Dollar Tree (DLTR) saw a notable increase in its stock, rising 4% on Wednesday after the discount retailer exceeded Wall Street expectations across several key financial metrics. The company reported revenue growth of 9.4%, totaling $4.75 billion, modestly surpassing analysts’ forecasts of $4.7 billion, according to Bloomberg consensus data.
In addition to impressive revenue figures, Dollar Tree’s adjusted earnings per share reached $1.21, significantly above the anticipated $1.10. The retailer also reported same-store sales growth of 4.2%, slightly exceeding the expected 4%. Moreover, the average ticket price for customers rose by 4.5%, although this was somewhat counterbalanced by a slight decline in customer traffic of 0.3%.
During the earnings call, CEO Michael Creedon highlighted the shifting consumer behavior, noting that many shoppers are increasingly focused on seeking value. He stated, “All consumers are seeking value, marrying that value-seeking behavior with convenience and discovery is the intersection where Dollar Tree thrives.” The retailer has seen substantial growth in its customer base, now encompassing 3 million more households compared to last year. Notably, high-income consumers—those earning over $100,000 annually—comprise a significant portion of these new customers. Additionally, 30% of new clientele hail from middle-income households with incomes ranging from $60,000 to $100,000, while the remaining 10% are from lower-income brackets.
In light of its strong performance, Dollar Tree has also revised its profit outlook for the forthcoming year. The company now anticipates adjusted earnings to be in the range of $5.60 to $5.80, an increase from its previous estimate of $5.32 to $5.72. Looking ahead to the fourth quarter, Dollar Tree expects same-store sales to grow by 4% to 6%, while its full-year projections remain optimistic, forecasting a rise in same-store sales between 5% and 5.5%.
