Dollar Tree (DLTR.O): Expect Inline 2Q EPS, and F26 Guidance Increase Driven By Tariff Tailwinds

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11 Aug 2026 05:00:00 ET │ 22 pages

Dollar Tree (DLTR.O)

Expect Inline 2Q EPS, and F26 Guidance Increase Driven By Tariff

Tailwinds

CITI'S TAKE

We expect 2Q26 EPS of $1.09 (vs cons $1.09) driven by comps +3.0% (cons

+3.1% and guidance +2.5-3.5%) and GM +50bps (cons +50bps). We expect

mgmt to increase its F26 EPS guidance from $6.70-7.10 to $7.00-7.40 as

they flow through some of the benefit from tariff refunds (tailwind of

$110MM or ~$0.40 in EPS) and lower tariff rates (we est tailwind of

~$65MM or ~$0.25 in EPS) partially offset by price investments. We expect

transactions down in 2Q (vs -1.0% in 1Q26 vs -1.2% 4Q25) although we note

that our foot traffic data was positive for July, possibly helped by $1 pricepoints. We believe mgmt will reiterate their view for transactions to turn

positive in 2H26. We believe upside from lower tariffs is largely priced into

the stock. We favor DLTR over DG, given WMT’s price investments in food

and consumables which more directly competes with DG’s assortment.

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Est & TP: We are increasing our 2Q26 EPS est from $1.07 to $1.09 as we incorporate

slightly higher GM than previously estimated given some of the freight cost relief

DLTR likely experienced in 2Q vs initial guidance. We est 2Q comps of +3.0% (vs cons

+3.1% and market expectations of +3.0-3.5%). Our F26E EPS est goes from $7.16 to

$7.36 as we incorporate higher GM from the benefit of lower tariffs offset by

promos/pricing investment that partially offsets the tariff refund tailwind. Our F27E

EPS est goes from $8.07 to $8.16.

Price Performance

(RIC: DLTR.O, BB: DLTR US)

Neutral

Price (10 Aug 26 16:00)

US$129.37

Target price

US$125.00

Expected share price return

-3.4%

Expected dividend yield

0.0%

Expected total return

-3.4%

Market Cap

US$24,862M

Guidance: We expect mgmt to increase their F26 EPS guidance from $6.70-7.10 to

$7.00-7.40 as they flow through some of the tailwind from tariff refunds ($110MM or

~$0.40 in EPS) and lower tariff rates (we est ~$65MM or ~$0.25 in EPS benefit)

partially offset by price investments. Freight costs are also likely more favorable than

when DLTR updated their F26 guidance in 1Q (mgmt assumed fuel surcharges would

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