Dollar Tree: How high-income customers contributed to Q3 beat

Yahoo Finance Video and Julie Hyman

December 4, 2025

In this video:

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Discount retailer Dollar Tree (DLTR) delivered a third quarter earnings beat while lifting its full-year earnings outlook.

Yahoo Finance Senior Reporter Brooke DiPalma and R5 Capital founder and CEO Scott Mushkin join Market Catalysts to discuss the results.

To watch more expert insights and analysis on the latest market action, check out more Market Catalysts.

Video Transcript

00:00 Speaker A

Still with me is Brooke De Palma and Scott Merkin joining us as well, R5 Capital founder and CEO. Thanks for being here, Scott. Brooke, I want to get you just to give us some of the the takeaways from Dollar Tree first of all and then we’ll get Scott’s take on what we heard.

00:15 Brooke DiPalma

So Dollar Tree did beat on across all key metrics, revenue earning, same source sales growth, yet again, that there was a slight beat on revenue. We came in about 4.7 billion. Also just an earnings, like I said, same source sales group by about 4.2%. Now

00:29 Brooke DiPalma

that same for sales growth was led higher by the average ticket increasing by about 4 and a half%. That was partially offset by just a slight 0.3% decline in foot traffic. But yet again, the higher income consumer continuing to turn to dollar stores. We saw that majority of new customers, 60%, those that made over 100,000 made up the majority of their new customer base. and also lastly, they did raise their full year out profit outlook. and what’s really been helping this dollar store in particular is that multi-price strategy that they introduced

00:53 Brooke DiPalma

a few years ago. They said that that was a key driver of the third quarter.

00:55 Speaker A

Um Scott, uh as a as a wonderful old school analyst, you guys were pounding the pavement, you and your team looking at these stores, right? trying to see what it is that is bringing in customers. So what kind of stood out to you that that made this quarter work for the company?

01:09 Scott Mershkin

Well, I mean one of the things that you know, they brought up is Halloween and so our you know, we do a lot of research but also consulting. So we’re in the field, visiting stores quite a bit. And what we noticed at Dollar Tree about say six months ago was, you know, better store execution especially around holiday. We think they executed uh Halloween well. Uh I think that bodes well for the holiday period coming up for them. Uh so, you know, we like what we’re seeing at a Dollar Tree. I think it’s a self-help situation rather than it’s some kind of macro. Uh you’re really seeing store standards execution improve, very early innings there.

01:36 Scott Mershkin

Um, you’re seeing merchandising multi price point improve, uh fairly low valuation stock, not really in the way of the Amazon, Walmart Buzz saw as we call it. that’s getting a lot of market share. So we like Dollar Tree. It’s our top pick, one of our top picks, and so, you know, stock’s up today, but we continue to buy it.

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