations.
Looking ahead, Jefferies said the company’s fiscal 2026 guidance is broadly consistent with analyst estimates, reflecting steady but moderate growth.