Q1 2026 Dollar Tree Inc Earnings Call

May 28, 2026

Speaker #1: Greetings and welcome to the Dollar Tree Q1 2026 earnings conference call and webcast. At this time, all participants are on the listen-only mode. A question-and-answer session will follow the formal presentation.

Operator: Greetings, and welcome to the Dollar Tree Q1 2026 Earnings Conference Call and Webcast. It's now my pleasure to turn the call over to Daniel Delrosario, Senior Vice President, Investor Relations, and Treasurer. Daniel, please go ahead.

Operator: Greetings, and welcome to the Dollar Tree Q1 2026 Earnings Conference Call and Webcast. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. You may be placed on the question queue at any time by pressing star one on your telephone keypad It's now my pleasure to turn the call over to Daniel Delrosario, Senior Vice President, Investor Relations, and Treasurer. Daniel, please go ahead.

Speaker #1: You may be placed into question queue at any time by pressing star 1 on your telephone keypad, and we ask that you please ask one question, one follow-up, then return to the queue.

Speaker #1: As a reminder, this conference is being recorded. If anyone should require operator assistance, please press star 0. It's now my pleasure to turn the call over to Daniel Del Rosario, Senior Vice President, Investor Relations and Treasurer.

Speaker #1: Daniel, please go ahead.

Speaker #2: Thank you, operator. Good morning, everyone, and thank you for joining us today to discuss Dollar Tree's first quarter fiscal 2026 results. With me today are Dollar Tree's CEO, Mike Creeden, and CFO, Stuart Glendinning.

Daniel Delrosario: Thank you, operator. Good morning, everyone, and thank you for joining us today to discuss Dollar Tree's Q1 fiscal 2026 results. With me today are Dollar Tree's CEO, Mike Creedon, and CFO, Stuart Glendinning. Before we begin, I would like to remind everyone that some of the remarks that we will make today about the company's expectations, plans, and future prospects are considered forward-looking statements under the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties, which could cause actual results to differ materially from those contemplated by our forward-looking statements.

Operator: Greetings, and welcome to the Dollar Tree Q1 2026 earnings conference call and webcast. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. You may be placed into the question queue at any time by pressing star one on your telephone keypad, and we ask you please ask one question, one follow-up, then return to the queue. As a reminder, this conference is being recorded. If anyone should require operator assistance, please press star zero. It's now my pleasure to turn the call over to Daniel Delrosario, Senior Vice President, Investor Relations and Treasurer. Daniel, please go ahead.

Speaker #2: Before we begin, I would like to remind everyone that some of the remarks that we will make today about the company's expectations, plans, and future prospects are considered forward-looking statements under the Safe Harbor Provision of the Private Securities Litigation Reform Act of 1995.

Speaker #2: A question-and-answer session will follow the formal presentation. You may be placed into question queue at any time by pressing star one on your telephone keypad, and we ask that you please ask one question one follow-up, then return to the queue.

Speaker #2: As a reminder, this conference is being recorded. If anyone should require operator assistance, please press star zero. It's now my pleasure to turn the call over to Daniel Del Rosario, Senior Vice President, Investor Relations and Treasurer.

Speaker #2: These statements are subject to risks and uncertainties, which could cause actual results to differ materially from those contemplated by our forward-looking statements. For information on the risks and uncertainties that could affect our actual results, please see the risk factors business and management's discussion and analysis of financial condition and results of operations section in our annual report on Form 10-K filed on March 16, 2026.

Daniel Delrosario: For information on the risks and uncertainties that could affect our actual results, please see the Risk Factors, Business, and Management's Discussion and Analysis of Financial Condition and Results of Operation section in our annual report on Form 10-K filed on 16 March 2026, our most recent press release in Form 8-K and other filings with the SEC. We caution against reliance on any forward-looking statements made today. We disclaim any obligation to update any forward-looking statements except as required by law. Also, during this call, we will discuss certain non-GAAP financial measures. Reconciliations of these non-GAAP items to the most directly comparable GAAP financial measures are provided in today's earnings release, available on the IR section of our website. These non-GAAP measures are not intended to be a substitute for GAAP results. Unless otherwise stated, we will refer to our financial results on a non-GAAP basis.

Speaker #2: Daniel, please go ahead. Thank you, operator. Good morning, everyone, and thank you for joining us today to discuss DOLLAR TREE's first quarter fiscal 2026 results.

Daniel Delrosario: Thank you, operator. Good morning, everyone, and thank you for joining us today to discuss Dollar Tree's Q1 fiscal 2026 results. With me today are Dollar Tree's CEO, Michael Creedon, and CFO, Stewart Glendinning. Before we begin, I would like to remind everyone that some of the remarks that we will make today about the company's expectations, plans, and future prospects are considered forward-looking statements under the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties which could cause actual results to differ materially from those contemplated by our forward-looking statements.

Speaker #2: With me today are Dollar Tree's CEO, Mike Creedon, and CFO, Stewart Glendinning. Before we begin, I would like to remind everyone that some of the remarks we make today about the company's expectations, plans, and future prospects are considered forward-looking statements under the Safe Harbor Provision of the Private Securities Litigation Reform Act of 1995.

Speaker #2: Our most recent press release in Form 8-K and other filings with the SEC. We caution against reliance on any forward-looking statements made today, and we disclaim any obligation to update any forward-looking statements except as required by law.

Speaker #2: Also, during this call, we will discuss certain non-GAAP financial measures. Reconciliations of these non-GAAP items to the most directly comparable GAAP financial measures are provided in today's earnings release available on the IR section of our website.

Speaker #2: These statements are subject to risks and uncertainties which could cause actual results to differ materially from those contemplated by our forward-looking statements. For information on the risks and uncertainties that could affect our actual results, please see the risk factors business and management's discussion and analysis of financial condition and results of operations section in our annual report on Form 10-K filed on March 16th, 2026, our most recent press release in Form 8-K and other filings with the SEC.

Daniel Delrosario: For information on the risks and uncertainties that could affect our actual results, please see the Risk Factors, Business and Management's Discussion and Analysis of Financial Condition and Results of Operation section in our annual report on Form 10-K filed on 16 March 2026, our most recent press release in Form 8-K, and other filings with the SEC. We caution against reliance on any forward-looking statements made today. We disclaim any obligation to update any forward-looking statements except as required by law. Also during this call, we will discuss certain non-GAAP financial measures. Reconciliations of these non-GAAP items to the most directly comparable GAAP financial measures are provided in today's earnings release available on the IR section of our website. These non-GAAP measures are not intended to be a substitute for GAAP results. Unless otherwise stated, we will refer to our financial results on a non-GAAP basis.

Speaker #2: These non-GAAP measures are not intended to be a substitute for GAAP results. Unless otherwise stated, we will refer to our financial results on a non-GAAP basis.

Speaker #2: Additionally, unless otherwise stated, all discussions today refer to our results from continuing operations and all comparisons discussed today for the first quarter of fiscal 2026 are against the same period a year ago.

Daniel Delrosario: Additionally, unless otherwise stated, all discussions today refer to our results from continuing operations, and all comparisons discussed today for the Q1 of fiscal 2026 are against the same period a year ago. Please note that a supplemental slide deck outlining selected operating metrics is available on the IR section of our website. Following our prepared remarks, Mike and Stuart will take your question. Please limit yourself to one question and one follow-up question. With that, I'll turn the call over to Mike.

Speaker #2: We caution against reliance on any forward-looking statements made today, and we disclaim any obligation to update any forward-looking statements except as required by law.

Speaker #2: Please note that a supplemental slide deck outlining selected operating metrics is available on the IR section of our website. Following our prepared remarks, Mike and Stuart will take your question.

Speaker #2: Please limit yourself to one question and one follow-up question. And with that, I'll turn the call over to Mike.

Speaker #3: Thanks, Daniel. Good morning, everyone. At Dollar Tree, we continue to focus on executing our strategic plan. Expand and modernize our assortment through multi-price, manage costs with agility, create a strong connection with our customer, open more new stores, and improve the condition of our fleet and the in-store experience.

Michael C. Creedon, Jr.: Thanks, Daniel. Good morning, everyone. At Dollar Tree, we continue to focus on executing our strategic plan, expand and modernize our assortment through multi-price, manage costs with agility, create a strong connection with our customer, open more new stores, and improve the condition of our fleet and the in-store experience. All of which are supported by supply chain excellence and our more than 150,000 associates. At the same time, we recognize the consumer environment remains dynamic, especially for lower-income households navigating higher fuel costs and broader macro uncertainty. Customers are shopping thoughtfully and closer to need with a continued focus on affordability, convenience, and trip efficiency. Customers value the ability to shop nearby and quickly, to stretch their budgets through smaller and more affordable pack sizes, and to still find a compelling assortment and discovery throughout the store. Importantly, our model is built for environments like this.

Mike Creedon: Thanks, Daniel. Good morning, everyone. At Dollar Tree, we continue to focus on executing our strategic plan, expand and modernize our assortment through multi-price, manage costs with agility, create a strong connection with our customer, open more new stores, and improve the condition of our fleet and the in-store experience. All of which are supported by supply chain excellence and our more than 150,000 associates. At the same time, we recognize the consumer environment remains dynamic, especially for lower-income households navigating higher fuel costs and broader macro uncertainty. Customers are shopping thoughtfully and closer to need with a continued focus on affordability, convenience, and trip efficiency. Customers value the ability to shop nearby and quickly, to stretch their budgets through smaller and more affordable pack sizes, and to still find a compelling assortment and discovery throughout the store. Importantly, our model is built for environments like this.

Speaker #2: These non-GAAP measures are not intended to be a substitute for GAAP results. Unless otherwise stated, we will refer to our financial results on a non-GAAP basis.

Speaker #2: Additionally, unless otherwise stated, all discussions today refer to our results from continuing operations, and all comparisons discussed today for the first quarter of fiscal 2026 are against the same period a year ago.

