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CHESAPEAKE, VA – Dollar Tree, Inc. has reported its financial results for the fourth quarter of fiscal 2024, emphasizing steady sales growth, increased customer traffic, and a strategic shift following the sale of Family Dollar. Despite ongoing economic challenges and tariff pressures, the discount retailer also shared an optimistic full-year 2025 outlook.
“In the fourth quarter, our team was focused on successfully closing out the year, bringing the strategic review to a favorable conclusion, and setting Dollar Tree on a path to realize its full potential to create long-term value for our associates, customers, and shareholders,” said Mike Creedon, Chief Executive Officer. “We finished 2024 on a high note with strong execution at Dollar Tree as growing customer acceptance of our expanded assortment drove sales momentum. With the sale of Family Dollar set to close later this year, we will be able to fully dedicate ourselves to Dollar Tree’s long-term growth, profitability, and returns on capital.”
Key financial highlights (Q4 2024 vs. Q4 2023)
- Net sales from continuing operations: $5.0 billion (+0.7%)
- Same-store sales growth: +2.0% (0.7% increase in foot traffic, 1.3% increase in average ticket size)
- Gross profit: $1.9 billion (-2.8%), gross margin at 37.6%
- Operating income: $534 million (-26.5%)
- Diluted earnings per share (EPS): $1.86 (-23.8%)
- Adjusted diluted EPS: $2.11 (-15.3%)
For the full year of fiscal 2024, Dollar Tree reported net sales of $17.6 billion (+4.7%) and adjusted diluted EPS from continuing operations of $5.10. The company repurchased 3.3 million shares for $403.6 million, including applicable excise tax.
After conducting a comprehensive review of strategic alternatives, Dollar Tree has entered into a definitive agreement to sell Family Dollar to Brigade and Macellum for approximately $1.007 billion. Subject to regulatory approval and customary closing conditions, the transaction is expected to close within 90 days.
The estimated net proceeds from the sale total $804 million, with an additional $350 million in tax benefits. During the transition, Family Dollar will continue to operate from its current Chesapeake, Virginia, headquarters.
Thorvardur de Shong
Dollar Tree has reported growing market share gains among higher-income shoppers, a trend also observed by major retailers like Walmart. Historically catering to lower and middle-income customers, the company now sees increased demand from wealthier consumers seeking value amid persistent inflation.
Creedon noted that value-seeking behavior has expanded across all income levels, further strengthening Dollar Tree’s competitive position in the discount retail space.
With new U.S. tariffs on imports from China, Mexico, and Canada, Dollar Tree is actively working to mitigate cost pressures through a mix of strategies:
- Negotiations with suppliers to secure better pricing
- Shifts in manufacturing to alternative sources
- Selective price increases on certain products
Dollar Tree’s multi-price format, which includes products priced between $1.50 and $7, has expanded to 2,900 locations. This strategy helps diversify pricing and offset inflationary and tariff-driven cost increases while maintaining strong customer appeal.
Creedon disclosed that the initial impact of the 10% tariffs on Chinese imports in February would have cost the company $15 million to $20 million per month, but 90% of this impact has been mitigated. However, additional tariffs imposed this month—including 25% duties on Mexican and Canadian imports—could cost an extra $20 million monthly. The company closely monitors the evolving trade environment before adjusting its financial guidance.
Fiscal 2025 outlook
For the full fiscal year 2025, Dollar Tree expects:
- Net sales: $18.5 billion - $19.1 billion
- Same-store sales growth: 3% - 5%
- Adjusted diluted EPS: $5.00 - $5.50
The company also outlined its expectations for Q1 2025, projecting:
- Net sales: $4.5 billion - $4.6 billion
- Same-store sales growth: 3% - 5%
- Adjusted diluted EPS: $1.10 - $1.25
Dollar Tree will bear the full cost of shared services related to Family Dollar until the sale closes, negatively impacting earnings by $0.30 to $0.35 per share for the year. However, following the sale’s completion, these costs will be partially offset through a transition services agreement (TSA) with the new Family Dollar owners.
Dollar Tree continues its aggressive store expansion strategy, opening 525 new locations in fiscal 2024, including 300 new multi-price format stores. In Q4, 33 new Dollar Tree stores opened.
The company also has:
- Generated $2.2 billion in operating cash flow
- Repurchased 3.3 million shares worth $403.6 million
- Extended its $1.5 billion revolving credit facility with JPMorgan Chase
As of February 1, 2025, Dollar Tree had $1.3 billion in cash, no outstanding borrowings, and $952 million remaining under its $2.5 billion share repurchase authorization.
