Dollar Tree has spent the past few years trying to make its business bigger, better, and more relevant to shoppers who don’t necessarily think of the retailer as their first stop for everyday purchases.
So far, that strategy appears to be working.
The discount retailer reported first-quarter fiscal 2026 sales of $5 billion, a 7.2% increase from the previous year. Comparable-store sales rose 3.5% while the company expanded its adjusted operating margin to 9.5%.
There’s one important wrinkle in those numbers, though.
Customer traffic actually declined 1%. The sales increase came largely from a 4.5% increase in average ticket, helped by Dollar Tree’s expanding multi-price assortment.
That distinction matters because Dollar Tree is trying to get shoppers to buy more when they visit, rather than simply relying on more people walking through the doors.
And that strategy also explains why Dollar Tree plans to close about 75 stores this year even as it opens roughly 400 new locations, Fox Business reported.
Dollar Tree isn’t really shrinking
Dollar Tree’s plans to close 75 stores might sound like the kind of announcement that should worry investors and customers. But that isn’t what is happening here.
Dollar Tree opened 113 stores during the first quarter of the year, bringing its U.S. and Canadian footprint to 9,382 locations as of May 2.
The company expects to open roughly 400 locations during fiscal 2026, so its overall store count should still increase even after the planned closures.
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As to why Dollar Tree is closing stores, the answer is simple: Not every Dollar Tree location is equally valuable.
Retailers constantly evaluate stores based on sales, profitability, local demographics, lease economics, and the condition of the physical location. Closing weaker stores while opening locations with better growth potential can make a chain more profitable without actually reducing its overall presence.
Dollar Tree is also increasingly looking beyond its traditional customer base. The company has been opening more stores in affluent areas to attract consumers with larger budgets.
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Dollar Tree’s multi-price strategy is both an opportunity and a risk
Dollar Tree’s biggest change may be happening inside its stores. The company has been expanding beyond its traditional price-point identity, and Dollar Tree’s management team says the multi-price strategy is working.
About 85% of Dollar Tree’s sales are still generated by products priced at $2 or below, while the expanded assortment is helping drive sales in categories such as toys and beverages.
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That’s the good news.
The challenge is that Dollar Tree has to balance a broader assortment with the reason many customers shop there in the first place, which is seeking out value.
If consumers start seeing Dollar Tree as just another store where prices vary widely, the chain risks weakening the psychological advantage of its name.
There are other challenges, too.
As CEO Michael Creedon said during Dollar Tree’s most recent earnings call, the company has been operating “against the backdrop of ongoing uncertainty around fuel costs and tariffs.”
For now, however, Dollar Tree appears to be making a calculated bet. It’s willing to close stores that don’t fit the future it wants while adding locations that potentially can.
That means the 75 closures aren’t necessarily a sign that Dollar Tree is retreating. They may actually be evidence that the company is becoming more selective about where it grows.
