Dollar Tree shares jump as discount retailer tops Q1 estimates, ups FY guidance

(Sharecast News) - Dollar Tree shares surged by over a tenth on Thursday after the American discount retailer posted stronger-than-expected first-quarter earnings, raised its full-year profit outlook and pointed to resilient demand from cost-conscious shoppers.

Shares, which had dropped by around 20% over the year-to-date ahead of the release, were up 15.2% at $110.43 shortly after the opening bell.

Dollar Tree, which ended the quarter with nearly 9,400 stores across North America, reported first-quarter net sales of $4.97bn, up 7.2% from a year earlier and slightly ahead of Wall Street expectations.

Comparable-store sales rose 3.5%, helped by a 4.5% increase in average ticket size, even as customer traffic slipped 1%.

Net income inched higher to $347m from $343m a year ago, though adjusted earnings per share of $1.74 topped analysts' estimates of $1.53.

The retailer also lifted its fiscal 2026 adjusted EPS guidance to $6.70-7.10, up from earlier estimates of $6.50-6.90, while maintaining its targets for annual sales of $20.5bn-20.7bn and comparable-sales growth of 3-4%.

Chief Executive Mike Creedon said the results reflected continued momentum in the company's turnaround strategy.

"We continued advancing our strategic plan - a more relevant assortment, agile cost management, a stronger customer connection, and new store growth coupled with improved store conditions - all driving operating margin expansion and delivering a strong bottom-line performance," he said.

The company also announced a new nationwide delivery partnership with DoorDash as it looks to expand digital sales channels.