Rewrites paragraph 1, adds background and details throughout and CFO comments in paragraphs 4-5, updates shares

By Neil J Kanatt

March 16 (Reuters) - Discount retailer Dollar Tree DLTR.O on Monday signaled the company could benefit from favorable tariffs in the near term, even as the discount store joined rival Dollar General in forecasting muted annual sales in the face of tight spending.

Consumer companies are navigating uncertainty around import duties after the U.S. Supreme Court struck down Washington's sweeping earlier levies in February and the United States then began collecting a 10% uniform tariff. Treasury Secretary Scott Bessent has said tariff rates could rise further.

Dollar Tree, which sources a large portion of its imported merchandise from China, said its current inventory was purchased ahead of the Supreme Court ruling, meaning any benefit from lower tariff rates would only materialize after the next quarter.

Chief Financial Officer Stewart Glendinning said the company still remains cautious despite the potential upside from recent tariff changes, citing near-term policy volatility and possible cost increases linked to the conflict in the Middle East.

"I think some of the benefit of the tariff might be offsetting to some of the fuel increases," Glendinning said on a post-earnings call.

Last Thursday, rival Dollar General DG.N forecast soft full-year sales.

Dollar stores are struggling as inflation‑weary consumers rein in spending, while theft, rising wages, and margin‑eroding price competition from retailers such as Walmart WMT.O and Amazon.com AMZN.O weigh on results.

Shares of Dollar Tree, which sells everything from kitchenware to party supplies priced between $3 to $7, rose about 3% in early trading after dropping nearly 13% so far this year. The shares had risen 64% in 2025.

The company said it expects fiscal 2026 net sales from continuing operations to range between $20.5 billion and $20.7 billion, compared with analysts’ estimate of $20.69 billion, according to data compiled by LSEG. It forecast adjusted earnings per share of $6.50 to $6.90, largely in line with expectations of $6.69.

The forecast appears "appropriately conservative", Evercore ISI analyst Michael Montani said.

Dollar Tree has been investing in updated store layouts, improved merchandise assortments and stronger seasonal displays, while expanding its multi‑price‑point strategy.

The strategy "introduces more competition, especially with competitors with bigger pockets,” CFRA analyst Arun Sundaram said.

For the fourth quarter, the company posted sales of $5.45 billion, in line with estimates, while adjusted profit per share of $2.56 beat expectations of $2.52.

(Reporting by Neil J Kanatt in Bengaluru; Editing by Devika Syamnath)

((Neil.JKanatt@thomsonreuters.com))