Dollar Tree, now separated from Family Dollar, topped analyst expectations in the second quarter as comparable sales and earnings rose despite ongoing tariff pressures.
Family Dollar formally separated from Dollar Tree in July.
Income from continuing operations was $155.5. million, or 75 cents per diluted share, versus $142.3 million, or 66 cents per diluted share, in the year-prior quarter. Adjusted for one-time events, income from continuing operations was $159.2 million, or 77 cents per diluted share, versus $145.3 million, or 68 cents per diluted share, in the period a year earlier, the company stated.
A Zacks Investment Research analyst consensus estimate called for earnings per adjusted diluted share of 38 cents and revenue of $4.45 billion.
Comparable sales advanced 6.5% in the quarter year over year, driven by a 3% increase in traffic and a 3.4% increase in average ticket, Dollar Tree reported. Net sales and total revenue were $4.57 billion versus $4.07 billion in the year-before period. Operating income was $231 million versus $215.8 million in the year-previous quarter, while adjusted operating income was $236 million versus $219.8 million.
Dollar Tree now expects its full-year fiscal 2025 net sales from continuing operations to be in the range of $19.3 billion to $19.5 billion, with comp sales growth in the range of 4% to 6% and adjusted diluted EPS from continuing operations in the range of $5.32 to $5.72.
Previous guidance pegged net sales from continuing operations to be in the range of $18.5 billion to $19.1 billion, with comp growth in the range of 3% to 5% and adjusted diluted EPS from continuing operations in the range of $5.15 to $5.65.
In a conference call, executives said that tariff timing and mitigation efforts had softened levy effects in the second quarter, but duties are likely to have more impact in the second half of the year. Dollar Tree did raise some prices in the second quarter. However, the company’s expanded assortment, with a wider range of price points, had helped it balance its actions across the store, they said.
“The strong sales growth, margin outperformance, and market share gains that Dollar Tree delivered in the second quarter against an increasingly challenging economic backdrop reinforce the unique position that Dollar Tree occupies in today’s retail landscape,” said Mike Creedon, Dollar Tree CEO, in announcing the financial results. “With the Family Dollar sale complete, Dollar Tree is now a fully focused business and every ounce of our leadership attention, capital investment and operating resources is now directed toward strengthening the Dollar Tree brand.”
