Americans are shifting to savings: discounter Dollar Tree raises profit outlook

U.S. fixed-price and low-price chain Dollar Tree raised its full-year earnings per share guidance and beat analysts' quarterly expectations. The growth was driven by record sales during the Halloween season and the expansion of its $3-$5 product lineup, which increased the share of higher margin categories. The company's stock was up nearly 4% at the close of trading on Dec. 3.

Dollar Tree reported one of its strongest quarters in years. The company's sales rose 9.4% to $4.7 billion in its fiscal third quarter, which ended Nov. 1, 2025, with adjusted earnings per share of $1.21, up 12%. Analysts' forecasts, according to LSEG, were $4.7 billion and $1.09, respectively, Reuters points out.

Dollar Tree's securities were up nearly 4% at the close of trading on Dec. 3, and they were up another 0.7% at Thursday's premarket. The retailer's shares have soared 50% since the beginning of the year, significantly outperforming the broad market.

The 2025 Halloween season was a record-breaking one for the company, Quartz writes. Comparable sales increased by more than 4%, mainly due to a 4.5% increase in the average check. This is a notable result against the backdrop of weak retail traffic, the publication specifies.

Dollar Tree has expanded its $3, $4 and $5 product offerings while maintaining its $1.25 base price, Quartz points out. This helped sales of higher margin items grow by nearly 5%, and they accounted for more than 50% of total volume.

In updated forecasts for the fourth quarter and 2025, the company gave guidance that could interest investors, GuruFocus analysts said. Dollar Tree revised its expected growth in comparable sales, narrowing the range to 5.0-5.5% versus the previous 4-6%. The revenue forecast has also been clarified - the company now expects $19.35-19.45 billion instead of the previous $19.3-19.5 billion. The company left its full-year guidance for adjusted earnings per share unchanged at $5.60-$5.80.

Dollar Tree's strong results coincided with weakening purchasing activity in the US. Middle-income households are saving and refusing to make unnecessary purchases, which negatively affects large retailers, for example. Dollar Tree, on the other hand, is benefiting both from consumers shifting to cheaper options and demand for smaller, affordable purchases, Quartz elaborates.

"Dollar Tree finds itself in an advantageous position in the current economic climate - more people are looking to maximize value when shopping," eMarketer analyst Zach Stambor told Reuters in a commentary. - Affordable prices come to the fore during the holiday season, and those retailers that can offer them have an advantage in the battle for tight consumer budgets."

At the same time, about 60% of Dollar Tree's new customers are families with incomes over $100,000 a year, said the chain's CEO Michael Creedon Jr. He noted that Dollar Tree stores now attract not only traditional shoppers focused on low prices, but also middle- and upper-income consumers who are increasingly reconsidering their habits in favor of savings, Axios said.

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