Dollar Tree (NASDAQ:DLTR) delivered stronger-than-expected sales in its fiscal first quarter as value-driven shoppers turned to its aisles amid ongoing economic pressures and tariff-related concerns. But shares fell over 7% intra-day today on muted outlook.

The company reported an 11.3% increase in net sales to $4.6 billion, topping Wall Street’s forecast of $4.53 billion. Adjusted operating income edged up 1.4% year-over-year to $388 million, buoyed by insurance gains and costs tied to an ongoing strategic review. This translated into adjusted earnings per share of $1.26 for the quarter.

Despite the strong start to the year, the discount retailer flagged that upcoming quarterly profits could face headwinds from tariff-driven volatility. Dollar Tree said it expects to absorb most of the pressure from current tariffs if they remain unchanged throughout the fiscal year.

For fiscal 2025, the company projected net sales between $18.5 billion and $19.1 billion, anchored by comparable store growth of 3% to 5%. For the current quarter, Dollar Tree expects comparable sales to come in near the top end of that range, suggesting continued strong customer engagement even as cost uncertainties persist.