Dollar Tree, Inc. operates retail discount stores. The company operates in two segments, Dollar Tree and Family Dollar. The Dollar Tree segment offers merchandise at the fixed price of $ 1.25. It provides consumable merchandise, which includes everyday consumables, such as household paper and chemicals, food, candy, health, personal care products, and frozen and refrigerated food; variety merchandise comprising toys, durable housewares, gifts, stationery, party goods, greeting cards, softlines, arts and crafts supplies, and other items; and seasonal goods that include Christmas, Easter, Halloween, and Valentine's Day merchandise. It operates stores under the Dollar Tree and Dollar Tree Canada brands, as well as distribution centers in the United States and Canada. The Family Dollar segment operates general merchandise retail discount stores that offer consumable merchandise, which comprise food and beverages, tobacco, health and personal care, household chemicals, paper products, hardware and automotive supplies, diapers, batteries, and pet food and supplies; and home products, including housewares, home décor, and giftware, as well as domestics, such as comforters, sheets, and towels. It also provides apparel and accessories merchandise comprising clothing, fashion accessories, and shoes; and seasonal and electronics merchandise that include Christmas, Easter, Halloween, and Valentine's Day merchandise, as well as personal electronics, which comprise pre-paid cellular phones and services, stationery and school supplies, and toys. Dollar Tree, Inc. was founded in 1986 and is based in Chesapeake, Virginia.

Dollar Tree, Inc.

Dollar Tree, Inc. DLTR is taking smart steps to enhance the in-store experience and drive sustainable growth. Its strategic initiatives, particularly the ongoing store conversions and targeted expansions, are paying off, as reflected in improved same-store sales (comps). These efforts are drawing higher customer traffic while also lifting average basket size, underscoring the effectiveness of Dollar Tree’s focus on assortment breadth, value perception and store format optimization.
The company is experiencing broad-based performance across categories, with comps up 3.5% for consumables and 4.8% for discretionary during the third quarter of fiscal 2025. Discretionary categories accelerated in the fiscal third quarter, with outstanding performances in party and home decor. Consumables were steady, driven by household cleaning, personal care, snacks and cookies. Seasonal performance remained strong, mainly toward the end of the quarter. DLTR’s merchandising strategy also appears encouraging.
Dollar Tree has unveiled its partnership with Uber Eats, which reflects its strategic move in meeting customers’ needs and facilitating the way they want to shop. This collaboration provides access to Uber Eats' 25 million customers, which is a newer demographic that the DLTR has yet to completely tap into. The company remains excited by the initial response to the launch.
DLTR’s expanded assortment offers highly compelling products with agility in managing tariffs and other cost headwinds, all while providing customers with great discovery at reasonable prices. This offers great resilience in the times of ever-increasing agility of its organization. The company is executing on growth, productivity and cost control.
The company’s 3.0 stores are either new or converted stores that offer expanded multi-price assortments. The 3.0 portfolio has been outperforming its other store formats in higher traffic, ticket, comps and discretionary mix. DLTR is on track to have about half of its store base converted by year-end. Other formats are 2.0, which have a smaller multi-price assortment focused on a single aisle and 1.0 stores, which have above 95% of the items priced at $1.25. The aforesaid initiatives are anticipated to continue to boost comps and overall profitability.
DLTR’s Price Performance, Valuation and Estimates
Dollar Tree’s shares have gained 22.1% in the past six months compared with the industry’s 2.3% growth.
Image Source: Zacks Investment Research
From a valuation standpoint, DLTR is trading at a forward price-to-earnings ratio of 18.73X compared with the industry’s average of 29.91X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for DLTR’s fiscal 2025 and fiscal 2026 earnings per share (EPS) indicates year-over-year growth of 12.2% and 17.1%, respectively. The company’s EPS estimate for 2025 and 2026 has moved north in the past 30 days.
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Dollar Tree currently carries a Zacks Rank #2 (Buy).
