Dollar Tree reported a strong fourth quarter, returning to profitability as its shift to a multi-price model continues to drive higher basket sizes, though customer traffic declined.
Net sales rose 9% to $5.45 billion for the quarter ended Jan. 31, while comparable sales increased 5%. Growth was driven by a 6.3% rise in average ticket, partially offset by a 1.2% decline in traffic.
CEO Mike Creedon said the traffic dip was largely tied to the retailer’s system-wide “re-stickering” initiative, which involved updated signage, pricing clarity and assortment changes. The process is now nearly complete.
Dollar Tree’s ongoing transition beyond its traditional $1 price point continues to resonate, particularly in the $3–$5 range.
Creedon told analysts that multi-price stores are delivering “meaningfully higher” sales productivity than legacy formats, reinforcing the long-term structural benefits of the model as it scales.
The company added or converted roughly 2,400 stores to the format in fiscal 2025, ending the year with about 5,300 multi-price locations.
Dollar Tree posted net income of $506.1 million, or $2.53 per share, compared to a loss of $3.69 billion, or $17.17 per share, in the prior-year period.
Adjusted earnings per share came in at $2.56, beating analyst estimates of $2.53 and up from $2.11 a year earlier.
Gross profit rose 13.3%, with margin expanding 150 basis points to 39.1%, supported by pricing initiatives and lower freight costs. These gains were partially offset by higher tariffs.
The retailer opened 402 new stores in fiscal 2025 and plans to open approximately 400 more in the current year, with capital expenditures projected between $1.1 billion and $1.2 billion.
Dollar Tree expects fiscal 2026 comparable sales growth of 3% to 4% and adjusted earnings per share in the range of $6.50 to $6.90.
The company completed the $1.01 billion sale of Family Dollar in July 2025 as it sharpens its focus on its core banner.
Dollar Tree now operates more than 9,200 stores and 18 distribution centres across the U.S. and Canada.
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