Dollar Tree ($DLTR) Stock: Q2 2025 Results Highlight Strong Sales and Family Dollar Exit

TLDR

• Q2 2025 net sales rose 12.3% to $4.6 billion.
• EPS came in at $0.75, adjusted EPS at $0.77.
• Same-store sales grew 6.5% with higher traffic and ticket size.
• Completed Family Dollar sale for $1 billion.
• Repurchased $1 billion in shares year-to-date.

Dollar Tree Inc. (NASDAQ: DLTR) closed at $111.35 on September 2, 2025, before slipping 7.09% to $103.45 in pre-market trading.

Dollar Tree, Inc. (DLTR)

The company released its second-quarter earnings for fiscal 2025 on August 2, 2025. Net sales increased 12.3% year-over-year to $4.6 billion, while same-store sales grew 6.5%, supported by a 3.0% rise in customer traffic and a 3.4% increase in average ticket size.

Gross profit expanded 12.9% to $1.6 billion, with gross margin improving by 20 basis points to 34.4%. These gains were driven by favorable pricing initiatives, lower freight and occupancy costs, and mix benefits, partially offset by tariff-related costs and shrink.

Earnings and Margins

Operating income rose 7.0% to $231 million, with operating margin narrowing by 20 basis points to 5.1%. On an adjusted basis, operating income reached $236 million, while adjusted EPS stood at $0.77, slightly above expectations. The adjusted figure included a $0.20 timing benefit from tariffs and inventory mark-on. Reported diluted EPS from continuing operations was $0.75.

Selling, general, and administrative expenses rose 60 basis points to 29.6% of revenue, mainly due to higher payroll, depreciation, and store maintenance costs, offset by lower liability expenses and compensation-related items.

Family Dollar Sale Completed

On July 5, 2025, Dollar Tree finalized the sale of Family Dollar for approximately $1 billion, monetizing $800 million in cash proceeds and realizing an estimated $425 million in tax benefits. With the divestiture complete, management emphasized that all resources and strategic focus are now directed toward strengthening the Dollar Tree brand. Transition service agreements remain in place to support both companies during the post-sale period.

Share Repurchases and Balance Sheet

The company was active with buybacks, repurchasing 5 million shares in the quarter for $501 million and 11 million shares year-to-date for $938 million. Subsequent to quarter-end, another 0.6 million shares were repurchased for $71 million. Dollar Tree had $2.4 billion remaining under its $2.5 billion share repurchase authorization as of August 2.

The company redeemed $1 billion in senior notes during the quarter using cash and its commercial paper program. Dollar Tree ended Q2 with $666 million in cash, $300 million in commercial paper notes, and no revolver borrowings.

Updated Fiscal 2025 Outlook

Management raised its full-year net sales forecast to $19.3–$19.5 billion, driven by comparable store sales growth of 4%–6%. Adjusted EPS is now expected in the range of $5.32 to $5.72, reflecting ongoing share repurchases and operating performance. However, the $0.20 EPS benefit seen in Q2 is expected to reverse in Q3, leading to similar earnings levels compared to the prior year’s third quarter.

Dollar Tree’s strategic transformation and renewed focus on its core retail brand, supported by consistent traffic growth and margin discipline, continue to position the company as a strong competitor in the value retail market.

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