Eye These Other Solid Picks in Retail
American Eagle Outfitters AEO, a specialty retailer of casual apparel, accessories and footwear, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for American Eagle Outfitters’ current financial-year sales indicates growth of 2.4% from the year-ago figure. URBN delivered an average earnings surprise of 35.1% in the last four quarters.
Boot Barn BOOT operates as a lifestyle retail chain offering footwear, apparel and accessories, carrying a Zacks Rank of 2 at present. BOOT delivered a trailing four-quarter earnings surprise of 5.4%, on average.
The Zacks Consensus Estimate for Boot Barn’s current fiscal-year sales indicates growth of 16.2% from the year-ago period’s reported figure.
Allbirds, Inc. BIRD, a lifestyle brand, currently has a Zacks Rank of 2. The company delivered a trailing four-quarter earnings surprise of 18.5%, on average.
The Zacks Consensus Estimate for BIRD’s current financial-year EPS indicates growth of 19.9% from the year-ago figure.
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Will Dollar Tree's Strategic Initiatives and Store Expansions Aid?

The TJX Companies, Inc.’s (TJX) fourth-quarter fiscal 2026 comparable sales guidance appears cautious relative to the momentum exiting the fiscal third quarter. On its fiscal third-quarter 2026earnings call management guided for fourth-quarter comparable sales growth of 2% to 3%, which implies a deceleration from the 5% increase delivered in the fiscal third quarter and comes in below the 5% comparable sales growth reported in the fourth quarter of fiscal 2025.
In the third quarter, TJX delivered results that exceeded its plan, supported primarily by strong customer traffic and steady demand for branded merchandise at attractive prices. Management pointed to broad-based shopper engagement across regions and income groups, driven by frequent store visits and a consistent flow of fresh assortments. The company also entered the fourth quarter with inventory levels it described as well-positioned, supported by strong availability of branded merchandise for the holiday season.
Even with these supportive operating conditions, the fourth-quarter comparable store sales outlook reflects a conservative posture. Management indicated that the guidance reflects caution around the holiday environment and the impact of last year’s stronger fourth-quarter performance, while noting that the quarter was off to a solid start.
Overall, the fiscal fourth quarter comparable sales range reflects a measured approach to guidance-setting. The outlook incorporates recent momentum while accounting for tougher comparisons and uncertainty around holiday sales patterns, resulting in expectations that remain cautious but balanced.
TJX Peer Comparison: Q4 Comps Outlooks at BURL and DLTR
Burlington Stores, Inc. (BURL) posted modest third-quarter fiscal 2025 performance, with comparable store sales increasing 1%, reflecting uneven demand patterns during the quarter. For the fourth quarter, Burlington Stores guided to comparable sales growth of 0% to 2%. This outlook reflects Burlington Stores’ measured approach to setting expectations amid a dynamic operating environment.
Dollar Tree, Inc. (DLTR) delivered solid third-quarter of fiscal 2025 momentum, with comparable store sales rising 4.2%, driven primarily by higher ticket from its expanding multi-price strategy. For the fourth quarter, Dollar Tree guided to comparable sales growth of 4% to 6%. This outlook reflects Dollar Tree’s measured approach to setting expectations for the upcoming quarter.
TJX’s Price Performance, Valuation and Estimates
Shares of The TJX Companies have gained 4% in the past month compared with the industry’s growth of 0.9%.
Image Source: Zacks Investment Research
From a valuation standpoint, TJX trades at a forward price-to-earnings ratio of 31.05X, up from the industry’s average of 29.91X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for The TJX Companies’ fiscal 2026 and 2027 EPS has moved down 1 cent each to $4.66 and $5.10, respectively, over the past 30 days.
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TJX currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Is TJX's Q4 Comps Guidance Too Conservative Given Recent Momentum?

