Dollar Tree Beats Q4 Estimates and Rallies on $1B Family Dollar Sale

Dollar Tree (NASDAQ:DLTR) shares climbed around 5% intra-day today, after the discount retailer topped fourth-quarter earnings estimates and unveiled a major strategic move to divest its Family Dollar business for $1.01 billion.

For the quarter, Dollar Tree reported adjusted earnings per share of $2.29, surpassing analyst expectations of $2.19. Revenue held steady at $5 billion, matching the year-ago figure. Comparable sales at Dollar Tree stores rose 2%, supported by a 0.7% increase in customer traffic and a 1.3% gain in average ticket size.

The company also announced a definitive agreement to sell Family Dollar to Brigade Capital and Macellum Capital for $1.01 billion, with the deal expected to close within 90 days. Dollar Tree anticipates net proceeds of approximately $804 million from the transaction, which will allow the company to sharpen its focus on the core Dollar Tree brand and unlock additional profitability.

Looking ahead to fiscal 2025, Dollar Tree projects net sales from continuing operations between $18.5 billion and $19.1 billion, and same-store sales growth of 3% to 5%. The company also forecasts adjusted earnings per share of $5.00 to $5.50, slightly below the $5.44 consensus estimate, though investors appeared to view the forward guidance as constructive in light of the company’s renewed focus.