Dollar Tree raises 2025 outlook as Q3 sales and profit rise

Core Insights - Dollar Tree has raised its full-year 2025 outlook following stronger Q3 sales and earnings from continuing operations, excluding discontinued Family Dollar results [1][4] Financial Performance - Q3 net sales increased by 9.4% to $4.7 billion, with same-store net sales up 4.2% supported by a 4.5% increase in average ticket, while customer traffic decreased by 0.3% [1][2] - Gross profit for the quarter was $1.7 billion, reflecting a 10.8% increase year-over-year [1] - The company's gross margin widened by 40 basis points to 35.8%, attributed to improved pricing actions, lower freight expenses, and a favorable sales mix [2] - Operating income grew by 3.8% to $343.3 million, although operating margin slipped by 40 basis points to 7.2% [2] Year-to-Date Performance - Year-to-date as of November 1, 2025, Dollar Tree generated $958.5 million in net cash from operating activities and $88.2 million in free cash flow [3] - For the 39 weeks ended November 1, 2025, net sales rose by 11% to $13.9 billion, with same-store sales increasing by 5.4% [3] Updated Guidance - Dollar Tree anticipates full-year net sales between $19.35 billion and $19.45 billion, with comparable store net sales growth of 5% to 5.5% [4] - The adjusted diluted earnings per share (EPS) forecast has been raised to a range of $5.60 to $5.80 [4] - For Q4, net sales are expected to range between $5.4 billion and $5.5 billion, with comparable store net sales growth of 4% to 6% [4] Strategic Insights - CEO Mike Creedon highlighted that the multi-price strategy drove strong momentum in Q3, contributing to a record Halloween season [5] - With 85% of the product assortment priced at two dollars or less, Dollar Tree continues to deliver exceptional value while offering high-quality products for the holidays [5]