Daniel Delrosario: Additionally, unless otherwise stated, all discussions today refer to our results from continuing operations, and all comparisons discussed today for Q1 of 2026 are against the same period a year ago. Please note that a supplemental slide deck outlining selected operating metrics is available on the IR section of our website. Following our prepared remarks, Mike and Stewart will take your question. Please limit yourself to one question and one follow-up question. With that, I'll turn the call over to Mike.

Speaker #3: All of which are supported by supply chain excellence and are more than 150,000 associates. At the same time, we recognize that consumer environment remains dynamic, especially for lower-income households navigating higher fuel costs and broader macro uncertainty.

Speaker #3: Customers are shopping thoughtfully and closer to need, with a continued focus on affordability, convenience, and trip efficiency. Customers value the ability to shop nearby and quickly, to stretch their budgets, through smaller and more affordable pack sizes, and to still find a compelling assortment and discovery throughout the store.

Speaker #2: Please limit yourself to one question and one follow-up question. With that, I'll turn the call over to Mike.

Speaker #3: Thanks, Daniel. Good morning, everyone. At DOLLAR TREE, we continue to focus on executing our strategic plan. Expand and modernize our assortment through multi-price, manage costs with agility, create a strong connection with our customer, open more new stores, and improve the condition of our fleet and the in-store experience.

Michael Creedon: Thanks, Daniel. Good morning, everyone. At Dollar Tree, we continue to focus on executing our strategic plan, expand and modernize our assortment through multi-price, manage costs with agility, create a strong connection with our customer, open more new stores, and improve the condition of our fleet and the in-store experience. All of which are supported by supply chain excellence and our more than 150,000 associates. At the same time, we recognize the consumer environment remains dynamic, especially for lower-income households navigating higher fuel costs and broader macro uncertainty. Customers are shopping thoughtfully and closer to need with a continued focus on affordability, convenience, and trip efficiency. Customers value the ability to shop nearby and quickly, to stretch their budgets through smaller and more affordable pack sizes, and to still find a compelling assortment and discovery throughout the store. Importantly, our model is built for environments like this.

Speaker #3: Importantly, our model is built for environments like this. Our deep value in attractive opening price points not only enable us to best serve our core customer, they also position us to benefit from trade-in behavior as customers across multiple income cohorts become increasingly value-focused.

Speaker #3: All of which are supported by supply chain excellence and are more than 150,000 associates. At the same time, we recognize the consumer environment remains dynamic, especially for lower-income households navigating higher fuel costs and broader macro uncertainty.

Michael C. Creedon, Jr.: Our deep value and attractive opening price points not only enable us to best serve our core customer, they also position us to benefit from trade-in behavior as customers across multiple income cohorts become increasingly value-focused. Against a backdrop of ongoing uncertainty around fuel costs and tariffs, we will continue to protect value while strengthening the quality and relevance of our assortment. In this environment, our powerful combination of value, convenience, and discovery continues to resonate with customers across all income levels and a wide range of shopping occasions. Our financial performance in Q1 builds upon the strength of Q4 and validates our approach. Total sales increased 7.2%, while comparable sales rose 3.5%, driven by continued strength in ticket and traffic trends that improved in line with our expectations.

Mike Creedon: Our deep value and attractive opening price points not only enable us to best serve our core customer, they also position us to benefit from trade-in behavior as customers across multiple income cohorts become increasingly value-focused. Against a backdrop of ongoing uncertainty around fuel costs and tariffs, we will continue to protect value while strengthening the quality and relevance of our assortment. In this environment, our powerful combination of value, convenience, and discovery continues to resonate with customers across all income levels and a wide range of shopping occasions. Our financial performance in Q1 builds upon the strength of Q4 and validates our approach. Total sales increased 7.2%, while comparable sales rose 3.5%, driven by continued strength in ticket and traffic trends that improved in line with our expectations.

Speaker #3: Against a backdrop of ongoing uncertainty around fuel costs and tariffs, we will continue to protect value, while strengthening the quality and relevance of our assortment.

Speaker #3: Customers are shopping thoughtfully and closer to need, with a continued focus on affordability, convenience, and trip efficiency. Customers value the ability to shop nearby and quickly, to stretch their budgets through smaller and more affordable pack sizes, and to still find a compelling assortment and discovery throughout the store.

Speaker #3: In this environment, our powerful combination of value, convenience, and discovery continues to resonate with customers across all income levels. And a wide range of shopping occasions.

Speaker #3: Importantly, our model is built for environments like this. Our deep value in attractive opening price points not only enables us to best serve our core customers, it also positions us to benefit from trade-in behavior, as customers across multiple income cohorts become increasingly value-focused.

Speaker #3: Our financial performance in the first quarter builds upon the strength of the prior quarter and validates our approach. Total sales increased 7.2%, while comparable sales rose 3.5%, driven by continued strength in ticket and traffic trends that improved in line with our expectations.

Michael Creedon: Our deep value and attractive opening price points not only enable us to best serve our core customer, they also position us to benefit from trade-in behavior as customers across multiple income cohorts become increasingly value-focused. Against a backdrop of ongoing uncertainty around fuel costs and tariffs, we will continue to protect value while strengthening the quality and relevance of our assortment. In this environment, our powerful combination of value, convenience, and discovery continues to resonate with customers across all income levels and a wide range of shopping occasions. Our financial performance in Q1 builds upon the strength of the prior Q4 and validates our approach. Total sales increased 7.2%, while comparable sales rose 3.5%, driven by continued strength in ticket and traffic trends that improved in line with our expectations.

Mike Creedon: Our deep value and attractive opening price points not only enable us to best serve our core customer, they also position us to benefit from trade-in behavior as customers across multiple income cohorts become increasingly value-focused. Against a backdrop of ongoing uncertainty around fuel costs and tariffs, we will continue to protect value while strengthening the quality and relevance of our assortment. In this environment, our powerful combination of value, convenience, and discovery continues to resonate with customers across all income levels and a wide range of shopping occasions. Our financial performance in Q1 builds upon the strength of the prior Q4 and validates our approach. Total sales increased 7.2%, while comparable sales rose 3.5%, driven by continued strength in ticket and traffic trends that improved in line with our expectations.

Speaker #3: Against a backdrop of ongoing uncertainty around fuel costs and tariffs, we will continue to protect value, while strengthening the quality and relevance of our assortment.

Speaker #3: Our focus and execution drove strong margins and Q1 adjusted earnings per share growth of 38% year over year, to $1.74, exceeding the high end of our outlook range.

Michael C. Creedon, Jr.: Our focus and execution drove strong margins and Q1-adjusted earnings per share growth of 38% year-over-year to $1.74, exceeding the high end of our outlook range. As expected, this year's earlier Easter timing created a natural comp headwind. Our core customer continues to buy much closer to need. Despite these dynamics, we delivered a good quarter. Our performance reflects the underlying momentum in the business and strong execution from our merchandise, store, and supply chain teams. Our multi-price assortment continues to perform well and remains a meaningful growth driver. While Dollar Tree has historically, and continues to feature prominently around the holidays and celebrations, we are increasingly leveraging that traffic and customer engagement to build greater relevance across everyday consumables and household categories throughout the year.

Mike Creedon: Our focus and execution drove strong margins and Q1-adjusted earnings per share growth of 38% year-over-year to $1.74, exceeding the high end of our outlook range. As expected, this year's earlier Easter timing created a natural comp headwind. Our core customer continues to buy much closer to need. Despite these dynamics, we delivered a good quarter. Our performance reflects the underlying momentum in the business and strong execution from our merchandise, store, and supply chain teams. Our multi-price assortment continues to perform well and remains a meaningful growth driver. While Dollar Tree has historically, and continues to feature prominently around the holidays and celebrations, we are increasingly leveraging that traffic and customer engagement to build greater relevance across everyday consumables and household categories throughout the year.

Speaker #3: In this environment, our powerful combination of value, convenience, and discovery continues to resonate with customers across all income levels and a wide range of shopping occasions.

Speaker #3: As expected, this year's earlier Easter timing created a natural comp headwind, and our core customer continues to buy much closer to need. Despite these dynamics, we delivered a good quarter.

Speaker #3: Our financial performance in the first quarter builds upon the strength of the prior quarter, and validates our approach. Total sales increased 7.2%, while comparable sales rose 3.5%, driven by continued strength in ticket and traffic trends that improved in line with our expectations.

Speaker #3: Our performance reflects the underlying momentum in the business and strong execution from our merchandise. Supply chain teams. Our multi-price assortment continues to perform well, and remains a meaningful growth driver.

Speaker #3: Our focus in execution drove strong margins and Q1 adjusted earnings per share growth of 38% year over year, to a $1.74, exceeding the high end of our outlook range.

Michael Creedon: Our focus and execution drove strong margins and Q1-adjusted earnings per share growth of 38% year-over-year to $1.74, exceeding the high end of our outlook range. As expected, this year's earlier Easter timing created a natural comp headwind, and our core customer continues to buy much closer to need. Despite these dynamics, we delivered a good quarter. Our performance reflects the underlying momentum in the business and strong execution from our merchandise, store, and supply chain teams. Our multi-price assortment continues to perform well and remains a meaningful growth driver. While Dollar Tree has historically and continues to feature prominently around the holidays and celebrations, we are increasingly leveraging that traffic and customer engagement to build greater relevance across everyday consumables and household categories throughout the year. Our merchant teams are focused on bringing the multi-price excitement of holiday to the everyday categories.

Mike Creedon: Our focus and execution drove strong margins and Q1-adjusted earnings per share growth of 38% year-over-year to $1.74, exceeding the high end of our outlook range. As expected, this year's earlier Easter timing created a natural comp headwind, and our core customer continues to buy much closer to need. Despite these dynamics, we delivered a good quarter. Our performance reflects the underlying momentum in the business and strong execution from our merchandise, store, and supply chain teams. Our multi-price assortment continues to perform well and remains a meaningful growth driver. While Dollar Tree has historically and continues to feature prominently around the holidays and celebrations, we are increasingly leveraging that traffic and customer engagement to build greater relevance across everyday consumables and household categories throughout the year. Our merchant teams are focused on bringing the multi-price excitement of holiday to the everyday categories.

