Shares of discount retailer Dollar Tree, Inc. (Nasdaq: DLTR) surged 13.7% in pre-market trading on Thursday. This follows the company's report of first-quarter results for fiscal year 2026, which surpassed market expectations across key metrics, coupled with the announcement of a strategic partnership with DoorDash, Inc. to introduce on-demand delivery services to its stores nationwide.
Financial results for the quarter ended May 2 show total revenue reached $4.98 billion, a 7.2% increase year-over-year. Comparable store net sales grew by 3.5%, primarily driven by a 4.5% increase in average ticket size, partially offset by a modest 1.0% decline in customer traffic. CEO Mike Creedon stated, "Our first-quarter performance reflects continued progress across the business, underscoring Dollar Tree's position as the destination of choice for value, convenience, and treasure-hunt experiences."
In terms of profitability, adjusted diluted earnings per share were $1.74, a significant 38% increase from $1.26 in the same period last year, and notably higher than the $1.53 analysts had expected according to a FactSet survey. The operating margin expanded by 120 basis points year-over-year, primarily benefiting from improved gross margin and lower freight and shrink costs. The company repurchased 5.95 million shares of common stock during the quarter, valued at $595 million.
Building on the strong first-quarter performance, Dollar Tree raised its full-year fiscal 2026 adjusted EPS guidance to a range of $6.70 to $7.10, up from the previous forecast of $6.50 to $6.90. The company also anticipates second-quarter comparable store sales growth of 2.5% to 3.5%, with adjusted EPS projected between $1.00 and $1.15.
Additionally, Dollar Tree announced a partnership with DoorDash, Inc. on the same day. The collaboration will provide on-demand delivery from over 9,000 stores across 48 states, offering customers access to more than 10,000 items including everyday essentials, party supplies, and seasonal goods. To celebrate the launch, new users placing their first Dollar Tree order via DoorDash can receive $20 off a $25 purchase through June 17. This partnership is viewed as a key strategic move for Dollar Tree to expand its online channels and attract new customer segments.
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