Discount retailer Dollar Tree (DLTR) , unlike some of its competitors, appears to be resonating well with consumers across the country as they battle inflation and a higher cost of living.
In Dollar Tree’s first-quarter earnings report for 2025, it revealed that its same-store sales increased by 5.4% year-over-year as foot traffic in those stores rose by 2.5% during the quarter, and the average amount of money customers spent per purchase spiked by almost 3%.
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The increase in sales contributed to Dollar Tree, which also owns Family Dollar, generating $384.1 million in operating income, which is 0.6% higher than what it earned during the same quarter last year.
Related: Dollar Tree issues stern warning about its pricing
Despite seeing higher levels of foot traffic in some of its stores, the average number of customer visits for each of its locations decreased by 0.6% year-over-year during the quarter, according to data from Placer.ai.
During an earnings call on June 4, Dollar Tree CEO Mike Creedon said the company is noticing more sales from higher-income shoppers.
“In Q1, we had measurable sales improvement across all income levels, with the most growth coming from our higher-income customers,” said Creedon. “In particular, we saw meaningful traffic increase from customers with household incomes of more than $100,000, demonstrating Dollar Tree’s broad appeal.”
He said that Dollar Tree’s multi-price strategy, which has introduced higher prices in its stores, “really resonates” with higher-income customers.
In 2021, the retail chain started selling items for $1.25 after initially selling all of its products for $1. By 2023, Dollar Tree introduced products priced between $3 and $5 at thousands of stores nationwide. Also, last year, it began selling merchandise priced up to $7.
Dollar Tree remains cautious about a growing threat to its sales.
Image source: Scott Olson/Getty Images
Dollar Tree issues urgent warning
Despite Dollar Tree seeing increased momentum from consumers, it is remaining cautious about a growing threat to its sales: tariffs, which are taxes companies pay to import goods from overseas.
In April, Trump imposed a 10% baseline tariff on all countries and paused reciprocal tariffs. The pause will end in July, and as a result, about 60 countries will see higher tariff rates. This will likely cause U.S. consumers to see hiked prices for everyday goods.
Trump’s tariff policy has changed multiple times and was recently challenged in federal court, which has fueled economic uncertainty.
The threat of tariffs has prompted Dollar Tree to adjust its profit expectations for the rest of 2025. While the company still expected its comparable store sales to grow by 3% to 5% this year, it now predicts that its earnings per share will decline by 45% to 50%.
Related: Kroger announces big store change amid price gouging accusations
“As such, we expect our second-quarter profits to be meaningfully lower than last year in light of higher tariff(s) and other costs, including some costs we absorbed during the 145% window on China tariffs,” said Dollar Tree Chief Financial Officer Stewart Glendinning during the earnings call.
The move from Dollar Tree comes after a recent survey from market research company Numerator revealed 72% of Americans are worried that tariffs will raise prices for everyday goods.
Also, 85% are concerned that tariffs will impact their personal finances, while 83% will adjust their shopping behaviors to prepare for tariffs. This includes delaying purchases, buying fewer imported goods, switching to U.S.-made alternatives, and stocking up on items before price increases from tariffs set in.
Dollar Tree customers may soon see major store changes
Creedon emphasized that Dollar Tree has five levers to pull in order to address higher costs for goods, and some of these tactics will cause customers to see major changes in stores.
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“The five levers we have available to address cost inflation, including tariffs, are negotiating with our suppliers, respecifying products, moving country of origin, dropping noneconomic items, and leveraging our expanded multi-price capabilities,” said Creedon.
He highlighted that the company’s multi-price strategy, which it plans to expand, will benefit customers, despite the higher price tag.
“Multi-price allows us to expand our product assortment to give customers access to a wider variety of items at a wider variety of value-centered price points,” said Creedon. “This way, our offerings remain attractive and relevant under a wide range of macro inflationary and tariff scenarios. And as the success of our 3.0 stores suggests, our customers are responding positively.”
Related: Dollar General suffers major boycott from customers
