Dollar Tree Inc. (NASDAQ:DLTR) shares jumped 11.2% in premarket trading after the discount retailer reported stronger-than-expected first-quarter earnings and increased its full-year profit forecast, as investors welcomed continued margin improvement and resilient consumer demand.
The company posted adjusted earnings per share of $1.74, exceeding analyst expectations of $1.55 by $0.19. Revenue totaled $4.97 billion, in line with Wall Street estimates and up 7.2% from the same period last year.
Comparable store net sales increased 3.5% during the quarter, supported by a 4.5% rise in average ticket size, though customer traffic declined 1.0%.
Dollar Tree lifted its fiscal 2026 adjusted EPS guidance to a range of $6.70 to $7.10. The midpoint of $6.90 came in ahead of analyst forecasts of $6.67.
The retailer maintained its full-year revenue outlook between $20.5 billion and $20.7 billion. The midpoint of $20.6 billion was slightly below the consensus estimate of $20.64 billion.
For the second quarter, Dollar Tree projected adjusted EPS between $1.00 and $1.15, with the midpoint of $1.08 above analyst expectations of $0.99.
“Our first quarter results reflect continued progress across the business and demonstrate the strength of Dollar Tree’s position as the preferred destination for value, convenience, and discovery,” said Mike Creedon, Chief Executive Officer.
Operating income margin expanded by 120 basis points compared with the first quarter of fiscal 2025, reaching $473.3 million.
The company said margin improvement was mainly driven by stronger merchandise mark-on, reduced freight expenses, and lower shrink levels. Those gains were partially offset by increased tariff-related costs and higher markdown activity.
Adjusted operating income rose 22% year-over-year during the quarter.