Dollar Tree (NASDAQ:DLTR) delivered better-than-expected sales for its fiscal first quarter as budget-conscious shoppers turned to the discount chain amid ongoing uncertainty tied to tariffs. However, unlike competitor Dollar General (NYSE:DG), the company opted not to revise its full-year revenue forecast upward.

Net sales climbed 11.3% year-over-year to reach $4.6 billion, surpassing Bloomberg’s consensus forecast of $4.53 billion. Adjusted operating income edged up by 1.4% to $388 million, a figure that includes gains from insurance and costs related to the company’s strategic review. Adjusted diluted earnings per share came in at $1.26.

In a statement, CEO Mike Creedon expressed confidence in the company’s positioning during uncertain times:
“History has shown that we have the resilience to emerge stronger from periods of economic uncertainty and in today’s rapidly evolving environment, we see a meaningful opportunity to further elevate the value, convenience, and discovery that our customers depend on Dollar Tree to provide.”

Despite growing concerns over tariffs, particularly if former President Donald Trump’s proposed measures persist, the company said it expects to absorb most of the resulting margin impact, noting it “will be able to mitigate most of the incremental margin pressure.”

For fiscal 2025, Dollar Tree projects net sales from continuing operations to land between $18.5 billion and $19.1 billion, based on same-store sales growth of 3% to 5%. For the current quarter, the company expects comp sales to come in “towards the higher end” of that guidance range.

Still, management cautioned about possible earnings fluctuations:
The company noted that there may be “earnings volatility based on the timing of the various inputs and outputs” impacting results. It added that adjusted EPS from continuing operations could fall by as much as 45% to 50% year-over-year before “re-accelerating in the third and fourth quarters.”

Dollar Tree shares dipped in Wednesday’s premarket session, with investors digesting the contrast between its conservative outlook and Dollar General’s more optimistic forecast earlier this week.

Dollar General had reported both earnings and sales ahead of analyst expectations and raised its full-year forecast, stating it anticipates offsetting a large portion of current tariffs. The company did warn, however, that rising prices linked to those tariffs could weigh on consumer spending.

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