Speaker #3: While Dollar Tree has historically and continues to feature prominently around the holidays and celebrations, we are increasingly leveraging that traffic and customer engagement to build greater relevance across everyday consumables and household categories throughout the year.

Speaker #3: Our merchant teams are focused on bringing the multi-price excitement of holiday to the everyday categories. Increasingly, at Dollar Tree, we've been saying come for the holiday, stay for the everyday.

Michael C. Creedon, Jr.: Our merchant teams are focused on bringing the multi-price excitement of holiday to the everyday categories. Increasingly at Dollar Tree, we've been saying, Come for the holiday, stay for the everyday. Customers often enter the store for a seasonal need, particularly around holidays and celebrations, and then engage more broadly across everyday categories once in the store. Our internal data continues to show that expanded multi-price assortment is supporting incremental strength in everyday categories like toys and beverages. Turning to the components of comp, traffic declined 1% in the quarter, representing a 20 basis point sequential improvement from the Q4. This improvement is consistent with our expectations.

Mike Creedon: Our merchant teams are focused on bringing the multi-price excitement of holiday to the everyday categories. Increasingly at Dollar Tree, we've been saying, Come for the holiday, stay for the everyday. Customers often enter the store for a seasonal need, particularly around holidays and celebrations, and then engage more broadly across everyday categories once in the store. Our internal data continues to show that expanded multi-price assortment is supporting incremental strength in everyday categories like toys and beverages. Turning to the components of comp, traffic declined 1% in the quarter, representing a 20 basis point sequential improvement from the Q4. This improvement is consistent with our expectations.

Speaker #3: Our performance reflects the underlying momentum in the business and strong execution from our merchandise, store, and supply chain teams. Our multi-price assortment continues to perform well, and remains a meaningful growth driver.

Speaker #3: Customers often enter the store for a seasonal need, particularly around holidays and celebrations. And then engage more broadly across everyday categories once in the store.

Speaker #3: Our internal data continues to show that expanded multi-price assortment is supporting incremental strength in everyday categories like toys and beverages. Turning to the components of comp, traffic declined 1% in the quarter.

Speaker #3: While Dollar Tree has historically, and continues to, feature prominently around the holidays and celebrations, we are increasingly leveraging that traffic and customer engagement to build greater relevance across everyday consumables and household categories throughout the year.

Speaker #3: Representing a 20 basis points sequential improvement from the fourth quarter. This improvement is consistent with our expectations. On a two-year basis, traffic trends improved about 200 basis points sequentially in the first quarter when compared to the Q4 two-year traffic stack, reflecting both continued normalization from the initial reaction to pricing resets and also encouraging customer response to our expanding assortment and value proposition.

Speaker #3: Our merchant teams are focused on bringing the multi-price excitement of holiday to the everyday categories. Increasingly, at Dollar Tree, we've been saying, "Come for the holiday, stay for the everyday."

Michael C. Creedon, Jr.: On a 2-year basis, traffic trends improved about 200 basis points sequentially in Q1 when compared to the Q4 2-year traffic stack, reflecting both continued normalization from the initial reaction to pricing resets and also encouraging customer response to our expanding assortment and value proposition. Increased 4.5% in the quarter. Ticket growth reflects the continued evolution of our assortment, the expansion of multi-price, and our ability to offer customers a broader range of value options across categories. We are seeing strength in areas such as home decor and household consumables, where we have leaned into even higher quality, sharper price points, and clearer value communication. The expansion of multi-price continues to be a key enabler of that progress.

Mike Creedon: On a 2-year basis, traffic trends improved about 200 basis points sequentially in Q1 when compared to the Q4 2-year traffic stack, reflecting both continued normalization from the initial reaction to pricing resets and also encouraging customer response to our expanding assortment and value proposition. Increased 4.5% in the quarter. Ticket growth reflects the continued evolution of our assortment, the expansion of multi-price, and our ability to offer customers a broader range of value options across categories. We are seeing strength in areas such as home decor and household consumables, where we have leaned into even higher quality, sharper price points, and clearer value communication. The expansion of multi-price continues to be a key enabler of that progress.

Michael Creedon: Increasingly at Dollar Tree, we've been saying, "Come for the holiday, stay for the everyday." Customers often enter the store for a seasonal need, particularly around holidays and celebrations, and then engage more broadly across everyday categories once in the store. Our internal data continues to show that expanded multi-price assortment is supporting incremental strength in everyday categories like toys and beverages. Turning to the components of comp, traffic declined 1% in the quarter, representing a 20 basis point sequential improvement from the Q4. This improvement is consistent with our expectations. On a two-year basis, traffic trends improved about 200 basis points sequentially in the Q1 when compared to the Q4 two-year traffic stack, reflecting both continued normalization from the initial reaction to pricing resets and also encouraging customer response to our expanding assortment and value proposition. Ticket increased 4.5% in the quarter.

Mike Creedon: Increasingly at Dollar Tree, we've been saying, "Come for the holiday, stay for the everyday." Customers often enter the store for a seasonal need, particularly around holidays and celebrations, and then engage more broadly across everyday categories once in the store. Our internal data continues to show that expanded multi-price assortment is supporting incremental strength in everyday categories like toys and beverages. Turning to the components of comp, traffic declined 1% in the quarter, representing a 20 basis point sequential improvement from the Q4. This improvement is consistent with our expectations. On a two-year basis, traffic trends improved about 200 basis points sequentially in the Q1 when compared to the Q4 two-year traffic stack, reflecting both continued normalization from the initial reaction to pricing resets and also encouraging customer response to our expanding assortment and value proposition. Ticket increased 4.5% in the quarter.

Speaker #3: Customers often enter the store for a seasonal need, particularly around holidays and celebrations, and then engage more broadly across everyday categories once in the store.

Speaker #3: Increased 4.5% in the quarter. Ticket growth reflects the continued evolution of our assortment, the expansion of multi-price, and our ability to offer customers a broader range of value options across categories.

Speaker #3: Representing a 20 basis point sequential improvement from the fourth quarter. This improvement is consistent with our expectations. On a two-year basis, traffic trends improved about 200 basis points sequentially in the first quarter when compared to the Q4 two-year traffic stack, reflecting both continued normalization from the initial reaction to pricing resets and also encouraging customer response to our expanding assortment and value proposition.

Speaker #3: We are seeing strength in areas such as home decor and household consumables, where we have leaned into even higher quality sharper price points and clearer value communication.

Speaker #3: The expansion of multi-price continues to be a key enabler of that progress. It allows us to improve quality and core categories, introduce new items that were previously not viable at a single price point, and create more compelling options across a wider range of purchase occasions.

Michael C. Creedon, Jr.: It allows us to improve quality in core categories, introduce new items that were previously not viable at a single price point, and create more compelling options across a wider range of purchase occasions. Additionally, it enables us to better align price points with product attributes, improving both clarity and value for the customer. At the same time, we remain disciplined in maintaining strong relative price competitiveness. Our opening price point remains a critical anchor for both the brand and the customer's perception of value. Even as we expand assortment and choice above the entry price point, rigorous benchmarking of pricing and assortment against competitors has enabled us to maintain our position as a value leader. Importantly, approximately 85% of our sales mix remains at $2 and below, underscoring our continued commitment to affordability and everyday value.

Mike Creedon: It allows us to improve quality in core categories, introduce new items that were previously not viable at a single price point, and create more compelling options across a wider range of purchase occasions. Additionally, it enables us to better align price points with product attributes, improving both clarity and value for the customer. At the same time, we remain disciplined in maintaining strong relative price competitiveness. Our opening price point remains a critical anchor for both the brand and the customer's perception of value. Even as we expand assortment and choice above the entry price point, rigorous benchmarking of pricing and assortment against competitors has enabled us to maintain our position as a value leader. Importantly, approximately 85% of our sales mix remains at $2 and below, underscoring our continued commitment to affordability and everyday value.

Speaker #3: Ticket increased 4.5% in the quarter. Ticket growth reflects the continued evolution of our assortment. The expansion of multi-price, and our ability to offer customers a broader range of value options across categories.

Speaker #3: Additionally, it enables us to better align price points with product attributes, improving both clarity and value for the customer. At the same time, we remain disciplined in maintaining strong relative price competitiveness.

Michael Creedon: Ticket growth reflects the continued evolution of our assortment, the expansion of multi-price, and our ability to offer customers a broader range of value options across categories. We are seeing strength in areas such as home decor and household consumables, where we have leaned into even higher quality, sharper price points, and clearer value communication. The expansion of multi-price continues to be a key enabler of that progress. It allows us to improve quality in core categories, introduce new items that were previously not viable at a single price point, and create more compelling options across a wider range of purchase occasions. Additionally, it enables us to better align price points with product attributes, improving both clarity and value for the customer. At the same time, we remain disciplined in maintaining strong relative price competitiveness.

Mike Creedon: Ticket growth reflects the continued evolution of our assortment, the expansion of multi-price, and our ability to offer customers a broader range of value options across categories. We are seeing strength in areas such as home decor and household consumables, where we have leaned into even higher quality, sharper price points, and clearer value communication. The expansion of multi-price continues to be a key enabler of that progress. It allows us to improve quality in core categories, introduce new items that were previously not viable at a single price point, and create more compelling options across a wider range of purchase occasions. Additionally, it enables us to better align price points with product attributes, improving both clarity and value for the customer. At the same time, we remain disciplined in maintaining strong relative price competitiveness.

Speaker #3: Our opening price point remains a critical anchor for both the brand and the customer's perception of value. Even as we expand assortment and choice above the entry price point, rigorous benchmarking of pricing and assortment against competitors has enabled us to maintain our position as a value leader.

