DLTR · Q3 2026 Earnings

Cautious

Dollar Tree

Reported December 3, 2025

30-second summary

Dollar Tree comped +4.2% (within but below Q2's +6.5%), delivered $1.21 adjusted EPS that cleared the implied flat-YoY Q3 bar, and narrowed-and-raised FY EPS to $5.60–$5.80 (midpoint $5.70 vs prior $5.52). The structural tell is Q4: comp guidance of 4.0%–6.0% sits at the low-to-mid end of the just-tightened 5.0%–5.5% FY range, and the FY comp range itself was narrowed by 50bps on both ends — midpoint up, ceiling down. The five-lever playbook is delivering (gross margin +40bps in Q3), but management is using the raise to bank certainty rather than to push the upside case.

Headline numbers

EPS

Q3 FY2026

$1.21

Revenue

Q3 FY2026

$4.75B

+9.4% YoY

Gross margin

Q3 FY2026

35.8%

Free cash flow

Q3 FY2026

$-0.06B

Operating margin

Q3 FY2026

7.2%

Key financials

Q3 FY2026

Metric	Q3 FY2026	YoY	Q2 FY2026	QoQ
Revenue	$4.75B	+9.4%	$4.57B	+4.0%
EPS	$1.21	—	$0.77	+57.1%
Gross margin	35.8%	—	34.4%	+140bps
Operating margin	7.2%	—	5.1%	+210bps
Free cash flow	$-0.06B	—	$0.02B	-466.0%

Guidance

FY2025 full-year EPS guidance raised to $5.60–$5.80 with FY2025 actuals at $19.40B revenue and $5.70 EPS hitting guidance midpoints; Q4 FY2025 guidance introduced with 4.0%–6.0% comp-store sales growth.

Guidance is issued for both next quarter and the full year. Both may appear below.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Revenue	Q3 FY2026	similar to Q3 2024 (qualitative)	$4.751 billion	in-line with qualitative guidance	Met
Adjusted Diluted EPS (non-GAAP)	Q3 FY2026	similar to Q3 2024 (qualitative, implying ~$1.20 range)	$1.21	+$0.01 above implied guide	Beat
Revenue	FY2025	$19.30–$19.50 billion	$19.40 billion	in-line; reported $19.40B within both prior and current range	Met

New guidance

Metric	Period	Guide	YoY
Revenue	Q4 FY2025	$5.4–$5.5 billion	—
Adjusted Diluted EPS (non-GAAP)	Q4 FY2025	$2.40–$2.60	—
Comparable Store Net Sales Growth	Q4 FY2025	4.0% to 6.0%	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Comparable Store Net Sales Growth	FY2025	4% to 6%	5.0% to 5.5%	-50 bps at low end, -50 bps at high end; range narrowed and shifted upward in midpoint	Lowered

Reaffirmed unchanged this quarter: Adjusted Diluted EPS (non-GAAP) ($5.60–$5.80)

Segment performance

Q3 FY2026

Segment	Q3 FY2026	YoY
Dollar Tree	$4.746B	+9.4%

Platform metrics

Q3 FY2026

Segment	Q3 FY2026
Same-Store Sales Growth	4.2%
Comparable Store Sales Growth (FY outlook)	5.0% to 5.5%
New Dollar Tree Stores Opened (Q3)	106
Store Conversions to Dollar Tree 3.0 (YTD)	646
Total Store Count	9,269
Sales per Square Foot (52-week)	$236

Profitability

Q3 FY2026

Segment	Q3 FY2026
Gross Margin Expansion (Q3)	40 bps

Other KPIs

Q3 FY2026

Segment	Q3 FY2026
Share Repurchases YTD	$1.5 billion

Management tone

No transcript was available for this quarter; tone analysis is drawn from the press release and prior quarters' calls.

Q1 "Q2 is going to hurt, the back half has to fix it" → Q2 "Q2 beat, Q3 flat, Q4 carries the year" → Q3 "Q3 cleared the bar, FY EPS locked in, Q4 floor reopened to 4%."

The clearest multi-quarter shift is on confidence asymmetry in the FY EPS range. Q1's $5.15–$5.65 was a wide stress band; Q2 narrowed and raised it to $5.32–$5.72; Q3 raised the low end by $0.28 and the high end by only $0.08. The press-release line that anchors this is the updated range "$5.60 to $5.80" with FY actual of $5.70 landing exactly at midpoint. Management is no longer defending a wide bet — they are confirming a tightly-executed plan. That is bullish on execution and bearish on upside optionality in the same gesture.

