10-QPeriod: Q2 FY2027

DOLLAR TREE, INC. Quarterly Report for Q2 Ended May 2, 2026

Filed May 28, 2026For Securities:DLTR

Summary

Dollar Tree, Inc. reported a solid first quarter for fiscal year 2026, demonstrating robust top-line growth and improved profitability. Net sales increased by 7.2% to $4.97 billion, driven by a 3.5% increase in comparable store net sales, reflecting strong execution of their multi-price strategy and effective inventory management. The company also benefited from the transition services agreement income related to the recent Family Dollar divestiture. Profitability saw significant improvement, with operating income increasing by 23.2% and the operating income margin expanding by 120 basis points to 9.5%. This margin expansion was primarily attributed to a 120 basis point improvement in gross profit margin, a result of better mark-on from pricing initiatives, lower import freight costs, and reduced shrink, partially offset by higher tariffs. The company also successfully managed its selling, general, and administrative expenses as a percentage of revenue, demonstrating disciplined cost control following the strategic separation of Family Dollar.

Financial Highlights

42 data points
Beta

Revenue

$4.97B

36.8% Gross Margin

Net Income

$347.30M

7.0% Net Margin

EPS (Diluted)

$1.76

Total Assets

$13.82B

Cash & Equivalents

$1.01B

Free Cash Flow

$644.00M

Financial Statements
Beta
Revenue$4.97B
Cost of Revenue$3.14B
Gross Profit$1.83B
SG&A Expenses$1.38B
Operating Income$473.30M
Net Income$347.30M
EPS (Basic)$1.76
EPS (Diluted)$1.76
Shares Outstanding (Basic)196.80M
Shares Outstanding (Diluted)197.40M

Key Highlights

  • 1Net sales grew 7.2% to $4.97 billion, driven by a 3.5% comparable store net sales increase.
  • 2Gross profit increased 10.9% to $1.83 billion, with gross profit margin expanding 120 basis points to 36.8%.
  • 3Operating income surged 23.2% to $473.3 million, with operating income margin improving to 9.5%.
  • 4Income from continuing operations was $347.3 million, or $1.76 per diluted share, a notable increase from $1.47 per diluted share in the prior year.
  • 5The company received approximately $110 million in refunds for previously paid tariffs under the International Emergency Economic Powers Act (IEEPA), providing a significant cash inflow.
  • 6Significant share repurchases were made, with $600.4 million spent on repurchasing approximately 5.55 million shares during the quarter.
  • 7The company initiated a new $500 million term loan to support its financial flexibility.

Frequently Asked Questions

Net sales increased by 7.2% to $4.97 billion primarily due to a 3.5% comparable store net sales increase, driven by a 4.5% rise in average ticket, supported by targeted retail price changes and a higher mix of multi-price penetration. Sales from non-comparable stores also contributed $259.0 million.

Gross profit margin improved by 120 basis points to 36.8%, driven by a 120 basis point decrease in the cost of sales as a percentage of net sales. This improvement was attributed to better mark-on from pricing initiatives, lower import freight costs, and reduced shrink, partially offset by higher tariff costs and markdowns.

The sale of Family Dollar was completed in July 2025. The company recognized $21.1 million in transition services agreement income in the current quarter for services provided to Family Dollar. The results of Family Dollar are presented as discontinued operations in the prior year comparable period.

The company generated $644.0 million in net cash from operating activities. They also entered into a $500 million term loan and had $1.5 billion available under their Five-Year Credit Facility. Long-term borrowings stood at $3.0 billion. They also repurchased $600.4 million of stock during the quarter.