Speaker #3: We are seeing strength in areas such as home decor and household consumables, where we have leaned into even higher quality sharper price points and clearer value communication.

Speaker #3: The expansion of multi-price continues to be a key enabler of that progress. It allows us to improve quality in core categories, introduce new items that were previously not viable at a single price point, and create more compelling options across a wider range of purchase occasions.

Speaker #3: Importantly, approximately 85% of our sales mix remains at $2 and below. Underscoring our continued commitment to affordability and everyday value. And as Dollar Tree celebrates its 40th anniversary this year, customers will also see the dollar price point featured in stores as we honor the heritage and foundation of the brand.

Michael C. Creedon, Jr.: As Dollar Tree celebrates its 40th anniversary this year, customers will also see the dollar price point featured in stores as we honor the heritage and foundation of the brand. Let's move on now and discuss profitability. Dollar Tree's margin profile is improving. We are making progress in areas that are within our control. This dynamic contributes to stronger overall profitability and reinforces the trajectory we outlined coming into the year. Stuart will review the financial results in more detail later, but I would like to call out an area where our operating initiatives, in particular, our Gold Store standards and agile cost management focus, are translating into positive financial outcomes. While it's still early days, we are starting to bend the curve on shrink. Shrink improved year over year as our strategies are gaining real traction.

Mike Creedon: As Dollar Tree celebrates its 40th anniversary this year, customers will also see the dollar price point featured in stores as we honor the heritage and foundation of the brand. Let's move on now and discuss profitability. Dollar Tree's margin profile is improving. We are making progress in areas that are within our control. This dynamic contributes to stronger overall profitability and reinforces the trajectory we outlined coming into the year. Stuart will review the financial results in more detail later, but I would like to call out an area where our operating initiatives, in particular, our Gold Store standards and agile cost management focus, are translating into positive financial outcomes. While it's still early days, we are starting to bend the curve on shrink. Shrink improved year over year as our strategies are gaining real traction.

Speaker #3: Let's move on now and discuss profitability. Dollar Tree's margin profile is improving. We are making progress in areas that are within our control. This dynamic contributes to stronger overall profitability and reinforces the trajectory we outlined coming into the year.

Michael Creedon: Our opening price point remains a critical anchor for both the brand and the customer's perception of value. Even as we expand assortment and choice above the entry price point, rigorous benchmarking of pricing and assortment against competitors has enabled us to maintain our position as a value leader. Importantly, approximately 85% of our sales mix remains at $2 and below, underscoring our continued commitment to affordability and everyday value. As Dollar Tree celebrates its 40th anniversary this year, customers will also see the dollar price point featured in stores as we honor the heritage and foundation of the brand. Let's move on now and discuss profitability. Dollar Tree's margin profile is improving. We are making progress in areas that are within our control. This dynamic contributes to stronger overall profitability and reinforces the trajectory we outlined coming into the year.

Mike Creedon: Our opening price point remains a critical anchor for both the brand and the customer's perception of value. Even as we expand assortment and choice above the entry price point, rigorous benchmarking of pricing and assortment against competitors has enabled us to maintain our position as a value leader. Importantly, approximately 85% of our sales mix remains at $2 and below, underscoring our continued commitment to affordability and everyday value. As Dollar Tree celebrates its 40th anniversary this year, customers will also see the dollar price point featured in stores as we honor the heritage and foundation of the brand. Let's move on now and discuss profitability. Dollar Tree's margin profile is improving. We are making progress in areas that are within our control. This dynamic contributes to stronger overall profitability and reinforces the trajectory we outlined coming into the year.

Speaker #3: Stuart will review the financial results in more detail later, but I would like to call out an area where our operating initiatives in particular are gold store standards and agile cost management focus are translating into positive financial outcomes.

Speaker #3: Importantly, approximately 85% of our sales mix remains at $2 and below. Underscoring our continued commitment to affordability and everyday value. And as DOLLAR TREE celebrates its 40th anniversary this year, customers will also see the dollar price point featured in stores as we honor the heritage and foundation of the brand.

Speaker #3: While it's still early days, we are starting to bend the curve on shrink. Shrink improved year over year as our strategies are gaining real traction.

Speaker #3: Initiatives we outlined at Investor Day, such as the non-negotiable audit, along with continued teaching, coaching, and training on shrink prevention, are having a measurable impact.

Speaker #3: Let's move on now and discuss profitability. DOLLAR TREE's margin profile is improving. We are making progress in areas that are within our control. This dynamic contributes to stronger overall profitability and reinforces the trajectory we outlined coming into the year.

Michael C. Creedon, Jr.: Initiatives we outlined at Investor Day, such as the non-negotiable audit, along with continued teaching, coaching, and training on shrink prevention, are having a measurable impact. In addition, we are seeing increasing benefits from our product protection efforts, which are helping to reduce loss on higher-risk items. In departments where we've tightened merchandising standards, improved product placement, and applied more deliberate controls on an at-risk category, performance is holding up better, and losses are coming down. We are also being more intentional in how we identify opportunity areas in stores, addressing them through focused training, stronger oversight, and consistent operational discipline. Improved store standards and greater execution consistency across the fleet directly contribute to more stable performance at the store level. While this work is ongoing, early results continue to reinforce that disciplined, consistent execution in the field is driving meaningful improvement versus last year.

Mike Creedon: Initiatives we outlined at Investor Day, such as the non-negotiable audit, along with continued teaching, coaching, and training on shrink prevention, are having a measurable impact. In addition, we are seeing increasing benefits from our product protection efforts, which are helping to reduce loss on higher-risk items. In departments where we've tightened merchandising standards, improved product placement, and applied more deliberate controls on an at-risk category, performance is holding up better, and losses are coming down. We are also being more intentional in how we identify opportunity areas in stores, addressing them through focused training, stronger oversight, and consistent operational discipline. Improved store standards and greater execution consistency across the fleet directly contribute to more stable performance at the store level. While this work is ongoing, early results continue to reinforce that disciplined, consistent execution in the field is driving meaningful improvement versus last year.

Speaker #3: In addition, we are seeing increasing benefits from our product protection efforts, which are helping to reduce loss on higher risk items. In departments where we've tightened merchandising standards, improved product placement, and applied more deliberate controls, on an at-risk category, performance is holding up better and losses are coming down.

Speaker #3: Stewart will review the financial results in more detail later, but I would like to call out an area where our operating initiatives in particular are gold store standards and agile cost management focus, are translating into positive financial outcomes.

Michael Creedon: Stewart will review the financial results in more detail later, but I would like to call out an area where our operating initiatives, in particular our Gold Star standards and agile cost management focus, are translating into positive financial outcomes. While it's still early days, we are starting to bend the curve on shrink. Shrink improved year over year as our strategies are gaining real traction. Initiatives we outlined at Investor Day, such as the non-negotiable audit, along with continued teaching, coaching, and training on shrink prevention, are having a measurable impact. In addition, we are seeing increasing benefits from our product protection efforts, which are helping to reduce loss on higher-risk items. In departments where we've tightened merchandising standards, improved product placement, and applied more deliberate controls on an at-risk category, performance is holding up better and losses are coming down.

Mike Creedon: Stewart will review the financial results in more detail later, but I would like to call out an area where our operating initiatives, in particular our Gold Star standards and agile cost management focus, are translating into positive financial outcomes. While it's still early days, we are starting to bend the curve on shrink. Shrink improved year over year as our strategies are gaining real traction. Initiatives we outlined at Investor Day, such as the non-negotiable audit, along with continued teaching, coaching, and training on shrink prevention, are having a measurable impact. In addition, we are seeing increasing benefits from our product protection efforts, which are helping to reduce loss on higher-risk items. In departments where we've tightened merchandising standards, improved product placement, and applied more deliberate controls on an at-risk category, performance is holding up better and losses are coming down.

Speaker #3: We are also being more intentional in how we identify opportunity areas in stores, addressing them through focused training, stronger oversight, and consistent operational discipline.

Speaker #3: While it's still early days, we are starting to bend the curve on shrink. Shrink improved year over year, as our strategies are gaining real traction.

Speaker #3: Initiatives we outlined at Investor Day, such as the non-negotiable audit, along with continued teaching, coaching, and training on shrink prevention, are having a measurable impact.

Speaker #3: Improved store standards and greater execution consistency across the fleet directly contribute to more stable performance at the store level. While this work is ongoing, early results continue to reinforce that disciplined, consistent execution in the field is driving meaningful improvement versus last year.

Speaker #3: At Dollar Tree, we're focused on the areas within our control. And our gold store initiatives are contributing to our financial performance. Now, let's talk about marketing, which is a new muscle for Dollar Tree and one that is becoming increasingly relevant as our assortment expands as our customer base increasingly includes more higher-income customers and as we seek to drive shopping frequency.

Michael C. Creedon, Jr.: At Dollar Tree, we're focused on the areas within our control, and our Gold Store initiatives are contributing to our financial performance. Now, let's talk about marketing, which is a new muscle for Dollar Tree and one that is becoming increasingly relevant as our assortment expands, as our customer base increasingly includes more higher-income customers, and as we seek to drive shopping frequency. Dollar Tree has one of the strongest unaided awareness levels in retail, and we are working to more fully leverage that strength. We have been building and scaling more advanced marketing capabilities, particularly around targeted and data-driven engagement. These efforts improve our understanding of customer behavior and how we communicate value across different customer groups. They enable us to better segment our customer base and tailor messaging in a way that is more relevant.

Mike Creedon: At Dollar Tree, we're focused on the areas within our control, and our Gold Store initiatives are contributing to our financial performance. Now, let's talk about marketing, which is a new muscle for Dollar Tree and one that is becoming increasingly relevant as our assortment expands, as our customer base increasingly includes more higher-income customers, and as we seek to drive shopping frequency. Dollar Tree has one of the strongest unaided awareness levels in retail, and we are working to more fully leverage that strength. We have been building and scaling more advanced marketing capabilities, particularly around targeted and data-driven engagement. These efforts improve our understanding of customer behavior and how we communicate value across different customer groups. They enable us to better segment our customer base and tailor messaging in a way that is more relevant.

