Is Dollar Tree Poised to Beat on Q1 Earnings Amid Tariff Headwinds?

Dollar Tree, Inc. DLTR is likely to register a decline in its top line when it reports first-quarter fiscal 2026 results on May 28, before market open. The Zacks Consensus Estimate for revenues is pegged at $4.97 billion, indicating growth of 7.2% from the prior-year quarter’s reported figure.The consensus estimate for earnings is pegged at $1.55 per share, suggesting an increase of 23% from the year-ago period’s reported figure. The consensus mark has been unchanged in the past 30 days.DLTR has a trailing four-quarter earnings surprise of 30.2%, on average. In the last reported quarter, the Chesapeake, VA-based company’s earnings surpassed the Zacks Consensus Estimate by 1.2%.Dollar Tree, Inc. Price and EPS Surprise  Dollar Tree, Inc. price-eps-surprise | Dollar Tree, Inc. QuoteTrends to Watch Before Dollar Tree’s Q1 ReleaseDLTR’s fiscal first-quarter performance is expected to have benefited from growth across categories and market share gains. Dollar Tree’s progress on optimizing its store portfolio through store openings, renovations, re-banners and closings appears encouraging. Such factors have been driving the company's comps for a while now.The company is expected to have witnessed a strong performance, driven by sales growth across categories and market share gains. Dollar Tree has made significant progress over the years in optimizing its store portfolio through store openings, renovations, re-banners and closings. The expanded multi-price assortment, continued strength from higher-income customers, and a healthy balance between traffic and ticket continue to support comps growth.Strong performance from store conversions, openings, improved distribution center flow and the early traction of the Uber Eats partnership should have provided incremental support to first-quarter fiscal 2026 revenues.For the first quarter of fiscal 2026, the company projects net sales from continuing operations between $4.9 billion and $5 billion, supported by expected comparable-store sales growth of 3-4%. Adjusted EPS is anticipated to be $1.45-$1.60.Our model projects sales growth of 7.1% year over year and adjusted EPS of $1.55 for the first-quarter fiscal 2026.However, Dollar Tree’s first-quarter fiscal 2026 results are expected to reflect the environment of uncertainty that management emphasized on the latest earnings call. Despite strong discretionary and consumable spending, management has taken a cautious stance, given the volatile macroeconomic backdrop and rising financial pressures on lower-income consumers, who continue to face elevated living costs across categories.Dollar Tree has been witnessing pressure on SG&A expenses in recent quarters due to higher operating costs and strategic business investments. Another major factor weighing on the company’s performance is likely to have been the timing of tariff impacts. Tariff-related pressures have been leading to higher costs and remain concerning. On the margin front, our model predicts the gross margin to contract 20 bps to 35.4% in the fiscal first quarter. Benefits from improved markdowns and merchandising execution are likely to have been offset by tariffs and higher freight costs. Dollar Tree’s Zacks Model FindingsOur proven model conclusively predicts an earnings beat for Dollar Tree this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is exactly the case here. You can uncover the best stocks before they are reported with our Earnings ESP Filter.Dollar Tree currently has an Earnings ESP of 0.00% and a Zacks Rank of 3.DLTR’s Stock Price & Valuation PictureFrom a valuation perspective, Dollar Tree shares present an attractive opportunity, trading at a discount relative to historical and industry benchmarks. With a forward 12-month price-to-earnings ratio of 13.42X, below the five-year median of 17.71X and the Retail-Discount Stores industry’s average of 33.29X, the company’s shares offer compelling value for investors seeking exposure to the sector. Image Source: Zacks Investment Research Recent market movements show that Dollar Tree’s shares have declined 28.3% in the past three months against the industry’s 3.8% growth. Image Source: Zacks Investment Research Stocks With Favorable CombinationHere are some companies, which, according to our model, have the right combination of elements to post an earnings beat this season:Burlington Stores BURL currently has an Earnings ESP of +11.72% and a Zacks Rank of 3. BURL is likely to register top and bottom-line increases when it reports first-quarter fiscal 2026 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $2.79 million, indicating an 11.6% rise from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here. The consensus estimate for Burlington Stores’ earnings is pegged at $1.73 per share, implying an 8.1% increase from the year-ago quarter’s actual. BURL delivered a trailing four-quarter earnings surprise of 13.8%, on average.Costco Wholesale COST has an Earnings ESP of +1.95% and a Zacks Rank #3 at present. The consensus estimate for Costco Wholesale’s third-quarter fiscal 2026 earnings is pegged at $4.91 per share, implying growth of 14.7% from the year-ago quarter’s actual.  For Costco Wholesale’s quarterly revenues, the consensus mark is pegged at $69.5 billion, which indicates an increase of 10% from the year-ago quarter’s reported figure. COST delivered a trailing four-quarter earnings surprise of 1.1%, on average.Dollar General DG has an Earnings ESP of +0.44% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for revenues is pegged at $10.8 billion in first-quarter fiscal 2026, implying 3.8% growth from the year-ago quarter’s actual.The consensus estimate for Dollar General earnings is pegged at $1.89 per share, suggesting 6.2% growth from the year-ago quarter’s reported number. DG delivered a trailing four-quarter earnings surprise of 24.8%, on average.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.Free: See Our Top Stock And 4 Runners UpThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks