Dollar Tree’s sales have soared over the past year, thanks in part to higher-income shoppers flocking to the chain, the company said Wednesday.
Net sales rose by 9.4 percent to $4.7 billion in the third quarter compared to the same period last year, while gross profit increased 10.8 percent to $1.7 billion, the company said in its earnings report.
Dollar Tree said that approximately three million more households shopped at its stores during the third quarter compared to last year. It added that around 60 percent of these shoppers were from households earning more than $100,000 per year.
“Today, we serve an increasingly broad spectrum of shoppers, from core value-focused households to middle- and higher-income shoppers who are making deliberate choices about how and where they spend,” chief executive Mike Creedon said on an earnings call on Wednesday, The Wall Street Journal reported.
Newsweek reached out to Dollar Tree for comment via its website outside of regular working hours.
Why It Matters
Dollar Tree’s strong third-quarter performance indicates that more affluent Americans are turning to discount retailers amid ongoing economic pressures and uncertainty.
Changing consumer behavior may influence how retailers position themselves in the future in a shifting economy.
What To Know
The company’s third-quarter results also revealed that same-store net sales—those from shops and digital platforms open for at least a year—rose by 4.2 percent compared to the same period last year.
Year-to-date results through November 2 showed that net sales increased 11 percent to $13.9 billion, while gross profit increased 11.8 percent to $4.9 billion.
The company also updated its full-year sales outlook to between $19.35 billion and $19.45 billion, based on comparable-store net sales growth of 5 to 5.5 percent, the report said.
Creedon said it was not just higher-income households driving the growth.
“Lower-income households are depending on us more than ever. For example, the average spend for lower-income households grew more than twice as fast in the third quarter as the average spend for higher-income households,” he said, according to The Wall Street Journal.
What People Are Saying
Dollar Tree CEO Mike Creedon said on a Wednesday call: “Our multi-price strategy drove strong momentum across our business in the third quarter and helped deliver an all-time record Halloween season. Today’s Dollar Tree is a preferred destination for a wide range of shoppers, whether they rely on us for everyday essentials, appreciate a fast and easy trip, or enjoy the excitement of discovering something unexpected.
“With 85 percent of our assortment priced at two dollar or less, we continue to deliver exceptional value, while our multi-price assortment allows us to offer even more high-quality products and great gift options for the holidays. I’m incredibly proud of our team for delivering such a standout performance this quarter. And as we head into peak holiday season, we’re ready to bring even more value, convenience, and discovery to our growing base of loyal customers.”
Dollar Tree said in its report: “For the fourth quarter fiscal 2025, the Company expects its net sales from continuing operations to be in the range of $5.4 billion to $5.5 billion, based on comparable store net sales growth of 4.0% to 6.0%.”
What Happens Next
Creedon said the company plans to continue targeting higher-income shoppers.
“Over time, our goal is to inspire the same level of loyalty in our newer, higher-income customers that we see in our core customers,” he said. “Many of our higher-income customers are still early in their relationship with Dollar Tree. Their purchase frequency has significant room to grow.”
