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Dollar Tree's Q3 Revenue & Comps Up: Can It Retain the Momentum?
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Key Takeaways
DLTR Q3 net sales rose 9.4% to $4.75B as multi-price Halloween items delivered outsized profits.
DLTR added 3M new households, with 60% from $100K incomes, while comps rose 4.%%.
DLTR raised FY comp guidance to 5%-5.5% and sees runway as most sales remain under prices of $2.
Dollar Tree, Inc. (DLTR - Free Report) delivered a solid third-quarter fiscal 2025, underscoring the strength of its value-driven model in a cautious consumer environment. Its multi-price strategy, which management positioned as one of the most important evolutions in the brand’s history, was a key driver of this momentum. By broadening price points while remaining anchored in value, the company unlocked stronger seasonal and discretionary performance, particularly during Halloween, which delivered record sales and outsized profitability.
Third-quarter fiscal 2025 net sales improved 9.4% year over year, comparable sales (comps) increased 4.2%, and adjusted earnings per share (EPS) jumped 12% year over year. Comps increase was driven primarily by higher average ticket as shoppers responded positively to the expanding multi-price assortment.
In the fiscal third quarter, the retailer attracted 3 million new households, with approximately 60% of these incremental customers coming from middle- and higher-income consumers seeking value, convenience and discovery. Management believes growing trip frequency among these newer shoppers represents a durable growth lever.
The key question is whether Dollar Tree can sustain this momentum. While overall traffic was slightly negative in the fiscal third quarter, management attributed this largely to temporary operational and broader retail trends, noting improving trends toward quarter-end. To sustain momentum, Dollar Tree is operating under a “one company, one brand” strategy following the divestiture of Family Dollar. The company raised its fiscal 2025 comps outlook to the range of 5–5.5% and updated adjusted EPS guidance to $5.60-$5.80. For the fiscal fourth quarter, comps are expected to increase in the range of 4-6%. Longer-term growth prospects remain compelling, as roughly 85% of current sales still come from items priced at $2 or below, providing a long runway for further multi-price expansion.
Looking ahead, the company expects continued support from seasonal strength, deeper multi-price penetration and disciplined cost control. With its sharpened focus as a pure-play Dollar Tree brand and a value proposition resonating across income cohorts, the company appears well-positioned to retain momentum, even as the broader consumer landscape remains uneven.
The Zacks Rundown for DLTR
DLTR’s shares have rallied 20.3% in the past six months compared with the industry’s growth of 9.9%. DLTR currently carries a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
From a valuation standpoint, DLTR trades at a forward price-to-earnings ratio of 18.25X, below the industry’s average of 31.48X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for DLTR’s current and next fiscal year EPS implies a year-over-year rise of 12.4% and 16.8%, respectively.
Image Source: Zacks Investment Research
Other Stocks to Consider
Some other top-ranked stocks have been discussed below:
The Zacks Consensus Estimate for FIVE’s current fiscal-year sales and earnings implies growth of 22.4% and 24.6%, respectively, from the year-ago figures. FIVE delivered a trailing four-quarter earnings surprise of 62.1%, on average.
Ulta Beauty, Inc. (ULTA - Free Report) operates as a specialty beauty retailer in the United States, Mexico, and Kuwait. At present, Ulta Beauty currently sports a Zacks Rank of 1.
The Zacks Consensus Estimate for ULTA’s current fiscal-year sales and earnings implies growth of 9.5% and 0.9%, respectively, from the year-ago figures. ULTA delivered a trailing four-quarter earnings surprise of 15.7%, on average.
Victoria’s Secret & Co. (VSCO - Free Report) operates as a specialty retailer of women's intimate apparel and other apparel and beauty products worldwide. At present, VSCO flaunts a Zacks Rank of 1.
The Zacks Consensus Estimate for Victoria's Secret’s current fiscal-year sales indicates growth of 4.7%, and the same for earnings suggests a decline of 0.7% from the year-ago figures. VSCO delivered a trailing four-quarter earnings surprise of 55.5%, on average.