Speaker #3: We are also being more intentional in how we identify opportunity areas in stores, addressing them through focused training, stronger oversight, and consistent operational discipline.

Michael Creedon: We are also being more intentional in how we identify opportunity areas in stores, addressing them through focused training, stronger oversight, and consistent operational discipline. Improved store standards and greater execution consistency across the fleet directly contribute to more stable performance at the store level. While this work is ongoing, early results continue to reinforce that disciplined, consistent execution in the field is driving meaningful improvement versus last year. At Dollar Tree, we're focused on the areas within our control, and our G.O.L.D. store initiatives are contributing to our financial performance. Now, let's talk about marketing, which is a new muscle for Dollar Tree and one that is becoming increasingly relevant as our assortment expands, as our customer base increasingly includes more higher-income customers, and as we seek to drive shopping frequency.

Mike Creedon: We are also being more intentional in how we identify opportunity areas in stores, addressing them through focused training, stronger oversight, and consistent operational discipline. Improved store standards and greater execution consistency across the fleet directly contribute to more stable performance at the store level. While this work is ongoing, early results continue to reinforce that disciplined, consistent execution in the field is driving meaningful improvement versus last year. At Dollar Tree, we're focused on the areas within our control, and our G.O.L.D. store initiatives are contributing to our financial performance. Now, let's talk about marketing, which is a new muscle for Dollar Tree and one that is becoming increasingly relevant as our assortment expands, as our customer base increasingly includes more higher-income customers, and as we seek to drive shopping frequency.

Speaker #3: Dollar Tree has one of the strongest unaided awareness levels in retail. And we are working to more fully leverage that strength. We have been building and scaling more advanced marketing capabilities, particularly around targeted and data-driven engagement.

Speaker #3: These efforts improve our understanding of customer behavior and how we communicate value across different customer groups. They enable us to better segment our customer base and tailor messaging in a way that is more relevant.

Speaker #3: At DOLLAR TREE, we're focused on the areas within our control, and our gold store initiatives are contributing to our financial performance. Now, let's talk about marketing, which is a new muscle for DOLLAR TREE and one that is becoming increasingly relevant as our assortment expands as our customer base increasingly includes more higher-income customers and as we seek to drive shopping frequency.

Speaker #3: This includes how we communicate assortment, highlight key categories, and support seasonal and everyday merchandising initiatives. The net result is better customer engagement and reinforcement of our value proposition.

Michael C. Creedon, Jr.: This includes how we communicate assortment, highlight key categories, and support seasonal and everyday merchandising initiatives. The net result is better customer engagement and reinforcement of our value proposition. We are also improving how we measure the effectiveness of our marketing efforts, enabling us to refine our approach over time and ensure that we are investing in the most impactful channels and strategies, and are capturing a return on our investment. It is about improving precision and delivering clear, relevant messaging that aligns with how customers are shopping our stores and engaging with our expanded assortment. As these capabilities continue to evolve, they will play an increasingly important role in supporting overall performance and strengthening customer engagement. At Dollar Tree, everything starts with the customer, and we are spending more time listening to our customers and understanding how they shop in ways we never have before.

Mike Creedon: This includes how we communicate assortment, highlight key categories, and support seasonal and everyday merchandising initiatives. The net result is better customer engagement and reinforcement of our value proposition. We are also improving how we measure the effectiveness of our marketing efforts, enabling us to refine our approach over time and ensure that we are investing in the most impactful channels and strategies, and are capturing a return on our investment. It is about improving precision and delivering clear, relevant messaging that aligns with how customers are shopping our stores and engaging with our expanded assortment. As these capabilities continue to evolve, they will play an increasingly important role in supporting overall performance and strengthening customer engagement. At Dollar Tree, everything starts with the customer, and we are spending more time listening to our customers and understanding how they shop in ways we never have before.

Speaker #3: We are also improving how we measure the effectiveness of our marketing efforts. Enabling us to refine our approach over time and ensure that we are investing in the most impactful channels and strategies.

Speaker #3: DOLLAR TREE has one of the strongest unaided awareness levels in retail. And we are working to more fully leverage that strength. We have been building and scaling more advanced marketing capabilities, particularly around targeted and data-driven engagement.

Michael Creedon: Dollar Tree has one of the strongest unaided awareness levels in retail, and we are working to more fully leverage that strength. We have been building and scaling more advanced marketing capabilities, particularly around targeted and data-driven engagement. These efforts improve our understanding of customer behavior and how we communicate value across different customer groups. They enable us to better segment our customer base and tailor messaging in a way that is more relevant. This includes how we communicate assortment, highlight key categories, and support seasonal and everyday merchandising initiatives. The net result is better customer engagement and reinforcement of our value proposition. We are also improving how we measure the effectiveness of our marketing efforts, enabling us to refine our approach over time and ensure that we are investing in the most impactful channels and strategies and are capturing a return on our investment.

Mike Creedon: Dollar Tree has one of the strongest unaided awareness levels in retail, and we are working to more fully leverage that strength. We have been building and scaling more advanced marketing capabilities, particularly around targeted and data-driven engagement. These efforts improve our understanding of customer behavior and how we communicate value across different customer groups. They enable us to better segment our customer base and tailor messaging in a way that is more relevant. This includes how we communicate assortment, highlight key categories, and support seasonal and everyday merchandising initiatives. The net result is better customer engagement and reinforcement of our value proposition. We are also improving how we measure the effectiveness of our marketing efforts, enabling us to refine our approach over time and ensure that we are investing in the most impactful channels and strategies and are capturing a return on our investment.

Speaker #3: And our capturing of return on our investment. It is about improving precision and delivering clear, relevant messaging that aligns with how customers are shopping our stores and engaging with our expanded assortment.

Speaker #3: As these capabilities continue to evolve, they will play an increasingly important role in supporting overall performance and strengthening customer engagement. At Dollar Tree, everything starts with the customer.

Speaker #3: And we are spending more time listening to our customers and understanding how they shop in ways we never have before. Let's turn to traffic, which remains an important component of the overall model.

Michael C. Creedon, Jr.: Let's turn to traffic, which remains an important component of the overall model. The performance in Q1 was consistent with our expectations and directionally aligned with the traffic patterns we discussed last quarter following the pricing transition and restickering activity. Our experience with breaking the dollar demonstrated that a major pricing reset at Dollar Tree results in a temporary shift in the balance between traffic and ticket, while overall comp performance remains healthy. Importantly, we continue to believe the current traffic response remains more muted and will normalize more quickly, reflecting the more targeted and strategic nature of the pricing actions taken over the past year. We remain highly focused on the needs of our customers and approach pricing thoughtfully, ensuring we continue to deliver the deep value they rely on, while reinforcing our position as the value leader.

Mike Creedon: Let's turn to traffic, which remains an important component of the overall model. The performance in Q1 was consistent with our expectations and directionally aligned with the traffic patterns we discussed last quarter following the pricing transition and restickering activity. Our experience with breaking the dollar demonstrated that a major pricing reset at Dollar Tree results in a temporary shift in the balance between traffic and ticket, while overall comp performance remains healthy. Importantly, we continue to believe the current traffic response remains more muted and will normalize more quickly, reflecting the more targeted and strategic nature of the pricing actions taken over the past year. We remain highly focused on the needs of our customers and approach pricing thoughtfully, ensuring we continue to deliver the deep value they rely on, while reinforcing our position as the value leader.

Speaker #3: The performance in Q1 was consistent with our expectations and directionally aligned with the traffic patterns we discussed last quarter following the pricing transition and restickering activity.

Michael Creedon: It is about improving precision and delivering clear, relevant messaging that aligns with how customers are shopping our stores and engaging with our expanded assortment. As these capabilities continue to evolve, they will play an increasingly important role in supporting overall performance and strengthening customer engagement. At Dollar Tree, everything starts with the customer, and we are spending more time listening to our customers and understanding how they shop in ways we never have before. Let's turn to traffic, which remains an important component of the overall model. The performance in Q1 was consistent with our expectations and directionally aligned with the traffic patterns we discussed last quarter following the pricing transition and restickering activity. Our experience with breaking the dollar demonstrated that a major pricing reset at Dollar Tree results in a temporary shift in the balance between traffic and ticket, while overall comp performance remains healthy.

Mike Creedon: It is about improving precision and delivering clear, relevant messaging that aligns with how customers are shopping our stores and engaging with our expanded assortment. As these capabilities continue to evolve, they will play an increasingly important role in supporting overall performance and strengthening customer engagement. At Dollar Tree, everything starts with the customer, and we are spending more time listening to our customers and understanding how they shop in ways we never have before. Let's turn to traffic, which remains an important component of the overall model. The performance in Q1 was consistent with our expectations and directionally aligned with the traffic patterns we discussed last quarter following the pricing transition and restickering activity. Our experience with breaking the dollar demonstrated that a major pricing reset at Dollar Tree results in a temporary shift in the balance between traffic and ticket, while overall comp performance remains healthy.

Speaker #3: Our experience with breaking the dollar demonstrated that a major pricing reset at Dollar Tree results in a temporary shift in the balance between traffic and ticket.

Speaker #3: While overall comp performance remains healthy. Importantly, we continue to believe the current traffic response remains more muted and will normalize more quickly. Reflecting the more targeted and strategic nature of the pricing actions taken over the past year.

Speaker #3: We remain highly focused on the needs of our customers and approach pricing thoughtfully, ensuring we continue to deliver the deep value they rely on while reinforcing our position as the value leader.

Speaker #3: More broadly, traffic trends are behaving in a way that is aligned with how we would expect the business to perform given the evolution of assortment, multi-price strategy, and customer behavior.

