DLTR · Dollar Tree, Inc.

Dollar Tree's first quarter fiscal 2026 results demonstrated strong operational execution. Net sales grew 7.2% to $5.0 billion, driven by a 3.5% increase in comparable store sales (4.5% higher average ticket partially offset by a 1.0% decline in traffic). Gross margin expanded 120 basis points due to higher mark-on, lower freight costs, and lower shrink, partially offset by higher tariff costs and markdowns. Selling, general and administrative expenses increased 50 basis points to 27.8% of revenue, primarily due to higher marketing, general liability costs, and depreciation, partly offset by lower payroll. Operating income rose 23.2% to $473.3 million, with operating margin expanding 120 basis points to 9.5%. On an adjusted basis, diluted EPS increased 38% to $1.74 from $1.26 in the prior year. The company generated $644 million of cash from operations and $392 million of free cash flow. Dollar Tree repurchased 5.5 million shares for $595 million in Q1, with $1.3 billion remaining under its authorization. Management highlighted continued progress on strategic initiatives including store expansion (113 new stores) and multi-price format conversions (approximately 5,900 multi-price stores at quarter end). For fiscal 2026, the company raised adjusted EPS guidance to a range of $6.70 to $7.10, reflecting confidence in the business momentum. Second quarter guidance calls for net sales of $4.8-$4.9 billion, comparable sales growth of 2.5%-3.5%, and adjusted EPS of $1.00-$1.15.