Telsey Advisory Group analyst Joseph Feldman reaffirmed his Outperform rating and $130 price target on Dollar Tree Inc. (NASDAQ:DLTR) after the discount retailer posted stronger-than-expected second-quarter results.
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Earnings were 77 cents per share, including a 20-cent timing benefit from tariffs, beating Feldman’s estimate of 40 cents and the FactSet consensus of 42 cents. Comparable-store sales rose 6.5%, above his 5% forecast and the 5.4% consensus, driven by balanced gains in traffic and ticket growth and strength in both consumables and discretionary items.
Feldman highlighted Dollar Tree’s growing appeal to middle- and upper-income households, noting the company added about 2.4 million new customers in the past year, with two-thirds earning $100,000 or more. Visits from shoppers frequenting stores three or more times a month increased roughly 11%.
He pointed to the company’s expansion of multi-price point products as a way to broaden its customer base while maintaining value, with 85% of revenue still coming from items priced at $2 or less.
Near-Term Challenges for Dollar Tree
Despite strong execution, Feldman flagged near-term challenges, including weaker back-to-school sales, intensifying tariff pressures and lower-than-expected TSA fee income from Family Dollar.
Those headwinds influenced management’s cautious near-term outlook, though full-year guidance was raised. Dollar Tree now projects 2025 earnings of $5.32 to $5.72 per share, above its prior $5.15 to $5.65 range and the $5.52 consensus. Comparable sales guidance was also lifted to 4% to 6% from 3% to 5%.
Feldman cut his third-quarter EPS forecast to $1.10 from $1.36, below the consensus of $1.33, citing tariff timing and TSA fee pressure. However, he raised his 2025 EPS estimate to $5.66 from $5.56 and his 2026 projection to $6.62 from $6.50, citing customer growth, margin improvement, and store conversions. He said these drivers should sustain Dollar Tree’s momentum and reinforce its long-term growth story.
Analyst sentiment on Dollar Tree was mixed following its latest results. JPMorgan’s Matthew Boss reiterated an Overweight rating and lifted his price target from $138 to $140, while Truist Securities’ Scot Ciccarelli maintained a Buy and raised his target from $127 to $129. In contrast, Piper Sandler’s Peter Keith kept a Neutral stance and trimmed his target from $112 to $108.
DLTR Price Action: Dollar Tree shares were trading lower by 2.29% at $99.70 at publication Thursday.
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