Dollar Tree Earnings Up Despite Storewide Price Increase; Family Dollar Sees Decline

In November of 2021, Dollar Tree announced that it was raising prices on its products storewide. As most shoppers know, Dollar Tree prices nearly everything the same, and for a long time that price was $1. The extreme discounter, though, decided to raise that number to $1.25, with stores rolling out the change into the early spring. Dollar Tree said in its press release that the decision is permanent and “is not a reaction to short-term or transitory market conditions,” and that the move would allow its stores to reintroduce previously discontinued products and introduce new ones.

The move appears to have worked out well for Dollar Tree. Earlier this week Dollar Tree announced in a press release that same-store sales in its Dollar Tree stores rose 11.2% compared to the first quarter of 2021. In a results call yesterday, CEO Mike Witynski explained that the number of transactions fell by 3.6% but the value of each of those transactions rose by 15.4%. In other words, it looks like slightly fewer people were shopping at Dollar Tree, but the company was making more per shopper.

In the same press release, Dollar Tree also announced that Family Dollar — which is owned by Dollar Tree — saw its sales fall by 2.8% over the first quarter of 2021. The company’s press release pointed to a couple of factors. One, “it cycled the significant stimulus dollars released in the prior year’s quarter.” And two, “for portions of the quarter, approximately 400 Family Dollar stores were temporarily closed due to a product-related recall, which negatively impacted Family Dollar’s quarterly comparable store sales by an estimated 200 basis points.”

You can read the full Dollar Tree press release here.