US discount retailer Dollar Tree has swung back to profit in the fourth quarter (Q4) ending 31 January 2026 amid higher sales and improved margins.
For the quarter, the company reported net income of $506.1m, or $2.53 per share, compared with a loss of $3.69bn, or $17.17 per share, a year earlier.
Net sales rose 9% to $5.44bn during the quarter.
Comparable sales, which include stores and digital channels operating for at least a year, increased 5%.
The rise was driven by a 6.3% improvement in average ticket, partly offset by a 1.2% decline in customer traffic.
The results were presented on a continuing operations basis.
The Family Dollar segment was treated as discontinued operations while continuing operations comprised the Dollar Tree segment, along with corporate, support and other activities.
Operating income grew 30.2% to $694.7m.
For the year ended 31 January 2026, Dollar Tree reported net sales of $19.39bn, up 10.4% from the previous year.
The company recorded net income of $1.28bn, compared with a net loss of $3.03bn in the previous year.
The earlier annual loss was largely due to $4.07bn in losses from discontinued operations while the latest year included income of $57.2m from discontinued operations.
Operating income for the year increased 13.1% to $1.65bn.
During fiscal 2025 (FY25), the company opened 402 new Dollar Tree stores.
It also converted or added around 2,400 outlets to the Dollar Tree 3.0 multi-price format, bringing the total number of multi-price stores to 5,300 by year-end.
Dollar Tree CEO Mike Creedon said: “Our strong results this quarter show that Dollar Tree remains America’s retail destination for value, convenience, and discovery – underscored by our 20th consecutive year of positive same-store sales.”
Looking ahead to FY26, the retailer expects net sales from continuing operations to range between $20.5bn and $20.7bn, based on comparable store sales growth of 3% to 4%.
Dollar Tree plans to open around 400 new stores and close approximately 75 locations during the year.
For Q1 FY26, the company expects net sales of $4.9bn to $5bn, with comparable sales growth of 3% to 4% and adjusted diluted earnings per share of $1.45 to $1.60.