Michael C. Creedon, Jr.: More broadly, traffic trends are behaving in a way that is aligned with how we would expect the business to perform given the evolution of assortment, multi-price strategy, and customer behavior. When we look across the fleet, traffic performance varies in ways that are consistent with trade area, store characteristics, and execution levels. That variation provides clear visibility into the underlying drivers of traffic performance and helps inform how we continue to operate and prioritize across the business. Importantly, it also reinforces that the levers we are focused on, execution, assortment, and overall store standards, are directly relevant to how the business performs. Against a still uncertain macro backdrop, we are seeing customers remain highly value-focused, intentional in how they shop, and shopping closer to need.

Mike Creedon: More broadly, traffic trends are behaving in a way that is aligned with how we would expect the business to perform given the evolution of assortment, multi-price strategy, and customer behavior. When we look across the fleet, traffic performance varies in ways that are consistent with trade area, store characteristics, and execution levels. That variation provides clear visibility into the underlying drivers of traffic performance and helps inform how we continue to operate and prioritize across the business. Importantly, it also reinforces that the levers we are focused on, execution, assortment, and overall store standards, are directly relevant to how the business performs. Against a still uncertain macro backdrop, we are seeing customers remain highly value-focused, intentional in how they shop, and shopping closer to need.

Speaker #3: Our experience with breaking the dollar demonstrated that a major pricing reset at DOLLAR TREE results in a temporary shift in the balance between traffic and ticket.

Speaker #3: When we look across the fleet, traffic performance varies in ways that are consistent with trade area, store characteristics, and execution levels. That variation provides clear visibility into the underlying drivers of traffic performance and helps inform how we continue to operate and prioritize across the business.

Speaker #3: While overall comp performance remains healthy, importantly, we continue to believe the current traffic response remains more muted and will normalize more quickly, reflecting the more targeted and strategic nature of the pricing actions taken over the past year.

Michael Creedon: Importantly, we continue to believe the current traffic response remains more muted and will normalize more quickly, reflecting the more targeted and strategic nature of the pricing actions taken over the past year. We remain highly focused on the needs of our customers and approach pricing thoughtfully, ensuring we continue to deliver the deep value they rely on while reinforcing our position as the value leader. More broadly, traffic trends are behaving in a way that is aligned with how we would expect the business to perform given the evolution of assortment, multi-price strategy, and customer behavior. When we look across the fleet, traffic performance varies in ways that are consistent with trade area, store characteristics, and execution levels. That variation provides clear visibility into the underlying drivers of traffic performance and helps inform how we continue to operate and prioritize across the business.

Mike Creedon: Importantly, we continue to believe the current traffic response remains more muted and will normalize more quickly, reflecting the more targeted and strategic nature of the pricing actions taken over the past year. We remain highly focused on the needs of our customers and approach pricing thoughtfully, ensuring we continue to deliver the deep value they rely on while reinforcing our position as the value leader. More broadly, traffic trends are behaving in a way that is aligned with how we would expect the business to perform given the evolution of assortment, multi-price strategy, and customer behavior. When we look across the fleet, traffic performance varies in ways that are consistent with trade area, store characteristics, and execution levels. That variation provides clear visibility into the underlying drivers of traffic performance and helps inform how we continue to operate and prioritize across the business.

Speaker #3: Importantly, it also reinforces that the levers we are focused on, execution, assortment, and overall store standards are directly relevant to how the business performs.

Speaker #3: Against a still uncertain macro backdrop, we are seeing customers remain highly value-focused, intentional in how they shop, and shopping closer to need. While the external environment remains dynamic, including ongoing variability in fuel prices and tariff-related uncertainty, we believe our value positioning continues to resonate with customers, navigating this current inflationary environment.

Speaker #3: More broadly, traffic trends are behaving in a way that is aligned with how we would expect the business to perform, given the evolution of assortment, multi-price strategy, and customer behavior.

Michael C. Creedon, Jr.: While the external environment remains dynamic, including ongoing variability in fuel prices and tariff-related uncertainty, we believe our value positioning continues to resonate with customers navigating this current inflationary environment. As we anniversary last year's pricing actions in H2, traffic should also benefit from the operational and merchandising progress already underway across the business. Our focus remains on reinforcing clear value in the assortment, targeted customer engagement, and better in-store execution. First, we'll continue leaning into the areas where customers are responding positively, particularly multi-price expansion in everyday categories and a compelling opening price point assortment. Second, as I just discussed, we are continuing to scale our marketing capabilities, where targeted outreach is driving incremental trips and a strong ROI.

Mike Creedon: While the external environment remains dynamic, including ongoing variability in fuel prices and tariff-related uncertainty, we believe our value positioning continues to resonate with customers navigating this current inflationary environment. As we anniversary last year's pricing actions in H2, traffic should also benefit from the operational and merchandising progress already underway across the business. Our focus remains on reinforcing clear value in the assortment, targeted customer engagement, and better in-store execution. First, we'll continue leaning into the areas where customers are responding positively, particularly multi-price expansion in everyday categories and a compelling opening price point assortment. Second, as I just discussed, we are continuing to scale our marketing capabilities, where targeted outreach is driving incremental trips and a strong ROI.

Speaker #3: As we anniversary last year's pricing actions in the second half, traffic should also benefit from the operational and merchandising progress already underway across the business and our focus remains on reinforcing clear value in the assortment, targeted customer engagement, and better in-store execution.

Speaker #3: Importantly, it also reinforces that the levers we are focused on, execution, assortment, and overall store standards, are directly relevant to how the business performs.

Michael Creedon: Importantly, it also reinforces that the levers we are focused on, execution, assortment, and overall store standards, are directly relevant to how the business performs. Against a still uncertain macro backdrop, we are seeing customers remain highly value-focused, intentional in how they shop, and shopping closer to need. While the external environment remains dynamic, including ongoing variability in fuel prices and tariff-related uncertainty, we believe our value positioning continues to resonate with customers navigating this current inflationary environment. As we anniversary last year's pricing actions in the H2, traffic should also benefit from the operational and merchandising progress already underway across the business, and our focus remains on reinforcing clear value in the assortment, targeted customer engagement, and better in-store execution. First, we'll continue leaning into the areas where customers are responding positively, particularly multi-price expansion in everyday categories and a compelling opening price point assortment.

Mike Creedon: Importantly, it also reinforces that the levers we are focused on, execution, assortment, and overall store standards, are directly relevant to how the business performs. Against a still uncertain macro backdrop, we are seeing customers remain highly value-focused, intentional in how they shop, and shopping closer to need. While the external environment remains dynamic, including ongoing variability in fuel prices and tariff-related uncertainty, we believe our value positioning continues to resonate with customers navigating this current inflationary environment. As we anniversary last year's pricing actions in the H2, traffic should also benefit from the operational and merchandising progress already underway across the business, and our focus remains on reinforcing clear value in the assortment, targeted customer engagement, and better in-store execution. First, we'll continue leaning into the areas where customers are responding positively, particularly multi-price expansion in everyday categories and a compelling opening price point assortment.

Speaker #3: Against a still uncertain macro backdrop, we are seeing customers remain highly value-focused and intentional in how they shop, and shopping closer to need. While the external environment remains dynamic, including ongoing variability in fuel prices and tariff-related uncertainty, we believe our value positioning continues to resonate with customers navigating this current inflationary environment.

Speaker #3: First, we'll continue leaning into the areas where customers are responding positively, particularly multi-price expansion in everyday categories and a compelling opening price point assortment.

Speaker #3: Second, as I just discussed, we are continuing to scale our marketing capabilities. We're targeted outreach is driving incremental trips and a strong ROI. Third, on the operations side, we're focused on making stores easier to shop, ensuring consistent cashier coverage, continuing to address underperforming stores with tighter field accountability, and reinforcing our gold standards across the fleet to improve execution, store conditions, and the overall customer experience.

Michael C. Creedon, Jr.: Third, on the operations side, we're focused on making stores easier to shop, ensuring consistent cashier coverage, continuing to address underperforming stores with tighter field accountability, and reinforcing our gold standards across the fleet to improve execution, store conditions, and the overall customer experience. Fourth, we'll continue improving the experience through disciplined store refreshes and renovations focused on enhancing productivity and the customer experience. As our founders often said, when we operate clean, bright, and inviting stores, our customers win, and Dollar Tree wins. Finally, because our model enables us to help our customer better navigate uncertain times, Dollar Tree has in the past become more relevant in tougher economic environments. This may prove an added tailwind over the quarters ahead. Taken together, we believe these efforts support improved trip frequency, broader customer engagement across shopping occasions, and a more consistent experience that should help us earn that next visit.

Mike Creedon: Third, on the operations side, we're focused on making stores easier to shop, ensuring consistent cashier coverage, continuing to address underperforming stores with tighter field accountability, and reinforcing our gold standards across the fleet to improve execution, store conditions, and the overall customer experience. Fourth, we'll continue improving the experience through disciplined store refreshes and renovations focused on enhancing productivity and the customer experience. As our founders often said, when we operate clean, bright, and inviting stores, our customers win, and Dollar Tree wins. Finally, because our model enables us to help our customer better navigate uncertain times, Dollar Tree has in the past become more relevant in tougher economic environments. This may prove an added tailwind over the quarters ahead. Taken together, we believe these efforts support improved trip frequency, broader customer engagement across shopping occasions, and a more consistent experience that should help us earn that next visit.

Speaker #3: As we anniversary last year's pricing actions in the second half, traffic should also benefit from the operational and merchandising progress already underway across the business. Our focus remains on reinforcing clear value in the assortment, targeted customer engagement, and better in-store execution.

Speaker #3: First, we'll continue leaning into the areas where customers are responding positively. Particularly multi-price expansion in everyday categories and a compelling opening price point assortment.

Speaker #3: Fourth, we'll continue improving the experience through disciplined store refreshes and renovations focused on enhancing productivity and the customer experience. As our founders often said, "When we operate clean, bright, and inviting stores, our customers win," and Dollar Tree wins.

