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Dollar Tree Raises Full-Year Earnings Outlook Following Fiscal First-Quarter Beat

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Dollar Tree Raises Full-Year Earnings Outlook Following Fiscal First-Quarter Beat

Dollar Tree (DLTR) raised its full-year earnings outlook on Thursday after the discount retailer reported fiscal first-quarter results above Wall Street's estimates.

The company now expects adjusted earnings to be in a range of $6.70 to $7.10 per share for fiscal 2026, up from its previous outlook of $6.50 to $6.90. The current consensus on FactSet is for non-GAAP EPS of $6.67.

The stock jumped 9.8% in the most recent premarket activity.

Dollar Tree continues to project net sales from continuing operations at $20.5 billion to $20.7 billion for the ongoing fiscal year and comparable sales to grow by 3% to 4%. The Street is looking for same-store sales growth of 3.3%.

Adjusted EPS for the three months ended May 2 advanced to $1.74 from $1.26 a year earlier and topped the average analyst estimate of $1.53. Overall revenue improved to $4.98 billion from $4.64 billion, ahead of the Street's view for $4.96 billion.

"Our first-quarter results reflect continued progress across the business and demonstrate the strength of Dollar Tree's position," Chief Executive Mike Creedon said in a statement. "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."

Same-store net sales inclined 3.5%, while analysts expected a 3.3% rise at the enterprise level. The metric was buoyed by a 4.5% gain in average ticket.

Traffic declined by 1%, but this represented a sequential improvement from the 120 basis-point decrease in the prior quarter, Truist Securities said in a client note.

If traffic continues to improve sequentially, Dollar Tree shares could "re-rate significantly from current levels," according to Truist Managing Director Scot Ciccarelli.

For the ongoing quarter, the company anticipates adjusted EPS of $1 to $1.15 on net sales of $4.8 billion to $4.9 billion. Analysts are looking for non-GAAP EPS of $0.99. Comparable store net sales are forecast to grow by 2.5% to 3.5%, while the market's current view is for a gain of 2.8%.

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