Dollar Tree Reports 11.3% Increase in Net Sales for Quarter Ended May 3, 2025

Dollar Tree, Inc. reported a significant increase in financial performance for the 13 weeks ended May 3, 2025, with net sales reaching $4,636.5 million, an 11.3% increase from $4,165.6 million in the same period last year. The company's income from continuing operations also rose to $313.5 million, or $1.47 per diluted share, compared to $267.7 million, or $1.23 per diluted share, in the prior year. The overall net income for the quarter was $343.4 million, up from $300.1 million a year earlier. The gross profit margin improved slightly to 35.6%, reflecting a 20 basis point increase from the previous year, primarily due to lower freight costs and improved mark-on.

In terms of operational changes, Dollar Tree's store count increased to 9,016 locations, up from 8,520 a year prior, with 148 new stores opened during the quarter. The company also converted five Family Dollar stores to Dollar Tree locations. Comparable store net sales increased by 5.4%, driven by a 2.8% rise in average ticket and a 2.5% increase in customer traffic. However, selling, general, and administrative expenses rose by 15.5% to $1,268.6 million, leading to a decrease in operating income margin to 8.3% from 9.2% in the previous year.

Strategically, Dollar Tree is in the process of selling its Family Dollar business to Brigade Capital Management and Macellum Capital Management for $1,007 million, with expected net proceeds of approximately $800 million. This transaction is anticipated to close in the second quarter of fiscal 2025. The results from Family Dollar are classified as discontinued operations in the financial statements, reflecting a net income of $29.9 million for the quarter, down from $32.4 million a year earlier.

The company has also been actively managing its supply chain following the destruction of its distribution center in Marietta, Oklahoma, by a tornado in early 2024. Dollar Tree has pivoted its supply chain to minimize disruption and plans to build a new distribution center in Marietta, expected to be operational by spring 2027. Additionally, the company is investing in technology and supply chain optimization to enhance operational efficiency and improve customer experience.

Looking ahead, Dollar Tree anticipates continued challenges from inflation and tariffs affecting merchandise costs. The company is implementing strategies to mitigate these impacts, including negotiating lower product costs and adjusting its product assortment. Despite these challenges, Dollar Tree remains focused on expanding its store footprint and enhancing its product offerings to drive sales growth.