By Mackenzie Tatananni

Dollar Tree posted an earnings beat and strong results for the fiscal second quarter, but the stock was falling following an underwhelming third-quarter forecast.

Adjusted earnings in the second quarter of 77 cents a share topped the consensus estimate of 42 cents. Total revenue of $4.57 billion handily beat the $4.48 billion Wall Street was expecting.

Net sales grew 6.5% in the quarter, driven by a 3% improvement in traffic improved and 3.4% increase in average ticket size, or average customer spend per transaction.

Dollar Tree hiked its fiscal-year net sales guidance to a range of $19.3 billion to $19.5 billion, up from $18.5 billion to $19.1 billion. The new range is based on comparable-store net sales growth of 4% to 6%, versus earlier calls for 3% to 5%, management said.

The company now expects adjusted earnings of between $5.32 and $5.72 a share, up from $5.15 to $5.65, to reflect the company's current operating outlook as well as year-to-date share repurchases. Dollar Tree noted that it has completed more than $1 billion of stock buybacks this year.

Despite the second-quarter earnings beat, the stock fell 2.1% in premarket trading. Peer Dollar General was down 0.4%, while futures tracking the benchmark S&P 500 index rose 0.5%.

Dollar Tree's third-quarter forecast appeared to dampen investor enthusiasm for an otherwise solid second quarter. The retailer noted that it anticipated third-quarter adjusted earnings similar to year-ago results, as the positive timing impact of around 20 cents from continuing operations would likely reverse in the third quarter.

Dollar Tree reported adjusted earnings of $1.12 a share in the third quarter last year. Analysts are looking for $1.33 a share for the current fiscal third quarter, according to FactSet.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

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September 03, 2025 06:59 ET (10:59 GMT)

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