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Dollar Tree's Q3 Revenue & Comps Up: Can It Retain the Momentum?
Key Takeaways
Dollar Tree, Inc. (DLTR - Free Report) delivered a solid third-quarter fiscal 2025, underscoring the strength of its value-driven model in a cautious consumer environment. Its multi-price strategy, which management positioned as one of the most important evolutions in the brand’s history, was a key driver of this momentum. By broadening price points while remaining anchored in value, the company unlocked stronger seasonal and discretionary performance, particularly during Halloween, which delivered record sales and outsized profitability.
Third-quarter fiscal 2025 net sales improved 9.4% year over year, comparable sales (comps) increased 4.2%, and adjusted earnings per share (EPS) jumped 12% year over year. Comps increase was driven primarily by higher average ticket as shoppers responded positively to the expanding multi-price assortment.
In the fiscal third quarter, the retailer attracted 3 million new households, with approximately 60% of these incremental customers coming from middle- and higher-income consumers seeking value, convenience and discovery. Management believes growing trip frequency among these newer shoppers represents a durable growth lever.
The key question is whether Dollar Tree can sustain this momentum. While overall traffic was slightly negative in the fiscal third quarter, management attributed this largely to temporary operational and broader retail trends, noting improving trends toward quarter-end. To sustain momentum, Dollar Tree is operating under a “one company, one brand” strategy following the divestiture of Family Dollar. The company raised its fiscal 2025 comps outlook to the range of 5–5.5% and updated adjusted EPS guidance to $5.60-$5.80. For the fiscal fourth quarter, comps are expected to increase in the range of 4-6%. Longer-term growth prospects remain compelling, as roughly 85% of current sales still come from items priced at $2 or below, providing a long runway for further multi-price expansion.
Looking ahead, the company expects continued support from seasonal strength, deeper multi-price penetration and disciplined cost control. With its sharpened focus as a pure-play Dollar Tree brand and a value proposition resonating across income cohorts, the company appears well-positioned to retain momentum, even as the broader consumer landscape remains uneven.
The Zacks Rundown for DLTR
DLTR’s shares have rallied 20.3% in the past six months compared with the industry’s growth of 9.9%. DLTR currently carries a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
From a valuation standpoint, DLTR trades at a forward price-to-earnings ratio of 18.25X, below the industry’s average of 31.48X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for DLTR’s current and next fiscal year EPS implies a year-over-year rise of 12.4% and 16.8%, respectively.
Image Source: Zacks Investment Research
Other Stocks to Consider
Some other top-ranked stocks have been discussed below:
Five Below, Inc. (FIVE - Free Report) operates as a specialty value retailer in the United States. At present, Five Below currently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for FIVE’s current fiscal-year sales and earnings implies growth of 22.4% and 24.6%, respectively, from the year-ago figures. FIVE delivered a trailing four-quarter earnings surprise of 62.1%, on average.
Ulta Beauty, Inc. (ULTA - Free Report) operates as a specialty beauty retailer in the United States, Mexico, and Kuwait. At present, Ulta Beauty currently sports a Zacks Rank of 1.
The Zacks Consensus Estimate for ULTA’s current fiscal-year sales and earnings implies growth of 9.5% and 0.9%, respectively, from the year-ago figures. ULTA delivered a trailing four-quarter earnings surprise of 15.7%, on average.
Victoria’s Secret & Co. (VSCO - Free Report) operates as a specialty retailer of women's intimate apparel and other apparel and beauty products worldwide. At present, VSCO flaunts a Zacks Rank of 1.
The Zacks Consensus Estimate for Victoria's Secret’s current fiscal-year sales indicates growth of 4.7%, and the same for earnings suggests a decline of 0.7% from the year-ago figures. VSCO delivered a trailing four-quarter earnings surprise of 55.5%, on average.