CHESAPEAKE, Va. — Dollar Tree Inc. reported higher sales and earnings for the second quarter of fiscal 2025, buoyed by same-store sales gains and improved margins as the company pivots to focus exclusively on its namesake banner following the sale of Family Dollar.
Net sales from continuing operations rose 12.3% to $4.6 billion in the quarter ended Aug. 2, with same-store sales climbing 6.5%. The increase reflected a 3% rise in customer traffic and a 3.4% increase in average ticket. Operating income advanced 7% to $231 million, while diluted earnings per share from continuing operations grew 13.6% to $0.75. On an adjusted basis, EPS was $0.77.
“The strong sales growth, margin outperformance, and market share gains that Dollar Tree delivered in the second quarter against an increasingly challenging economic backdrop reinforces the unique position that Dollar Tree occupies in today’s retail landscape,” said Mike Creedon, chief executive officer. “With the Family Dollar sale complete, Dollar Tree is now a fully focused business and every ounce of our leadership attention, capital investment, and operating resources is now directed toward strengthening the Dollar Tree brand.”
Expansion and Format Evolution
The retailer opened 106 new stores during the quarter and converted roughly 585 locations to its “3.0” multi-price format, which broadens assortments beyond the traditional $1.25 price point. Year-to-date, the company has generated $639 million in operating cash flow and $145 million in free cash flow.
Gross profit improved 12.9% to $1.6 billion, with gross margin expanding 20 basis points to 34.4%, aided by pricing initiatives, lower domestic freight costs, and occupancy leverage. These gains were partially offset by tariff-related costs, markdowns, and higher distribution expenses. Selling, general and administrative expenses rose to 29.6% of revenue, reflecting higher store payroll, incentive compensation, and depreciation tied to store improvements.
Share Repurchases and Balance Sheet
Dollar Tree continued its aggressive capital return program, repurchasing 5 million shares for $501 million during the quarter and an additional 0.6 million shares after quarter-end. The board recently replenished the company’s repurchase authorization to $2.5 billion. At quarter’s end, Dollar Tree reported $666 million in cash and cash equivalents, with $300 million in commercial paper outstanding and no borrowings under its revolvers.
Outlook
For the full year, Dollar Tree expects net sales of $19.3 billion to $19.5 billion, with same-store sales growth between 4% and 6%. The company updated its adjusted diluted EPS outlook to a range of $5.32 to $5.72, assuming tariff levels remain steady. Management cautioned that a $0.20 positive timing benefit recognized in the second quarter would reverse in the third, leading to flat year-over-year adjusted EPS in Q3.
With its transition away from Family Dollar complete, Dollar Tree is betting that a sharpened focus on its core brand, paired with store expansion and multi-price flexibility, will position it for sustained growth in a competitive discount retail sector.
