Dollar Tree(US:DLTR) ZACKS·2025-12-03 18:50Core Insights - Dollar Tree, Inc. (DLTR) reported strong third-quarter fiscal 2025 results, with both revenue and earnings exceeding expectations and showing year-over-year growth [1][11] Financial Performance - Adjusted earnings per share (EPS) from continuing operations increased by 12% year over year to $1.21, surpassing the Zacks Consensus Estimate of $1.09 [1] - Net sales rose by 9.4% year over year to $4.75 billion, slightly above the Zacks Consensus Estimate of $4.74 billion [2] - Same-store sales (comps) grew by 4.2% year over year, supported by a 4.5% increase in the average ticket despite a 0.3% decline in traffic [2][11] - Gross profit increased by 10.8% year over year to $1.7 billion, with a gross margin expansion of 40 basis points to 35.8% [3] - Selling, general and administrative (SG&A) costs were 29.2% of sales, up 140 basis points from the previous year, primarily due to higher depreciation and payroll expenses [4] - Adjusted operating income rose by 4.1% year over year to $345.3 million, while the operating margin contracted by 30 basis points to 7.3% [5] Financial Health - As of the end of the third quarter, Dollar Tree had cash and cash equivalents of $594.8 million, with no borrowings under its revolvers and $620 million of commercial paper outstanding [6] - Net merchandise inventories were $2.86 billion, reflecting a 7.02% sequential increase [6] - The company had a net long-term debt of $2.43 billion and shareholders' equity of $3.46 billion as of November 1, 2025 [6] Share Repurchase and Business Transactions - In the third quarter, Dollar Tree repurchased 4.1 million shares for $399 million, with an additional 1.7 million shares repurchased for $176 million after the quarter [7] - The company completed the sale of the Family Dollar business for $1.0 billion, with net proceeds totaling approximately $800 million in cash [8] Store Expansion - During the third quarter, Dollar Tree opened 106 new stores and converted nearly 646 stores to the 3.0 multi-price format, bringing the total number of stores to 9,269 [12] Future Guidance - For fiscal 2025, Dollar Tree projects net sales from continuing operations between $19.35 billion and $19.45 billion, with comps growth of 5-5.5% [14] - The adjusted EPS from continuing operations is expected to be in the range of $5.60 to $5.80 [14] - For the fourth quarter, net sales are projected between $5.4 billion and $5.5 billion, with adjusted diluted EPS anticipated to fall within the $2.40 to $2.60 range [15]