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The TJX Companies, Inc. (TJX) is leaning on a key strength of its business, the treasure-hunt shopping experience, during the holiday season. On its third-quarter fiscal 2026earnings call management said the company is starting the fiscal fourth quarter on a solid footing, supported by strong access to branded merchandise. This positioning allows TJX to keep stores well stocked with appealing items, an important factor during a busy gift-buying period.
A key element behind potential traffic gains is the pace at which new products reach stores and online. TJX plans to introduce fresh selections several times a week throughout the holiday period. This steady rotation means shoppers are unlikely to see the same assortment twice, creating a natural incentive for repeat visits as customers return to see what’s new. This sense of discovery remains central to TJX’s appeal, particularly for holiday shoppers searching for distinctive gifts.
Management also highlighted that TJX does not depend on event-driven promotions to attract customers. Instead, shoppers can expect compelling prices every day, eliminating the need to wait for sales. This approach may increase urgency, as customers recognize that appealing items may not be available on a future visit.
In addition, TJX plans to offer a broad assortment of giftable merchandise across multiple brands and price ranges. Management indicated that this approach is intended to address different shopper budgets during the holiday period. The company has also launched holiday marketing efforts across various channels to maintain brand awareness. Together, these elements reflect management’s view that the treasure-hunt format may encourage shopper visits during the holiday season.
How TJX Stacks Up Against WMT and DLTR
Walmart Inc. (WMT) is aiming to drive traffic this holiday season by emphasizing value and assortment breadth. Walmart continues to rely on everyday low pricing, a strong private-label portfolio and regular assortment refresh across stores and online to encourage repeat visits. Management on the third quarter of fiscal 2026earnings callhas highlighted healthy inventory levels and an expanded range of giftable merchandise, positioning Walmart to appeal to budget-conscious shoppers.
Dollar Tree, Inc. (DLTR) is sharpening its value proposition through an expanded multi-price assortment and frequent product newness. Dollar Tree is emphasizing discovery, convenience and clean inventory levels to encourage repeat store visits. Management on the third quarter of fiscal 2025earnings callhas highlighted strong seasonal execution and broader appeal across income cohorts, positioning Dollar Tree to attract value-focused shoppers seeking affordability and variety.
TJX’s Price Performance, Valuation and Estimates
Shares of The TJX Companies have gained 5.2% in the past month compared with the industry’s growth of 2.1%.
Image Source: Zacks Investment Research
From a valuation standpoint, TJX trades at a forward price-to-earnings ratio of 31.09X, up from the industry’s average of 29.54X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for TJX’s fiscal 2026 and 2027 earnings implies year-over-year growth of 9.4% and 8.9%, respectively.
Image Source: Zacks Investment Research
TJX currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Will TJX's Treasure-Hunt Appeal Boost Traffic This Holiday Season?

Looking at the sectors faring worst as of midday Monday, shares of Services companies are underperforming other sectors, higher by 0.1%. Within that group, Dollar Tree Inc (Symbol: DLTR) and Target Corp (Symbol: TGT) are two large stocks that are lagging, showing a loss of 4.0% and 3.0%, respectively. Among the largest ETFs, one ETF closely following services stocks is the iShares U.S. Consumer Services ETF (Symbol: IYC), which is up 0.4% on the day, and up 9.36% year-to-date. Dollar Tree Inc, meanwhile, is up 63.75% year-to-date, and Target Corp, is down 26.30% year-to-date. Combined, DLTR and TGT make up approximately 1.1% of the underlying holdings of IYC.
The next worst performing sector is the Utilities sector, higher by 0.1%. Among large Utilities stocks, Dominion Energy Inc (Symbol: D) and Eversource Energy (Symbol: ES) are the most notable, showing a loss of 5.9% and 1.8%, respectively. One ETF closely tracking Utilities stocks is the Utilities Select Sector SPDR ETF (XLU), which is down 0.7% in midday trading, and up 14.08% on a year-to-date basis. Dominion Energy Inc, meanwhile, is up 8.80% year-to-date, and Eversource Energy is up 20.05% year-to-date. Combined, D and ES make up approximately 5.5% of the underlying holdings of XLU.
