Dollar Tree delivered a 120-basis-point expansion in gross margin, driven largely by progress in reducing shrink. Adjusted operating margin improved 110 basis points to 9.5%, supported by higher merchandise margins, freight favorability, and lower shrink. Inventory declined 9% year over year even as sales grew 7.2%, reflecting better inventory management and supply chain efficiency. Management remains cautiously optimistic that company-specific operational improvements can sustain margins, though higher fuel costs and potential tariff increases in the second half of fiscal 2026 may create fresh pressure.
Dollar Tree IncGross margin expanded 120 bps and operating margin improved 110 bps due to shrink reduction and efficiency gains.