Speaker #3: Second, as I just discussed, we are continuing to scale our marketing capabilities. We're targeted outreach is driving incremental trips and a strong ROI. Third, on the operation side, we're focused on making stores easier to shop, ensuring consistent cashier coverage, continuing to address underperforming stores with tighter field accountability, and reinforcing our gold standards across the fleet to improve execution, store conditions, and the overall customer experience.

Michael Creedon: Second, as I just discussed, we are continuing to scale our marketing capabilities, where targeted outreach is driving incremental trips and a strong ROI. Third, on the operations side, we are focused on making stores easier to shop, ensuring consistent cashier coverage, continuing to address underperforming stores with tighter field accountability, and reinforcing our gold standards across the fleet to improve execution, store conditions, and the overall customer experience. Fourth, we will continue improving the experience through disciplined store refreshes and renovations focused on enhancing productivity and the customer experience. As our founders often said, when we operate clean, bright, and inviting stores, our customers win and Dollar Tree wins. Finally, because our model enables us to help our customer better navigate uncertain times, Dollar Tree has, in the past, become more relevant in tougher economic environments. This may prove an added tailwind over the quarters ahead.

Mike Creedon: Second, as I just discussed, we are continuing to scale our marketing capabilities, where targeted outreach is driving incremental trips and a strong ROI. Third, on the operations side, we are focused on making stores easier to shop, ensuring consistent cashier coverage, continuing to address underperforming stores with tighter field accountability, and reinforcing our gold standards across the fleet to improve execution, store conditions, and the overall customer experience. Fourth, we will continue improving the experience through disciplined store refreshes and renovations focused on enhancing productivity and the customer experience. As our founders often said, when we operate clean, bright, and inviting stores, our customers win and Dollar Tree wins. Finally, because our model enables us to help our customer better navigate uncertain times, Dollar Tree has, in the past, become more relevant in tougher economic environments. This may prove an added tailwind over the quarters ahead.

Speaker #3: Finally, because our model enables us to help our customer better navigate uncertain times, Dollar Tree has in the past become more relevant and tougher economic environments.

Speaker #3: This may prove an added tailwind over the quarters ahead. Taken together, we believe these efforts support improved trip frequency, broader customer engagement across shopping occasions, and a more consistent experience that should help us earn that next visit.

Speaker #3: Fourth, we'll continue improving the experience through disciplined store refreshes and renovations focused on enhancing productivity and the customer experience. As our founders often said, when we operate clean, bright, and inviting stores, our customers win, and Dollar Tree wins.

Speaker #3: When we step back and look at the quarter holistically, a few things are clear. First, we delivered strong operational execution resulting in margin expansion and earnings growth ahead of our outlook.

Michael C. Creedon, Jr.: When we step back and look at the quarter holistically, a few things are clear. First, we delivered strong operational execution resulting in margin expansion and earnings growth ahead of our outlook. Second, the business continues to perform as expected with comp driven by ticket and supported by a stronger assortment. Third, traffic trends remain in line with our expectations following the pricing actions last year. Finally, we are deploying strategies to increase customer frequency. We are encouraged by the progress we are making in profitability and execution, and we remain focused on continuing to build on that momentum. We are operating with discipline, focused on the right priorities, and building a business that is more consistent, more predictable, and better positioned for long-term growth.

Mike Creedon: When we step back and look at the quarter holistically, a few things are clear. First, we delivered strong operational execution resulting in margin expansion and earnings growth ahead of our outlook. Second, the business continues to perform as expected with comp driven by ticket and supported by a stronger assortment. Third, traffic trends remain in line with our expectations following the pricing actions last year. Finally, we are deploying strategies to increase customer frequency. We are encouraged by the progress we are making in profitability and execution, and we remain focused on continuing to build on that momentum. We are operating with discipline, focused on the right priorities, and building a business that is more consistent, more predictable, and better positioned for long-term growth.

Speaker #3: Second, the business continues to perform as expected with comp driven by ticket and supported by a stronger assortment. Third, traffic trends remain in line with our expectations following the pricing actions last year and finally, we are deploying strategies to increase customer frequency.

Speaker #3: Finally, because our model enables us to help our customer better navigate uncertain times, Dollar Tree has in the past become more relevant in tougher economic environments.

Michael Creedon: Taken together, we believe these efforts support improved trip frequency, broader customer engagement across shopping occasions, and a more consistent experience that should help us earn that next visit. When we step back and look at the quarter holistically, a few things are clear. First, we delivered strong operational execution resulting in margin expansion and earnings growth ahead of our outlook. Second, the business continues to perform as expected with comp driven by ticket and supported by a stronger assortment. Third, traffic trends remain in line with our expectations following the pricing actions last year. Finally, we are deploying strategies to increase customer frequency. We are encouraged by the progress we are making in profitability and execution, and we remain focused on continuing to build on that momentum.

Mike Creedon: Taken together, we believe these efforts support improved trip frequency, broader customer engagement across shopping occasions, and a more consistent experience that should help us earn that next visit. When we step back and look at the quarter holistically, a few things are clear. First, we delivered strong operational execution resulting in margin expansion and earnings growth ahead of our outlook. Second, the business continues to perform as expected with comp driven by ticket and supported by a stronger assortment. Third, traffic trends remain in line with our expectations following the pricing actions last year. Finally, we are deploying strategies to increase customer frequency. We are encouraged by the progress we are making in profitability and execution, and we remain focused on continuing to build on that momentum.

Speaker #3: We are encouraged by the progress we are making in profitability and execution, and we remain focused on continuing to build on that momentum. We are operating with discipline, focused on the right priorities, and building a business that is more consistent, more predictable, and better positioned for long-term growth.

Speaker #3: When we step back and look at the quarter holistically, a few things are clear. First, we delivered strong operational execution, resulting in margin expansion and earnings growth ahead of our outlook.

Speaker #3: As we look ahead, our focus remains on continuing to execute against the priorities we have outlined. While remaining responsive to the external environment and aligned with the needs of the customer.

Michael C. Creedon, Jr.: As we look ahead, our focus remains on continuing to execute against the priorities we have outlined while remaining responsive to the external environment and aligned with the needs of the customer. We believe our work today builds a stronger foundation for the future and positions us well for sustainable growth over time. Importantly, we believe Q1 serves as another proof point that the actions we are taking across assortment, operations, and execution are driving strong financial performance. We are building a more relevant assortment, delivered through more consistently well-run stores, informed by deeper engagement with customers, and a better understanding of how they shop Dollar Tree. With that, I'll turn it over to Stewart to walk through the financial details.

Mike Creedon: As we look ahead, our focus remains on continuing to execute against the priorities we have outlined while remaining responsive to the external environment and aligned with the needs of the customer. We believe our work today builds a stronger foundation for the future and positions us well for sustainable growth over time. Importantly, we believe Q1 serves as another proof point that the actions we are taking across assortment, operations, and execution are driving strong financial performance. We are building a more relevant assortment, delivered through more consistently well-run stores, informed by deeper engagement with customers, and a better understanding of how they shop Dollar Tree. With that, I'll turn it over to Stewart to walk through the financial details.

Speaker #3: We believe our work today builds a stronger foundation for the future and positions us well for sustainable growth over time. Importantly, we believe the first quarter serves as another proof point that the actions we are taking across assortment, operations, and execution are driving strong financial performance.

Speaker #3: We are encouraged by the progress we are making in profitability and execution and we remain focused on continuing to build on that momentum. We are operating with discipline, focused on the right priorities, and building a business that is more consistent, more predictable, and better positioned for long-term growth.

Speaker #3: We are building a more relevant assortment, delivered through more consistently well-run stores, informed by deeper engagement with customers, and a better understanding of how they shop Dollar Tree.

Michael Creedon: We are operating with discipline, focused on the right priorities, and building a business that is more consistent, more predictable, and better positioned for long-term growth. As we look ahead, our focus remains on continuing to execute against the priorities we have outlined while remaining responsive to the external environment and aligned with the needs of the customer. We believe our work today builds a stronger foundation for the future and positions us well for sustainable growth over time. Importantly, we believe Q1 serves as another proof point that the actions we are taking across assortment, operations, and execution are driving strong financial performance. We are building a more relevant assortment delivered through more consistently well-run stores, informed by deeper engagement with customers and a better understanding of how they shop Dollar Tree. With that, I'll turn it over to Stewart to walk through the financial details.

Mike Creedon: We are operating with discipline, focused on the right priorities, and building a business that is more consistent, more predictable, and better positioned for long-term growth. As we look ahead, our focus remains on continuing to execute against the priorities we have outlined while remaining responsive to the external environment and aligned with the needs of the customer. We believe our work today builds a stronger foundation for the future and positions us well for sustainable growth over time. Importantly, we believe Q1 serves as another proof point that the actions we are taking across assortment, operations, and execution are driving strong financial performance. We are building a more relevant assortment delivered through more consistently well-run stores, informed by deeper engagement with customers and a better understanding of how they shop Dollar Tree. With that, I'll turn it over to Stewart to walk through the financial details.

Speaker #3: With that, I'll turn it over to Stewart to walk through the financial details.

Speaker #2: Thank you, Mike, and good morning, everyone. For the first quarter of fiscal 2026, Dollar Tree delivered strong results across the P&L. Traffic trends improved, and we drove operating margin expansion and grew adjusted earnings per share 38% year over year to $1.74.

Stewart Glendinning: Thank you, Mike. Good morning, everyone. For Q1 of fiscal 2026, Dollar Tree delivered strong results across the P&L. Traffic trends improved, and we drove operating margin expansion and grew adjusted earnings per share 38% year-over-year to $1.74. This result was ahead of our outlook range. Let me walk you through the details and then discuss our updated outlook. Q1 net sales increased 7.2% to $5 billion, driven by a 3.5% increase in comparable store sales and a 3.7% contribution from net new store growth. In line with our expectations, comps were driven by a 4.5% increase in average ticket on the back of last year's pricing actions and higher multi-price penetration. Traffic was down 1%, also in line with our expectations. By category, consumables increased 3.2%, while discretionary delivered a 3.9% comp with notable strength in toys and personal care.