Comparing these stocks and ETFs on a trailing twelve month basis, below is a relative stock price performance chart, with each of the symbols shown in a different color as labeled in the legend at the bottom:
Here's a snapshot of how the S&P 500 components within the various sectors are faring in afternoon trading on Monday. As you can see, nine sectors are up on the day, while none of the sectors are down.
Technology & Communications
+0.7%
Also see:
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Monday Sector Laggards: Services, Utilities

Key Points
Costco and Dollar Tree both cater to consumers seeking affordable prices.
Dollar Tree has been benefiting from shoppers trading down.
Dollar Tree made a significant strategic bet that ultimately failed, costing investors.
Consumers are looking for bargains today. That fact is highlighted by Dollar Tree (NASDAQ: DLTR), which is seeing more and more shoppers from higher income brackets. However, Costco (NASDAQ: COST) is also a leader in providing products at attractive prices. Which one is the better investment right now?
Very different business models
Costco is a club store, so consumers pay a yearly membership fee for the privilege of shopping in the retailer's warehouses. That fee makes up roughly half of the company's operating income. There is very little cost associated with memberships, so that income flows right into gross profit and earnings. However, this annuity-like income source also empowers the company to accept lower margins on the goods it sells. That allows Costco to offer prices so low that customers want to keep coming back, and paying their membership fees.
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Dollar Tree is really just a traditional retailer. It sells products at a low price point, which is the main draw for consumers. However, it has to lure customers into its stores based on its product offerings and price points. While Costco and Dollar Tree could both fall out of favor with consumers, Dollar Tree is more exposed to the risk of customers choosing to shop at a different store concept.
Both are doing well right now
Costco just reported strong fiscal second-quarter 2026 earnings. Same-store sales rose 6.4%, with traffic up 3.1%. Dollar Tree's comparable quarter, which was the third quarter of 2025, saw same store sales jump 4.2%. During theearnings call management highlighted that it was seeing an increasing number of higher-income shoppers.
That's an important distinction between Costco and Dollar Tree. Dollar Tree benefits from consumers who trade down. In the quarter, the company estimated that three million new households shopped at a Dollar Tree, 60% of which earned more than $100,000. Those customers are likely coming from retailers like Target, which offers a more premium shopping experience. Target's same-store sales fell 2.7% in the third quarter of 2025.
The big takeaway here is that trade-down customers can, and likely will, trade back up to a more premium shopping experience when they are less worried about the economy. By contrast, shopping at Costco is a long-term commitment. Although the selection at Costco is highly curated, the products are generally of high quality. Dollar Tree's stores are filled with lower-quality products that are inexpensive to purchase, although the company is working to upgrade its product assortment. However, higher-quality products also come with higher price tags, which shifts the low-price proposition to which consumers have long been attracted.
If the economy strengthens, it seems more likely that Costco's business will continue to thrive. Dollar Tree, however, could find that it loses the wealthier customers who are currently benefiting its business.
The valuation is high in both cases
In general, Costco's club store model appears to be better positioned for long-term success. Investors are well aware of this fact, bidding the stock up to the point where it has a price-to-earnings ratio of 47 times. Dollar Tree's P/E ratio is a far lower 24.5 times. However, Costco's five-year average P/E is roughly 44 times, and Dollar Tree's five-year average P/E is about 21 times. Both stocks look expensive relative to their own histories.
If you are a value-focused investor, you likely won't want to invest in either of these retailers. Target would likely be a better choice, with its P/E of roughly 12 times below its five-year average of around 16 times. Growth investors, meanwhile, should probably tread with caution when considering Dollar Tree given its business model. And only aggressive growth investors will likely want to risk the lofty valuation being afforded to Costco, even though its business model and financial results are quite attractive.
