Connor Hart

Wed, Jun 4, 2025, 6:26 AM3 min read

Dollar Tree remains optimistic about its long-term prospects, but tariffs will pressure the discount-retail chain in the near term.

“We expect our second-quarter profits to be meaningfully lower than last year in light of higher tariffs and other costs,” Chief Financial Officer Stewart Glendinning said Wednesday on a call with analysts.

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The company incurred about $70 million in additional costs during the period in which the Trump administration placed a 145% tariff on Chinese goods. These costs will run through the business during the current quarter, Glendinning said, adding that mitigation efforts will materialize in the business later in the year.

As a result, Dollar Tree guided for adjusted per-share earnings from continuing operations to fall by up to 50% year over year in its fiscal second quarter, before accelerating in the back-half of the year.

The stock fell 8.4%, to $88.62, on Wednesday. Through Wednesday’s close, shares have lost about 26% of their value in the past year, despite having gained 33% in the past three months.

Dollar Tree is managing cost inflation in part by negotiating with suppliers and moving the country of origin for certain products. With these actions, the company offset about 90% of the first round of tariffs, Chief Executive Mike Creedon said. It is currently working through addressing the latest round.

The company notched higher profit and revenue in the recent quarter, as new customers and increasing trip frequency drove market share gains. It continues to attract customers from other retail channels, particularly higher-income shoppers, Creedon said.

“Dollar Tree is resonating with its customers in the current environment,” he said. “Our low prices and smaller pack sizes are perfect for families trying to manage a tight household budget, and our expanded assortment is attractive to all customers across every income level.”

Other discount retailers have experienced a similar boost. Dollar General on Tuesday reported strong sales in its latest quarter, raising its outlook for the year as the company said it stands to benefit from tariff-related price increases that could pressure consumer spending.

For its three months ended May 3, Dollar Tree posted a profit of $343.4 million, or $1.61 a share, up from $300.1 million, or $1.38 a share, a year earlier.