Dollar Tree On Wednesday, he said it was gaining market share with high-income consumers and could raise prices for some products to offset President Donald Trump’s tariffs.
Discount retailer CEO Michael Creedon said the company is looking at “value exploration behavior across all income groups.” Dollar Tree has always relied on low-income shoppers, earning around 50% of its business from middle-income consumers, but sustained inflation “has increased demand from high-income customers,” analysts said in a call.
Dollar Tree’s success with high-income shoppers is Walmartinvaded the cohort over a long period of high prices.
Trump’s tariffs on certain products from China, Mexico and Canada, as well as the potential for broader obligations to trading partners around the world, are only added to growing household concerns. Dollar Tree uses tactics such as negotiating with suppliers and moving manufacturing to reduce job impact, but it could also raise prices for some items, Creedon said.
Dollar Tree offers prices higher than the standard $1.25 products at around 2,900 so-called multiprice stores. Certain products cost between $1.50 and $7 at these locations.
Retailers focused on the potential effects of tariffs as they announced their high-income customers and fourth quarter revenue. Dollar Tree also said it would sell its struggling family dollar chain for around $1 billion and to a consortium of private equity investors.
According to Dollar Tree, net sales for the continuing operations (brands of the same name) totaled $5 billion for the quarter, with sales at the same store up 2%. Adjusted earnings per share were $2.11 for that period.
It is unclear how the numbers compare to Wall Street estimates.
For fiscal year 2025, Dollar Tree’s net sales are expected to be between $18.5 billion and $19.1 billion from continuing operations, with the same store having sales of 3% to 5%. It is expected to post adjusted earnings of $5-$5.50 per share per year.
Creedon said the expected hit from the first round of 10% tariffs imposed in China in February would range from $15 million to $20 million a month, but the company eased around 90% of its effectiveness.
This month, an additional 10% job in China and a partially effective 25% taxation in Mexico and Canada will hit the Dollar Tree for an additional $20 million a month, Creedon said. The company is working to offset these obligations, but did not include them in its financial guidance due to confusion as to when tariffs will come into effect.