Put Costco on the wish list, tread carefully with Dollar Tree
There's one more wrinkle when comparing Costco and Dollar Tree. Costco's business approach has remained consistent for decades: offering good products at low prices and opening new stores. Dollar Tree's most recent move, to expand its product assortment to include higher-priced items, comes after the disastrous acquisition of Family Dollar. That effort at growth came to an end in 2025 as Dollar Tree sold the store concept for billions less than it paid.
With a business model that has a proven track record, Costco will likely appeal to more investors. That said, most investors should probably put it on the wish list given its lofty valuation. If you do buy it right now, be prepared to hold for the long term. Paying a premium and holding has worked out well for Costco shareholders so far, but the current 15% drawdown could have further to run based on the stock's trading history.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Best Stock to Buy Right Now: Costco vs. Dollar Tree

Costco Wholesale Corporation COST reported first-quarter fiscal 2026 results, wherein the top line fell short of the Zacks Consensus Estimate, while the bottom line beat the same. Nonetheless, both revenues and earnings improved year over year, driven by robust membership growth, resilient traffic, double-digit e-commerce gains and margin expansion.
Costco’s Quarterly Performance: Key Metrics and Insights
Costco posted quarterly earnings of $4.34 per share, which excludes a 16-cent tax benefit, and surpassed the Zacks Consensus Estimate of $4.26. This compared favorably with the prior-year period’s earnings of $3.82 per share, which excludes a 22-cent tax benefit related to stock-based compensation. Including the tax benefit, quarterly earnings came in at $4.50, up from $4.04 per share reported in the prior-year period.
Total revenues, comprising net sales and membership fees, reached $67,307 million, up 8.3% from the year-ago quarter. However, the figure came just shy of the Zacks Consensus Estimate of $67,326 million. Momentum was driven by healthy traffic trends, continued strength in international markets and strong digitally enabled sales. E-commerce remained a standout contributor, helped by better personalization tools and improved app functionality.
Costco’s comparable sales rose 6.4% year over year in the quarter. Comparable sales in the United States grew 5.9%, while Canada and Other International markets saw increases of 6.5% and 8.8%, respectively. Digitally enabled comparable sales surged 20.5%, supported by solid performance across categories such as pharmacy, jewelry, tires, small electrics, apparel and majors.
Costco’s strategic investments, customer-centric approach and merchandise initiatives, along with an emphasis on membership growth, have helped it capture market share and maintain steady revenue growth. By prioritizing value and quality, the company has built strong customer loyalty, leading to an impressive membership renewal rate of 92.2% in the United States and Canada and 89.7% worldwide in the quarter.
Costco Wholesale Corporation Price, Consensus and EPS Surprise
Costco Achieves Membership Growth and Improved Margins
Net sales climbed 8.2% year over year to $65,978 million, while membership fees jumped 14% to $1,329 million, benefiting from strong renewal rates and the annualized benefit of the recent membership fee increase. Excluding the membership fee increase and FX, membership income jumped 7.3% year over year. Costco ended the quarter with 81.4 million paid household members, up 5.2% from the year-ago period, and total cardholders grew 5.1% to 145.9 million. Executive memberships increased 9.1% to 39.7 million.
Traffic improved 3.1% worldwide and 2.6% in the United States, while the average transaction or ticket increased 3.2% both globally and in the United States. Excluding the effects of gasoline price changes and foreign exchange, total comparable sales rose 6.4%, with the United States up 5.9%, Canada up 9% and Other International gaining 6.8%.
Gross margin expanded 4 basis points year over year to 11.3%, driven by efficiencies in fresh foods, better inventory execution, higher Kirkland Signature penetration and strength in ancillary businesses. The operating income grew 12.2% to $2,463 million, while the operating margin improved 20 basis points to 3.7%.
