AI Takeaway
Dollar Tree delivered solid Q2 FY2026 results with revenue up 7.2% YoY to $4.98B and operating income surging 23.2% to $473.3M, though the balance sheet reflects a dramatic restructuring following the Family Dollar divestiture.
Revenue
$4.98B
++7.24% YoY
EPS (Basic)
$1.76
++9.32% YoY
Operating Income
$473.3M
++23.22% YoY
Filed · Source: SEC EDGAR 10-Q filing
Total revenue grew 7.2% YoY to $4,975.8M in Q2 FY2026, up from $4,639.7M in the prior year period, reflecting continued consumer demand for value-oriented retail and the impact of the Family Dollar divestiture reshaping the company's revenue base.
Source: Source: 10-Q Income Statement
Operating income jumped 23.2% YoY to $473.3M, pushing operating margin from 8.3% to 9.5%, suggesting improved cost discipline and a more profitable store mix following the divestiture of the lower-margin Family Dollar business.
Source: Source: 10-Q Income Statement
SG&A expenses rose 9.0% YoY to $1,382.6M, slightly faster than revenue growth of 7.2%, indicating ongoing cost pressures from labor, store operations, and potential integration or separation costs related to the Family Dollar transaction.
Source: Source: 10-Q Income Statement
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Upgrade to unlockLong-term debt increased 20.7% YoY to $2.93B, and the debt-to-equity ratio stands at a high 2.94x. With stockholders' equity declining 10.2% to $3.51B, the company's balance sheet carries meaningful financial risk if operating performance deteriorates or interest rates remain elevated.
Source: Source: 10-Q Balance Sheet
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Upgrade to unlock| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $4.98B | $4.64B | +7.24% |
Cost of Revenue | $3.14B | $2.99B | +5.16% |
Operating Income | $473.3M | $384.1M | +23.22% |
Net Income | $347.3M | $343.4M | +1.14% |
EPS (Basic) | $1.76 | $1.61 | +9.32% |
EPS (Diluted) | $1.76 | $1.61 | +9.32% |
SG&A Expense | $1.38B | $1.27B | +8.99% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $13.82B | $18.29B | -24.42% |
Current Assets | $3.7B | $8.6B | -56.98% |
Total Liabilities | $10.32B | $14.39B | -28.29% |
Current Liabilities | $3.18B | $8.24B | -61.34% |
Stockholders' Equity | $3.51B | $3.9B | -10.19% |
Cash & Equivalents | $1.01B | $1.01B | -0.01% |
Long-Term Debt | $2.93B | $2.43B | +20.74% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Financing Cash Flow | $-100.9M | $-439.4M | +77.04% |
Share Buybacks | $585.8M | $427.7M | +36.97% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Margin | 9.5% | 8.3% | +1.23% |
Net Margin | 7.0% | — | — |
ROE | 9.9% | — | — |
ROA | 2.5% | — | — |
Current Ratio | $1.161 | — | — |
Debt to Equity | $2.942 | — | — |
Other companies in Consumer Staples Merchandise Retail
Dollar Tree reported Q2 FY2026 revenue of $4,975.8M, up 7.2% YoY, with operating income surging 23.2% to $473.3M and EPS rising 9.3% to $1.76. The standout story is the dramatic balance sheet transformation following the Family Dollar divestiture, which cut total assets by 24.4% to $13.82B. Operating margin expanded to 9.5% from 8.3%, suggesting the remaining Dollar Tree banner is more profitable.
Dollar Tree's revenue grew 7.2% YoY to $4,975.8M in Q2 FY2026, compared to $4,639.7M in Q2 FY2025. This growth reflects continued consumer preference for value-oriented retail, though the comparison base is affected by the divestiture of the Family Dollar segment which significantly reshaped the company's footprint.
Dollar Tree's balance sheet contracted sharply, with total assets falling 24.4% YoY to $13.82B and current assets plunging 57.0% to $3.70B, primarily due to the removal of Family Dollar assets following the divestiture. Long-term debt, however, increased 20.7% to $2.93B, pushing the debt-to-equity ratio to a high 2.94x.
Yes, Dollar Tree significantly accelerated its share repurchase program, buying back $585.8M in stock during Q2 FY2026, a 37.0% increase from $427.7M in the prior year period. This contributed to EPS growth of 9.3% outpacing net income growth of just 1.1%, as the lower share count boosted per-share earnings.
The most significant risk is Dollar Tree's elevated leverage, with long-term debt rising 20.7% to $2.93B and a debt-to-equity ratio of 2.94x, which increases financial vulnerability. Additionally, SG&A expenses grew 9.0% YoY — faster than revenue — signaling ongoing cost pressures, and the company now faces greater concentration risk as a single-banner retailer with reduced diversification.