By Connor Hart

Dollar Tree issued a cautious outlook for the year amid tariff and freight-cost uncertainty, even as demand for discretionary products remains strong.

The discount-store operator on Monday guided for comparable sales--or those from stores and digital channels open for at least a year--to rise 3% to 4% in 2026, a slowdown from the 5.3% gain the company logged last year. Analysts expected a 3.4% increase for the current year, according to FactSet.

The company also forecast adjusted earnings of $6.50 a share to $6.90 a share on sales of $20.5 billion to $20.7 billion, compared with Wall Street models for adjusted earnings of $6.70 a share on sales of $20.66 billion.

"We remain cautious because of the potential for further near-term (tariff) changes, and because of the potential for negative freight and other costs related to the conflict in the Middle East," Chief Financial Officer Stewart Glendinning said on a call with analysts.

The comments echo those of rival Dollar General, which last week called for sales growth to slow this year after winter storms recently hurt sales and as continued uncertainty clouds consumer behavior.

Dollar Tree shares initially ebbed lower in premarket trading. They later reversed course and were recently trading 3.5% higher, at $111.26, extending their 69% gain over the past year.

The outlook came as Dollar Tree said net sales grew 9% in the recent quarter, to $5.45 billion, roughly in line with Wall Street expectations. They would've climbed higher, Chief Executive Mike Creedon said, if not for severe winter storms late in the quarter that temporarily shuttered stores.

Same-store sales rose 5%, slightly ahead of analyst forecasts for a 4.9% gain, driven by a 6.3% increase in average ticket and partially offset by a 1.2% decline in tariff.

Dollar Tree added 6.5 million net new households during the recent quarter, which Creedon said represented a meaningful sequential acceleration. The company outperformed across discretionary and impulse categories, he added, as inflation-weary shoppers flocked to its stores over the holiday season to buy items such as Christmas decorations, party supplies and toys.

"We see discretionary outperformance as an indicator of customer receptivity to expanded value, with shoppers gravitating toward broader assortments and higher-value options," he said.

For the current quarter, Dollar Tree guided for adjusted earnings of $1.45 a share to $1.60 a share on sales of $4.9 billion to $5.0 billion. Analysts forecast adjusted earnings of $1.56 a share on sales of $4.96 billion.

Comparable sales are expected to be up 3% to 4%, compared with analyst views for a 3.6% increase.

For its quarter ended Jan. 31, the company posted a swing to a profit of $506.1 million, or $2.53 a share. That compares with a loss of $3.7 billion, or $17.17 a share, a year earlier. Stripping out one-time items, earnings were $2.56 a share. Analysts had expected adjusted earnings of $2.53 a share.

Write to Connor Hart at connor.hart@wsj.com

(END) Dow Jones Newswires

March 16, 2026 10:20 ET (14:20 GMT)

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