Costco's Store Updates and Expansion Plans
Costco currently operates 923 warehouses. These include 633 in the United States and Puerto Rico, 114 in Canada, 42 in Mexico, 37 in Japan, 29 in the United Kingdom, 20 in Korea, 15 in Australia, 14 in Taiwan, seven in China, five in Spain, three in France, two in Sweden and one each in Iceland and New Zealand.
During the quarter under discussion, Costco opened eight new warehouses, including a relocation in Canada, a third warehouse in France, four net new U.S. locations and two additional Canadian business centers. During fiscal 2026, the company plans to add 28 net new warehouses.
Costco’s Financial Health Snapshot
Costco ended the quarter with $16,217 million in cash and cash equivalents. Long-term debt, excluding the current portion, stood at $5,666 million, while shareholders’ equity totaled $30,303 million.
Operating cash flow increased meaningfully to $4,688 million for the 12 weeks ended Nov. 23, up from $3,260 million in the year-ago period. Capital expenditures were $1.53 billion for the quarter, consistent with plans to invest in warehouse openings, logistics, technology enhancements and member-experience improvements. Costco expects fiscal 2026 capital expenditures to be approximately $6.5 billion.
Shares of this Zacks Rank #3 (Hold) company have fallen 3.5% year to date against the industry’s rise of 5.3%.
Stocks to Consider
United Natural Foods, Inc. UNFI, North America’s premier grocery wholesaler, currently sports a Zacks Rank #1 (Strong Buy). UNFI has a trailing four-quarter earnings surprise of 52.1%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for United Natural Foods’ current financial-year sales and EPS calls for growth of 1% and 187.3%, respectively, from the year-ago reported numbers.
Boot Barn Holdings, Inc. BOOT, the nation’s leading lifestyle retailer of western and work-related footwear, apparel and accessories, currently carries a Zacks Rank #2 (Buy). BOOT has a trailing four-quarter earnings surprise of 5.4%, on average.
The Zacks Consensus Estimate for Boot Barn’s current financial-year sales and EPS implies growth of 16.2% and 20.5%, respectively, from the year-ago reported numbers.
Dollar Tree, Inc. DLTR, one of North America’s largest value retailers, currently carries a Zacks Rank #2. DLTR has a trailing four-quarter earnings surprise of 29.1%, on average.
The Zacks Consensus Estimate for Dollar Tree’s current financial-year EPS suggests growth of 11.8% from the year-ago reported numbers.
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Costco Beats Q1 Earnings Estimates With 6.4% Comparable Sales Growth

Fintel reports that on December 9, 2025, Barclays maintained coverage of Dollar Tree (NasdaqGS:DLTR) with a Overweight recommendation.
Analyst Price Forecast Suggests 3.44% Downside
As of December 6, 2025, the average one-year price target for Dollar Tree is $116.19/share. The forecasts range from a low of $75.75 to a high of $147.00. The average price target represents a decrease of 3.44% from its latest reported closing price of $120.33 / share.
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The projected annual revenue for Dollar Tree is 31,728MM, an increase of 67.33%. The projected annual non-GAAP EPS is 9.88, a decrease of 0.37% from the prior forecast.
What is the Fund Sentiment?
There are 1,448 funds or institutions reporting positions in Dollar Tree. This is an decrease of 17 owner(s) or 1.16% in the last quarter. Average portfolio weight of all funds dedicated to DLTR is 0.25%, an increase of 10.41%. Total shares owned by institutions increased in the last three months by 4.62% to 255,583K shares. The put/call ratio of DLTR is 1.12, indicating a bearish outlook.
What are Other Shareholders Doing?
Mantle Ridge holds 12,104K shares representing 6.09% ownership of the company. No change in the last quarter.
EdgePoint Investment Group holds 11,138K shares representing 5.60% ownership of the company. In its prior filing, the firm reported owning 10,826K shares , representing an increase of 2.80%. The firm decreased its portfolio allocation in DLTR by 3.18% over the last quarter.
