Dive Brief:
- Dollar Tree’s fourth quarter net sales increased 9% year over year to $5.45 billion, per a Monday release. The retailer’s same-store net sales increased 5% due to a 6.3% jump in average ticket that was partly offset by a traffic decline of 1.2%.
- The discount chain’s operating income grew 30.2%, and gross profit increased 13.3%. Meanwhile, Dollar Tree swung from a net loss of about $3.7 billion in the same period the year before to a net income of $506.1 million.
- For the full 2025 fiscal year, Dollar Tree’s net sales increased 10.4% to $19.4 billion. The retailer expects full-year 2026 net sales to be between $20.5 billion and $20.7 billion, with store comps growth from 3% to 4%. Dollar Tree plans to open about 400 new stores and close 75.
Dive Insight:
Dollar Tree’s traffic decline was in line with the company’s expectations, CEO Mike Creedon told analysts on a call Monday.
The executive attributed the decline — for the second quarter in a row — to its restickering effort in stores, which he said is now largely complete. The company previously acknowledged that the restickering execution was not ideal and is a near-term cost mitigation strategy separate from its broader multi-price expansion efforts.
“That process was a system-wide reset, new signage, improved price clarity and assortment updates designed to modernize the shopping experience,” Creedon said of the pricing change effort. “Our 2026 outlook reflects an expectation for a more balanced contribution from traffic and ticket. In fact, we saw sequentially improving traffic in Q4 and we're pleased with our quarter to date trend.”
The discount retailer does not have as strong of an assortment in the consumables category compared to its competitor Dollar General, which has resulted in a struggle to pull in customers more, GlobalData Managing Director Neil Saunders said in emailed comments Monday.
“As we noted last quarter, there were signs of lower-income shoppers pulling back on discretionary browsing trips, and the Q4 traffic number suggests this dynamic persisted through the holiday period,” Saunders noted.
Dollar Tree saw gains in households across all income levels, Creedon told analysts during the call. The company’s growing higher-income household customers are driving discretionary spend and skew toward the higher end of its multi-price offerings at Dollar Tree.
