Dollar Tree gained more shoppers in the second quarter, helping the discount retailer post a 7 per cent increase in sales as it expanded its multi-price format.

Net sales for the quarter ended August 1 reached $4.9 billion, while comparable store sales increased 3.7 per cent. The gain was driven by a 3.3 per cent increase in average ticket and a 0.4 per cent rise in customer traffic.

“What continues to set Dollar Tree apart is our ability to deliver value, convenience, and the excitement of discovery all in one shopping trip,” said CEO Mike Creedon.

“Positive traffic trends helped drive strong comparable sales growth, and EPS exceeded the high end of our outlook. Our strategies are unlocking a better assortment in better-run stores, while allowing us to engage customers in more relevant and compelling ways.”

The retailer continued rolling out its multi-price format during the quarter, converting or adding about 710 stores. It ended the period with approximately 6600 multi-price locations and opened 75 new stores.

GlobalData MD Neil Saunders described the results as a “sturdy performance”, noting that customer traffic returned to growth after declining over the previous three quarters.

However, he said much of the sales growth continued to come from higher average spending per visit, supported by the expansion of the retailer’s multi-price assortment.

Although the strategy has raised questions about whether higher-priced products could dilute Dollar Tree’s value proposition, Saunders said about 83 per cent of sales still come from its traditional assortment.

“In the current environment and set against the constraints on the core consumer, we see this level of growth as a win,” he said.

Profitability also improved, with gross margin increasing 850 basis points to 42.9 per cent. The company said tariff refunds contributed 680 basis points of that increase.

Dollar Tree received about $369 million in tariff refunds, plus $14 million in interest. The remaining margin improvement was driven primarily by lower tariff rates, favourable shrink and lower occupancy costs, partly offset by sales mix.

For the first half of the fiscal year, net sales increased 7.1 per cent to $9.9 billion, while comparable store sales rose 3.6 per cent. A 3.9 per cent increase in average ticket offset a 0.3 per cent decline in customer traffic.

The company ended the quarter with 9436 Dollar Tree stores across the US and Canada.

Dollar Tree maintained its full-year outlook, forecasting net sales from continuing operations of $20.5 billion to $20.7 billion and comparable store sales growth of 3 per cent to 4 per cent. It plans to open about 400 stores and close 75.

“While we are proud of the progress we have made, we are even more focused on the opportunities ahead as we continue investing in the customer experience, strengthening the business and driving profitable long-term growth,” Creedon said.

• Further reading: Dollar Tree’s traffic continues to decline despite growing sales.