Dollar Tree saw an 11.3 per cent increase in its net sales to $4.6 billion with a net income of $269.7 million during the first quarter of this year.
The company’s gross profit was $1.6 billion, an 11.7 per cent increase, and its gross margin rose to 35.6 per cent.
The increase in gross margin was attributed to lower freight, improved mark-on and lower occupancy costs due to sales leverage.
Dollar Tree’s operating income increased 0.6 per cent to $384.1 million and its operating margin expanded by 90 basis points to 8.3 per cent.
“In the face of growing economic uncertainty and concern over tariffs, the results from Dollar Tree show great resilience and reflect a consumer that has shopped with some urgency to secure value before anticipated price increases,” said GlobalData MD Neil Saunders.
The company opened 148 new stores and converted around 500 stores to its 3.0 multi-price format.
“Dollar Tree’s strategy of moving more stores to a multi-price format has also been helpful in creating a more rounded offer with a wider appeal,” said Saunders.
“This also underpins some of the gains of more affluent customers and in helping to lift basket sizes and transaction values.
“There will be more gains from this over the balance of the year, and the multi-price model also gives Dollar Tree more scope in mitigating the impact of tariffs,” he said.
Moving forward, Saunders said that a more pressured consumer economy would see core shoppers cutting back on volume due to restricted finances, but that Dollar Tree will be well-positioned to attract new customers looking to avoid price increases.
