Bargain Hunters Fuel Surge for This Discount Retailer—Here’s Why

Discount retailers are cashing in as inflation-weary shoppers hunt for deals. This underdog chain just joined the party—and the stock's riding high.

No fancy footwork here—just old-school price slashing that's suddenly back in vogue. While Wall Street bets on AI and crypto, Main Street keeps it simple: show me the discounts.

Bonus jab: Meanwhile, hedge funds are still trying to spin 'overpriced avocados' as an asset class.

Key Takeaways

• Dollar Tree posted quarterly earnings that exceeded analysts' estimates and lifted its outlook.
• Shares of the dollar store chain climbed Wednesday following the results.

Dollar Tree just became the latest discount retailer to report a boost from bargain-hunting shoppers.

Shares of the dollar store chain climbed close to 4% Wednesday after the retailer posted earnings that topped estimates and raised its outlook.

Dollar Tree (DLTR) reported adjusted earnings per share of $1.21 on revenue that surged 9.4% year-over-year to $4.75 billion in the third quarter. Both figures exceeded analysts' estimates compiled by Visible Alpha.

CEO Michael Creedon Jr. pointed to the company's strong value proposition and "value-seeking behavior" by consumers for the results, telling investors Dollar Tree's offerings are resonating with shoppers "by helping them meet their needs and desires in the budget-constrained environment," according to a transcript provided by AlphaSense.

Why This Is Significant

The strong results from Dollar Tree and other discount retailers such as TJ Maxx parent TJX and Ross Stores highlight how a focus on value is shaping consumer behavior this holiday season.

Same-store sales jumped 4.2%, and the average shopper spent 4.5% more per ticket. Creedon said 3 million more households shopped at Dollar Tree in the third quarter compared to last year, and that more than half of those incremental shoppers came from higher-income households earning over $100,000 a year.

Looking ahead, Dollar Tree said it now sees full-year adjusted EPS of $5.60 to $5.80, compared to its earlier outlook of $5.32 to $5.72. It narrowed its forecast for sales to $19.35 billion to $19.45 billion from $19.30 billion and $19.50 billion, and same-store sales growth to 5% to 5.5% from 4% to 6%.

With Wednesday's gains, shares of Dollar Tree have added half their value in 2025.

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