Why are investors rushing back into Dollar Tree stock?

Shares of Dollar Tree DLTR surged on Thursday after the discount retailer reported stronger-than-expected fiscal first-quarter earnings, raised its full-year profit outlook, and announced a new delivery partnership with DoorDash.

Dollar Tree stock jumped roughly 17% during trading, putting the shares on pace for their best single-day performance in nearly four years.

The rally followed a difficult year for the retailer, with shares having fallen more than 22% in 2026 prior to Thursday’s gains.

The company posted adjusted earnings of $1.74 per share for the quarter ended May 2, up from $1.26 a year earlier and ahead of analyst expectations of $1.53 per share, according to FactSet.

Revenue rose 7.2% year over year to $5 billion, slightly above Wall Street estimates of $5 billion.

Comparable sales increased 3.5%, topping analyst forecasts of 3.3% and marking the company’s seventh consecutive comparable-sales beat.

Margin gains help offset tariffs and weaker traffic

Dollar Tree said first-quarter gross margin expanded by 1.2 percentage points, supported by higher merchandise markups, lower freight expenses, and reduced shrink, the retail industry term for theft.

The company said higher tariff costs and increased markdown activity partially offset those benefits.

While customer traffic declined 1% year over year, the average amount spent per visit climbed 4.5%, continuing a trend seen over the past three quarters as shoppers increasingly focus on value purchases amid persistent inflation pressures.

Chief Executive Mike Creedon said consumers remain cautious in the current economic environment.

“Customers are shopping thoughtfully and closer to need, with a continued focus on affordability, convenience and trip efficiency,” Creedon said during the company’s earnings call.

“Importantly, our model is built for environments like this,” he added.

Creedon also noted that Dollar Tree continues seeing strong demand around holidays, including Easter, while customers increasingly shop across a broader range of everyday product categories.

The company reported sales gains in categories including toys, beverages, home décor, and household consumables.

“Where we have leaned into even higher quality, sharper price points and clearer value communication,” Creedon said.

Company raises guidance, expands delivery partnerships

Dollar Tree raised its full-year adjusted earnings guidance to a range of $6.70 to $7.10 per share, up from its previous forecast of $6.50 to $6.90.

The company maintained its outlook for same-store sales growth between 3% and 4%.

For the current quarter, Dollar Tree expects adjusted earnings between $1 and $1.15 per share, above analyst expectations of 99 cents.

The retailer also reaffirmed plans to open 400 new stores and close 75 locations during the year.

Earlier in the day, DoorDash announced a new partnership with Dollar Tree that will provide on-demand delivery services from the retailer’s US stores.

Dollar Tree already works with Uber Eats and Instacart for same-day delivery services.

The new partnership reflects broader efforts by discount retailers to expand convenience and digital shopping capabilities as consumers increasingly prioritize faster and more flexible purchasing options.

Dollar Tree’s results also lifted shares of rival Dollar General, which rose ahead of its upcoming earnings report scheduled for June 2.

Despite Thursday’s sharp rebound, Dollar Tree shares remain well below prior levels following the company’s sale of Family Dollar last summer at a substantial loss.