Dollar Tree’s Q2 results were delivered against a volatile retail backdrop, with management highlighting the company’s ability to drive same-store sales growth and attract higher-income shoppers. CEO Michael Creedon noted that the expanded assortment and balanced traffic across all customer segments fueled market share gains. Despite these operational positives, ongoing tariff volatility and cost pressures remained top challenges. Management attributed the strong bottom-line performance in part to early mitigation efforts, including supplier negotiations and select pricing actions, which led to higher-than-expected unit growth and favorable customer reaction. Creedon emphasized, “We are pleased with our momentum and our team’s ability to adapt to a rapidly changing landscape.”
Is now the time to buy DLTR? Find out in our full research report (it’s free).
Dollar Tree (DLTR) Q2 CY2025 Highlights:
- Revenue: $4.57 billion vs analyst estimates of $4.48 billion (12.3% year-on-year growth, 2% beat)
- Adjusted EPS: $0.77 vs analyst estimates of $0.41 (87.6% beat)
- Adjusted EBITDA: $385 million vs analyst estimates of $300.2 million (8.4% margin, 28.2% beat)
- The company lifted its revenue guidance for the full year to $19.4 billion at the midpoint from $18.8 billion, a 3.2% increase
- Management raised its full-year Adjusted EPS guidance to $5.52 at the midpoint, a 2.2% increase
- Operating Margin: 4.9%, in line with the same quarter last year
- Same-Store Sales rose 6.5% year on year (0.7% in the same quarter last year)
- Market Capitalization: $19.64 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Dollar Tree’s Q2 Earnings Call
- Michael Lasser (UBS) asked how Dollar Tree is navigating customer pushback on higher prices due to tariff mitigation. CEO Michael Creedon responded that customer traffic and acceptance remain strong, with two-thirds of new customers from higher income brackets.
- Paul Lejuez (Citi) inquired about the drivers of higher average basket size and the balance between discretionary and consumables. Creedon explained that both categories contributed equally, and unit volumes grew despite price increases, indicating customer resilience.
- Edward Kelly (Wells Fargo) questioned the wide range in comparable sales guidance for the back half of the year. CFO Stewart Glendinning highlighted continued consumer volatility and rising general liability claim costs as reasons for the cautious outlook.
- Charles Grom (Gordon Haskett) asked about the evolution of buying decisions and handling of markdowns with the multi-price model. Creedon credited the merchant and sourcing teams’ agility, noting most products remain at or below $2, but the expanded assortment is driving basket growth.
- Peter Keith (Piper Sandler) sought details on the Uber Eats partnership’s rollout and early results. Creedon said the initiative covers about 8,500 stores, is attracting a younger demographic, and has exceeded initial expectations before any formal marketing effort.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will watch (1) the ongoing impact of tariff fluctuations and management’s ability to offset these costs through its mitigation levers, (2) execution on store conversions and new openings, particularly former Party City and Family Dollar sites, and (3) the adoption and financial impact of digital initiatives like Uber Eats. Continued traction with higher-income consumers and successful execution of assortment expansion will also be key indicators for the company’s trajectory.
Dollar Tree currently trades at $96.60, down from $111.36 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).
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