:max_bytes(150000):strip_icc()/GettyImages-2217651182-a46bbc5610c64409ab5127b94aef99ef.jpg "Here’s What Dollar Tree’s CEO Sees Coming for Consumers This Holiday Season")
:max_bytes(150000):strip_icc():format(jpeg)/GettyImages-2217651182-a46bbc5610c64409ab5127b94aef99ef.jpg)
Key Takeaways
- Holiday finances may be tight after tariffs take effect on the heels of years of price increases, Dollar Tree CEO Michael Creedon said Wednesday.
- Other discounters have also said they’re doing more business with higher-income households who are “trading down.”
- PwC research suggests that American shoppers may scale back their holiday-season spending, trimming their outlay on gifts, this year.
American consumers could feel pinched this holiday season.
Prices have risen significantly over the past four-plus years, and tariffs will likely exacerbate this trend this year, Dollar Tree (DLTR) CEO Michael Creedon Jr. said on a conference call Wednesday. Families with tighter finances may have a harder time keeping up in the second half of 2025, he added.
“If you look at the lower-income consumer, and you look at the challenges that they’re facing every day, just across their entire life, in terms of what things cost, it’s just… a cause for caution,” Creedon said, according to a transcript made available by AlphaSense.
The caution echoes some recent research findings. A survey released recently by PricewaterhouseCoopers suggested that shoppers planned to spend around $1,552 apiece this holiday season, down some 5% from a year earlier, with Generation Z shoppers slashing spending by more than 20%. Consumers planned to spend about 11% less on gifts specifically, PwC said, while keeping travel and entertainment spending steady.
“People are going to keep shopping, but with continuing concerns about tariffs and elevated prices (especially on electronics, apparel, toys, food, and household staples), value-conscious choices are likely to define the season,” the report said.
Dollar Tree Raises Full-Year Same-Store Sales Forecast
A number of other companies have recently warned that consumers are growing cautious. Dollar General (DG) said sales in its $1 sections climbed at double the rate of same-store sales across its portfolio as a whole. Other discounters—from Ollie’s Bargain Outlet (OLLI) to Kohl’s (KSS)—are gaining business from higher-income households “trading down.” Some shoppers are buying things, such as batteries, in bulk to reduce costs over time, Energizer (ENR) said.
Economic hardship may not hurt Dollar Tree much. The discounter raised its full-year forecast Wednesday, estimating that comparable store sales will grow 4% to 6% year-over-year, compared to a prior range of 3% to 5%.
Low-income consumers will still shop at Dollar Tree to stretch their budget, while those with greater means will continue to come for unexpected finds, said Creedon, who suggested Dollar Tree has “the answer” for everyone.
“They’re targeting the seasons, the holiday, the back-to-school–all that, and they’re saying ‘Wow, I can’t get over that I can get Dixie plates for $3,’” Creedon said, according to the transcript.
The company handed in numbers that exceeded expectations. Dollar Tree reported $0.77 in adjusted earnings per share on $4.6 billion in revenue for the quarter ended Aug. 2nd. Analysts were expecting $0.38 adjusted EPS on $4.5 billion in revenue, according to consensus estimates from Visible Alpha. Earnings were adjusted to reflect the sale of Family Dollar.
Dollar Tree shares, recently down 9%, remain up some 35% so far this year.