Price T Rowe Associates holds 10,275K shares representing 5.17% ownership of the company. In its prior filing, the firm reported owning 5,088K shares , representing an increase of 50.48%. The firm increased its portfolio allocation in DLTR by 81.74% over the last quarter.
Capital International Investors holds 9,264K shares representing 4.66% ownership of the company. In its prior filing, the firm reported owning 9,532K shares , representing a decrease of 2.89%. The firm decreased its portfolio allocation in DLTR by 13.20% over the last quarter.
T. Rowe Price Investment Management holds 8,348K shares representing 4.20% ownership of the company. In its prior filing, the firm reported owning 8,046K shares , representing an increase of 3.62%. The firm decreased its portfolio allocation in DLTR by 4.29% over the last quarter.
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Barclays Maintains Dollar Tree (DLTR) Overweight Recommendation

Artificial intelligence (AI) may be a hot growth theme right now, but there’s an indication that the underlying trend shows a preference for value. Two of the best-performing stocks of 2025 reflect something entirely different — the real condition of the U.S. economy.
Two of the top performers Dollar Tree DLTR and Dollar General DG have seen their shares surge about 57% and 64% year to date, respectively — outperforming even NVIDIA’s NVDA 34.2% gain, as quoted in a Yahoo Finance article.
The dollar duo’s gains trumped that ofMeta, NVIDIA, Amazon, Apple, Microsoft, or Tesla, in short, the AI leaders and even bitcoin. Note that AI leaders’ ETF Roundhill Magnificent Seven MAGS has jumped 23.7% so far this year, underperforming DLTR and DG.
Discount Retailers Reveal the Real Story of the Economy
Both companies, which operate thousands of stores and act as essential shopping hubs for American households, reported earnings that sent a clear message about consumer behavior. Dollar General reported a same-store sales rise of 2.5% in Q3.
Dollar Tree’s same-store sales jumped 4.2%, while Target TGT saw a 3.8% decline in its latest quarter. Dollar Tree also added 3 million new shoppers, building on its already massive customer base of 100 million, as quoted in a Yahoo Finance article.
Higher-Income Shoppers Are “Trading Down”
Dollar Tree CEO Michael Creedon highlighted a shift that underscores the growing affordability pressures, as mentioned on the same Yahoo Finance article. About 60% of new shoppers of Dollar Tree earn over $100,000, 30% earn $60,000-$100,000, and the remaining earn under $60,000, per Michael Creedon.
Creedon summed up the scenario as wealthier consumers are “trading down” (as quoted on the above-said Yahoo Finance article) and lower-income families are depending more on dollar stores. Meanwhile, Dollar General CEO Todd Vasos reported rising customer traffic but more restrained spending per trip.
Should You Buy Value & Dividend ETFs?
The rise of Dollar Tree and Dollar Generaland the above-mentioned spending pattern suggests that value-focused investments should thrive in the near term as the economic condition remains edgy. On the surface, the economy looks super-strong, mainly due to AI-led investment.But underneath, most of the economy is chugging along. A weaker job market is weighing on the consumers’ sentiment and adding to the affordability crisis.
In a volatile scenario, dividend ETFs normally come to the rescue. The hunt for dividends in the equity market is always on, irrespective of how it is behaving. After all, who doesn’t like a steady stream of current income along with capital gains?And if investors are mired in a web of equity market uncertainty, global growth worries and geopolitical crisis, the lure for dividend investing increases further.
Value stocks trade at low valuations. These stocks come from sectors that have steady demand even in slowdowns (e.g. staples, healthcare and utilities). In an uncertain backdrop, investors prioritize stable cash flow, predictable earnings and possibly higher current income (which value stocks are normally known for).
ETFs in Focus
DLTR and DG stocks have exposure to ETFs like Invesco S&P 500 Equal Weight Consumer Staples ETF RSPS and Invesco S&P 500 Pure Value ETF RPV. Hence, these two ETFs deserve a look.