The second shift is the tariff narrative. Q1 framing was "highly fluid and changing week to week" with agility as an "improving" capability. Q2 hardened to "we will be able to mitigate most of the incremental margin pressure." Q3 retains that "mitigate most" commitment but adds an explicit date-stamped assumption: "assumes that the level of tariffs in place today, December 3, 2025, remains in effect for the balance of the fiscal year." That is a confidence step-up on execution (the playbook works at current tariff levels) paired with a fresh hedge on policy (any escalation reopens the question). The five-lever framework is no longer in proof-of-concept — it is in steady-state — but management is being explicit that steady-state is conditional.

The third shift is on comp ambition. Q1 reiterated +3–5% FY comp; Q2 raised to +4–6% on the +6.5% Q2 print; Q3 narrowed to +5.0–5.5% and set Q4 at +4–6%. The Q3 release leads with "multi-price strategy drove strong momentum" but the numbers say Q3 comp at +4.2% is the slowest of the year and Q4 is guided to allow re-deceleration to the 4% floor. The narrative voice is unchanged; the underlying ambition has been ratcheted in.

Answers to last quarter's watch list

Does Q3 adjusted EPS land "similar to" Q3 2024, or undershoot? $1.21 adjusted EPS cleared the implied ~$1.20 bar by a penny, validating the Q2 framing that $0.20 of Q2 timing benefit would reverse cleanly in Q3. The FY range was then raised, removing the immediate jeopardy that a Q3 miss would have created.

Resolved positively

Q3 gross margin vs. the FY +50–75bps improvement guide. Q3 gross margin +40bps YoY (35.8%) vs Q2's +20bps — H2 acceleration is showing up in the line as needed. The pace puts the +50–75bps FY guide on a credible glide path, though landing nearer the low end of the range than the high.

Resolved positively

Investor Day on Oct 15 — longer-range 3.0 conversion target and mid-term margin framework. The press release does not reference Investor Day disclosures and extraction provides no multi-year conversion target.

Not resolved

TSA income run-rate and Family Dollar separation cost true-up. The press release does not disclose Q3 TSA income separately, and the extraction does not surface a run-rate figure. The prior $85–$90M annualized framing remains unconfirmed against actuals.

Continue monitoring

Comp deceleration with tougher compares. Yes — Q3 comp at +4.2% is a 230bps step-down from Q2's +6.5%, and Q4 guidance of +4–6% allows further drift toward the 4% floor. The FY comp range narrowing (4–6% → 5.0–5.5%) also lowers the ceiling by 50bps. Multi-price 3.0 conversions are lapping their first-year benefit on schedule.

Resolved negatively

Tariff narrative durability. Q3 GM +40bps with $1.21 EPS validates the "mitigate most" commitment at the current tariff level. The new date-stamped assumption (tariffs as of Dec 3, 2025, held for balance of year) makes explicit that the durability is conditional on policy not escalating. Status: Resolved positively, with policy contingency added

What to watch into next quarter

Q4 comp landing inside the +4–6% range and where within it. Anything below the 5% FY midpoint is the warning sign that 3.0 conversions are lapping harder than the multi-price tailwind can offset. A print at or below 4% would invalidate the FY midpoint and force EPS into the low end of $5.60–$5.80.

Q4 gross margin print vs. the +50–75bps FY GM guide. YTD gross margin needs Q4 to maintain ~40bps+ of YoY expansion to land mid-range; below ~25bps signals tariff mitigation slipping.

Whether the December 3 tariff assumption holds through Q4 close. Any policy escalation between now and the Q4 print would expose how tight the EPS guide really is — management's "mitigate most" commitment was scoped to current levels.

Q4 TSA income disclosure — first full clean quarter post Family Dollar separation; watch for run-rate vs the prior $85–$90M annualized framing.

3.0 conversion pace exiting the year — 646 YTD with ~61 in Q3 (vs 85 in Q2) suggests deceleration; the question is whether FY exit count anchors a credible FY2026 conversion target.

FY2026 initial framing on the Q4 call — given how tightly management has narrowed FY2025, the first FY2026 comp/EPS/GM guide is the cleaner read on whether the "agility is now steady-state" posture holds at scale.

Sources

Dollar Tree Q3 FY2025 earnings press release, December 3, 2025 — https://www.sec.gov/Archives/edgar/data/935703/000093570325000104/ex991q3-25earningspressrel.htm
Dollar Tree Q2 FY2025 Tapebrief (prior quarter context)
Dollar Tree Q1 FY2025 Tapebrief (prior quarter context)

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