Higher prices help Dollar Tree grow sales faster than its top rival

By Tomi Kilgore

Discount retailer's stock rose as quarterly profit and same-store sales beat expectations, and the full-year outlooks were in line with analyst projections

Dollar Tree's stock gains after same-store sales rise above expectations, and faster than the off-price retailer's top rival.

Dollar Tree reported Monday growth in a key sales metric for the latest quarter that topped Wall Street expectations, and was once again faster than that of its top rival.

But there's a caveat. The off-price retailer's (DLTR) fiscal fourth-quarter same-store sales, or sales in stores open at least 15 months, rose because an increase in the value of the average transaction offset a decline in traffic to the stores - while Dollar General (DG) reported increases in both the average ticket and traffic.

Still, Dollar Tree's stock climbed 1.7% in premarket trading, after closing the previous session at a four-month low, as quarterly profit topped expectations and the full-year outlook was in line with analysts' projections. The rally is set to snap a three-day losing streak in which the stock had dropped 8%.

Same-store sales for the quarter to Jan. 31 rose 5% from the same period a year ago, above the average analyst estimate compiled by FactSet for 4.9% growth; average ticket was up 6.3%, despite traffic falling 1.2%. Average ticket can rise when traffic falls because prices have increased, or because customers are buying higher-priced goods.

Last week, Dollar General reported growth of 4.3% in the same sales metric, marking the eighth straight quarter that Dollar Tree's same-store sales growth beat that of its rival.

Dollar Tree's total revenue climbed 9% to $4.45 billion - that also beat Dollar General's growth of 5.9% - but the results came up just shy of the FactSet consensus of $4.46 billion.

Adjusted earnings per share, which excludes nonrecurring items, came in at $2.56, up from $2.11 a year ago and above the FactSet consensus of $2.53.

Looking ahead, expects full fiscal 2026 same-store-sales growth of 3% to 4% and adjusted EPS of $6.50 to $6.90, which compares with analyst expectations of 3.4% for same-store sales and $6.70 for adjusted EPS.

The stock has slumped 12.6% so far in 2026 through Friday, while rival Dollar General shares have eased 0.7%. For the past 12 months, however, Dollar Tree's stock has run up 66.5% and Dollar General shares have risen 66.8%.

-Tomi Kilgore

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

03-16-26 0844ET