Apart from those two, investors can have a look at Global X U.S. Cash Flow Kings 100 ETF FLOW and Monarch Dividend Plus ETF MDPL. Investors can play other dividend ETFs like State Street SPDR S&P Dividend ETF SDY.
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Dollar Stores Top Mag-7 in 2025: Time for Value & Dividend ETFs?

Although retail sales are expected to be at record levels during the holiday shopping season, consumers have remained price sensitive, with Dollar General DG and Dollar Tree DLTR being prime beneficiaries thanks to their value-focused business models.
Seeing their stocks rally after beating Q3 expectations this week, both discount retail chains are exhibiting strong same-store sales growth, improved margins, and have raised their full-year EPS guidance. As two of the retail sector's top performers, Dollar General stock has spiked +75% this year, with Dollar Tree shares up over +60%.
Vastly outperforming the broader indexes and the Zacks Retail-Discount Market’s modest year-to-date return of +5%, let’s see if it’s still time to buy DG or DLTR for more upside.
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Strong Q3 Results
Posting Q3 sales of $10.64 billion, Dollar General’s top line increased 4% year over year and topped estimates of $10.61 billion. Attributed to stronger consumer traffic, Dollar General’s same-store sales increased 2.5% YoY. Most impressive, Q3 EPS of $1.28 surged 44% and blasted expectations of $0.92 by 39%. Outside of margin improvements, the impressive earnings beat was attributed to underlying operational improvements in regard to shrinkage (inventory losses).
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After divesting its ailing Family Dollar Store business earlier in the year, Dollar Tree’s Q3 sales fell to $4.74 billion versus $7.56 billion in the comparative quarter but slightly edged estimates. More importantly, alleviating Family Dollar-related overhead costs led to Dollar Tree’s Q3 EPS rising 8% to $1.21 and impressively exceeding expectations of $1.09 by 11%. Plus, Dollar Tree’s same-store sales increased 4%, driven by a higher average ticket size despite a small dip in traffic.
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Positive Guidance
Dollar General now expects full-year EPS between $6.30-$6.50, up from prior guidance of $5.80-$6.30. Furthermore, this came in above the current Zacks EPS Consensus of $6.17 or 4% growth. Full-year sales were guided at $42.52-$42.6 billion, slightly higher than the prior range of $42.36-$42.56 billion, with the consensus estimate currently at $42.5 billion or 4% growth.
As for Dollar Tree, it now expects full-year adjusted EPS of $5.60-$5.80, up from previous guidance of $5.32-$5.72 and above estimates of $5.61 or a 10% increase. Following the divestiture of Family Dollar, the consensus estimate currently calls for Dollar Tree’s annual sales to contract 37% to $19.39 billion compared to $30.82 billion a year ago, with the company narrowing its guidance to $19.35-$19.45 billion from $19.29-$19.49 billion.
DG & DLTR Valuation Comparison
Ironically, Dollar General and Dollar Tree stock are both trading at reasonable forward earnings multiples of 20X. While this may make it harder for investors to choose between them if need be, DG and DLTR are still at discounts to the benchmark S&P 500 and their Zacks-Retail Discount Stores Industry average of 26X forward earnings, respectively. DG and DLTR also trade beneath the industry’s average of 1.3X forward sales, with the S&P 500 at over 5X.
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Conclusion & Strategic Thoughts
Following such an extensive YTD rally, Dollar General and Dollar Tree stock both land a Zacks Rank #3 (Hold). To that point, at current levels, they are still making the argument for long-term value. In regard to distinguishing between the two, Dollar Tree may ultimatley be the better pick if consumer spending pressures persist, while Dollar General provides a wider and higher price range of items and could be the better option in terms of diversification.
Undoubtedly, DG and DLTR will be among the most appealing buy-the-dip candidates to consider if a sharp pullback is presented, and they may obtain a buy rating if a compelling trend of positive EPS revisions begins to emerge in correlation with their Q3 results and positive guidance.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.