Dollar Tree Stock Rises. Why Wall Street Likes the Chain’s Long-Term Outlook.

The discount retailer projected strong earnings growth over the next three fiscal years. (Dreamstime)

Key Points

• Dollar Tree projects 12% to 15% annual per-share earnings growth from fiscal 2026 to 2028, with high-teens growth in 2026.
• The company will have a webcast at 12:30 ET to talk about how it plans to build a more relevant product assortment.
• Dollar Tree reiterated its full-year net sales guidance of $19.3 billion to $19.5 billion and adjusted earnings of $5.32 to $5.72 per share.

Shares of Dollar Tree rose sharply Wednesday after the discount retailer released an upbeat earnings outlook for the next three years.

In numbers released Wednesday, Dollar Tree forecast 12% to 15% annual per-share earnings growth from fiscal 2026 to 2028, headlined by high-teens growth in 2026.

Shares were up 0.6% in early trading after rising 7.2% to $102.50 in premarket trading. Fellow discount retailer Dollar General rose 1.1%.

The earnings growth would be a significant acceleration from recent years. Earnings per share fell in 2024 from 2023 and are projected to tick up less than 10% at the midpoint of Dollar Tree’s guidance in 2025. Rupesh Parikh, an analyst at Oppenheimer, noted that these targets seem realistic at initial glance.

“Concerns around softening trends have weighed on shares lately and still likely linger in the background,” he wrote in a research note Wednesday. “However, in a low expectation setup even following the rally over the past few days, we believe this update will be well received by investors.”

Parikh rates the stock Perform.

Several factors have hampered the company, including tariff mitigation, the transition to a multi-price model at many stores, lower distribution capacity, and the sale of Family Dollar. These costs will dissipate, clearing the way for stronger results in the years ahead, Dollar Tree said.

The company also reiterated its guidance for the third quarter and fiscal year, issued in September. Full-year net sales will range from $19.3 billion to $19.5 billion, and adjusted earnings will be between $5.32 and $5.72 a share, Dollar Tree estimates.

Third-quarter adjusted earnings will be similar to the year-ago quarter’s adjusted earnings of $1.12 a share. Dollar Tree added that comparable same-store sales are growing at a rate of 3.8% so far this quarter, and that the company has repurchased 2.8 million shares for $271 million quarter-to-date.

“We are excited about this new chapter in Dollar Tree’s history,” said CEO Mike Creedon in a press release. “We are enhancing our value and customer focus as a multi-price, technology-enabled retailer that can compete and win in today’s market. Our ability to offer merchandise at a range of prices frees us to optimize our assortment.”

Dollar Tree’s shares have outperformed this year’s bull market, climbing 28% in 2025 as of the close of trading Tuesday despite the mounting challenges and its reputation as a primarily defensive stock.

The company’s webcast begins at 12:30 p.m. Eastern time. Executives are planning to talk about how the company plans to build a more relevant product assortment, create a “more connected” customer experience in stores, and evolve its supply chain for store growth, among other topics.

Write to Nate Wolf at nate.wolf@barrons.com