Key Moments:
- DLTR shares dropped by 11% not long after markets opened on Wednesday.
- Q2 2025’s adjusted EPS is projected to fall by 45% to 50% year-over-year.
- Full-year adjusted EPS could reach $5.15 to $5.65, an improvement from previous forecasts.
Q1 Performance Surpasses Expectations, Q2 EPS Forecasts Weighs on Stock
Dollar Tree Inc. (NASDAQ: DLTR) reported stronger-than-expected first-quarter results, outperforming Wall Street’s forecasts on both profit and revenue. Adjusted earnings per share came in at $1.26, ahead of the $1.20 consensus estimate compiled by LSEG. Unadjusted, the company posted an EPS of $1.61 and a net income of $343.4 million. Revenue for the quarter totaled $4.64 billion, resulting in yet another figure falling above analysts’ expectations. However, it did mark a 39.2% decline from last year’s revenue.
Despite the strong start to the year, the company warned of a steep earnings drop in the second quarter. The pessimistic outlook was attributed to cost pressures tied to the ongoing tariff conflict between the US and a number of its major trade partners. It also caused the DLTR stock price to plummet by 11% during the trading session that commenced on Wednesday.
EPS May Drop by up to 50% in Q2
Dollar Tree said it expects adjusted earnings per share from continuing operations, excluding the Family Dollar business, to plunge by 45% to 50% YOY during the second quarter. In contrast, analysts were anticipating a substantially smaller decline of 4.6%.
It should be noted, however, that the company expects its performance to recover in the second half of the fiscal year, with a reacceleration of earnings being projected to begin in Q3. For fiscal 2025, Dollar Tree now expects adjusted EPS in the range of $5.15 to $5.65, up from its previous guidance of $5.00 to $5.50. This includes a $0.30 to $0.35 impact related to the sale of its Family Dollar brand. Full-year net sales, meanwhile, should expand to $18.5 billion or $19.1 billion, according to the company’s current estimates.
Dollar Tree emphasized that its assumptions were based on existing tariff levels as of June 4th, 2025, and its belief that most incremental margin pressures will be offset through the remainder of the year.
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