Speaker #2: This result was ahead of our outlook range. Let me walk you through the details and then discuss our updated outlook. First quarter net sales increased 7.2% to $5 billion, driven by a 3.5% increase in comparable store sales and a 3.7% contribution from net new store growth.

Speaker #2: In line with our expectations, comps were driven by a 4.5% increase in average ticket on the back of last year's pricing actions and higher multi-price penetration.

Speaker #3: With that, I'll turn it over to Stewart to walk through the financial details.

Speaker #2: Thank you, Mike, and good morning, everyone. For the first quarter of fiscal 2026, DOLLAR TREE delivered strong results across the P&L. Traffic trends improved and we drove operating margin expansion and grew adjusted earnings per share 38% year over year to $1.74.

Stewart Glendinning: Thank you, Mike, and good morning, everyone. For Q1 of fiscal 2026, Dollar Tree delivered strong results across the P&L. Traffic trends improved, and we drove operating margin expansion and grew adjusted earnings per share 38% year-over-year to $1.74. This result was ahead of our outlook range. Let me walk you through the details and then discuss our updated outlook. Q1 net sales increased 7.2% to $5 billion, driven by a 3.5% increase in comparable store sales and a 3.7% contribution from net new store growth. In line with our expectations, comps were driven by a 4.5% increase in average ticket on the back of last year's pricing actions and higher multi-price penetration. Traffic was down 1%, also in line with our expectations. By category, consumables increased 3.2%, while discretionary delivered a 3.9% comp with notable strength in toys and personal care.

Speaker #2: Traffic was down 1%, also in line with our expectations. By category, consumables increased 3.2%, while discretionary delivered a 3.9% comp with notable strength in toys and personal care.

Speaker #2: Gross margin expanded 120 basis points year over year, driven primarily by higher merchandise margin, freight favorability, and lower shrink. These benefits were partially offset by higher tariffs and markdowns.

Stewart Glendinning: Gross margin expanded 120 basis points year-over-year, driven primarily by higher merchandise margin, freight favorability, and lower shrink. These benefits were partially offset by higher tariffs and markdowns. Moving down the P&L, total SG&A, inclusive of TSA income, delevered 10 basis points, driven by increased investments in marketing, higher general liability costs, and higher depreciation expense, partially offset by TSA income and lower payroll expenses. We continue to make progress on growing total SG&A in line with the rate of sales growth. Even after factoring in the impact from incremental marketing investments and higher general liability costs, SG&A growth inclusive of TSA income was largely in line with sales growth. Let me take a moment to briefly address corporate SG&A. After the sale of Family Dollar, a separate corporate segment is no longer needed.

Speaker #2: Moving down the P&L, total SG&A inclusive of TSA income delivered 10 basis points, driven by increased investments in marketing, higher general liability costs, and higher depreciation expense, partially offset by TSA income and lower payroll expenses.

Speaker #2: In line with our expectations, comps were driven by a 4.5% increase in average ticket on the back of last year’s pricing actions and higher multi-price penetration.

Speaker #2: We continue to make progress on growing total SG&A in line with the rate of sales growth. Even after factoring in the impact from incremental marketing investments and higher general liability costs, SG&A growth inclusive of TSA income was largely in line with sales growth.

Stewart Glendinning: Gross margin expanded 120 basis points year-over-year, driven primarily by higher merchandise margin, freight favorability, and lower shrink. These benefits were partially offset by higher tariffs and markdowns. Moving down the P&L, total SG&A inclusive of TSA income delevered 10 basis points, driven by increased investments in marketing, higher general liability costs, and higher depreciation expense, partially offset by TSA income and lower payroll expenses. We continue to make progress on growing total SG&A in line with the rate of sales growth. Even after factoring in the impact from incremental marketing investments and higher general liability costs, SG&A growth inclusive of TSA income was largely in line with sales growth. Let me take a moment to briefly address corporate SG&A. After the sale of Family Dollar, a separate corporate segment is no longer needed.

Speaker #2: Let me take a moment to briefly address corporate SG&A. After the sale of Family Dollar, a separate corporate segment is no longer needed. However, so you can track our progress, we will continue to provide the breakout of corporate SG&A through the fourth quarter of this fiscal year.

Speaker #2: Moving down the P&L, total SG&A inclusive of TSA income delivered 10 basis points driven by increased investments in marketing, higher general liability costs, and higher depreciation expense, partially offset by TSA income and lower payroll expenses.

Stewart Glendinning: So you can track our progress, we will continue to provide the breakout of corporate SG&A through Q4 of this fiscal year. Starting in Q1 of 2027, we intend to report one total SG&A line only. With that said, Q1 corporate SG&A, inclusive of TSA income, declined 15% year-over-year and levered 70 basis points to 2.4% of total revenue. Taken together, adjusted operating margin expanded 110 basis points to 9.5%, and adjusted operating income dollars increased 22% year-over-year. Below the operating line, net interest expense and tax rate were in line with our expectations, while the average diluted share count was modestly favorable. Adjusted diluted earnings per share increased 38% to $1.74. Turning to the balance sheet, inventory declined 9% versus the prior year, while sales increased 7.2%, resulting in a favorable inventory-to-sales spread.

Speaker #2: But starting in the first quarter of 2027, we intend to report one total SG&A line only. With that said, Q1 corporate SG&A inclusive of TSA income declined 15% year over year and levered 70 basis points to 2.4% of total revenue.

Speaker #2: Taken together, adjusted operating margin expanded 110 basis points to 9.5%, and adjusted operating income dollars increased 22% year over year. Below the operating line, net interest expense and tax rate were in line with our expectations, while the average diluted share count was modestly favorable.

Stewart Glendinning: However, so you can track our progress, we will continue to provide the breakout of corporate SG&A through the Q4 of this fiscal year. Starting in the Q1 of 2027, we intend to report one total SG&A line only. With that said, Q1 corporate SG&A, inclusive of TSA income, declined 15% year-over-year and levered 70 basis points to 2.4% of total revenue. Taken together, adjusted operating margin expanded 110 basis points to 9.5%, and adjusted operating income dollars increased 22% year-over-year. Below the operating line, net interest expense and tax rate were in line with our expectations, while the average diluted share count was modestly favorable. Adjusted diluted earnings per share increased 38% to $1.74. Turning to the balance sheet, inventory declined 9% versus the prior year, while sales increased 7.2%, resulting in a favorable inventory-to-sales spread.

Speaker #2: Adjusted diluted earnings per share increased 38% to $1.74. Turning to the balance sheet, inventory declined 9% versus the prior year, while sales increased 7.2%, resulting in a favorable inventory-to-sales spread.

Speaker #2: Our continued focus on improving inventory turns supports fresher assortments for our customers, working capital efficiency, and stronger free cash flow generation. We ended the quarter with $1 billion in cash and no commercial paper outstanding.

Stewart Glendinning: Our continued focus on improving inventory turns supports fresher assortments for our customers, working capital efficiency, and stronger free cash flow generation. We ended the Q1 with $1 billion in cash and no commercial paper outstanding. We generated $644 million in cash from operations and invested $253 million in capital expenditures, resulting in free cash flow of $392 million. During the Q1, we repurchased about 5.5 million shares for $595 million. Subsequent to Q1 end and as of today, we repurchased a further $98 million of stock. Looking back over the past 12 months, we’ve reduced our share count by approximately 8% and returned $1.7 billion to investors through share repurchases. Before I share our Q2 outlook and updated expectations for fiscal 2026, I would like to start by talking to you about our tariff rate assumptions.

Speaker #2: We generated $644 million in cash from operations and invested $253 million in capital expenditures, resulting in free cash flow of $392 million. During the quarter, we repurchased about $5.5 million shares for $595 million.

Speaker #2: While the average diluted share count was modestly favorable. Adjusted diluted earnings per share increased 38% to $1.74. Turning to the balance sheet, inventory declined 9% versus the prior year, while sales increased 7.2% resulting in a favorable inventory-to-sales spread.

Speaker #2: Subsequent to quarter end and as of today, we repurchased a further $98 million of stock. Looking back over the past 12 months, we've reduced our share count by approximately 8% and returned 1.7 billion to investors through share repurchases.

Speaker #2: Our continued focus on improving inventory turns supports fresher assortments for our customers working capital efficiency and stronger free cash flow generation. We ended the quarter with $1 billion in cash and no commercial paper outstanding.

Stewart Glendinning: Our continued focus on improving inventory turns supports fresher assortments for our customers, working capital efficiency, and stronger free cash flow generation. We ended the quarter with $1 billion in cash and no commercial paper outstanding. We generated $644 million in cash from operations and invested $253 million in capital expenditures, resulting in free cash flow of $392 million. During the quarter, we repurchased about 5.5 million shares for $595 million. Subsequent to quarter end and as of today, we repurchased a further $98 million of stock. Looking back over the past 12 months, we've reduced our share count by approximately 8% and returned $1.7 billion to investors through share repurchases. Before I share our Q2 outlook and updated expectations for fiscal 2026, I would like to start by talking to you about our tariff rate assumptions.

Speaker #2: Before I share our second quarter outlook and updated expectations for fiscal 2026, I would like to start by talking to you about our tariff rate assumptions.

Speaker #2: We are closely monitoring the tariff environment, and we're taking a prudent approach to our outlook. Consistent with last quarter, we are assuming that the current tariff rates remain in place through July, and then increase in the back half of the year to the levels predating the February 20th Supreme Court decision.

Stewart Glendinning: We are closely monitoring the tariff environment, and we're taking a prudent approach to our outlook. Consistent with last quarter, we are assuming that the current tariff rates remain in place through July and then increase in the back half of the year to the levels predating the 20 February Supreme Court decision. Additionally, we've not included any tariff refunds in the outlook. Turning to our updated outlook for the year, we expect net sales in the range of $20.5 billion to $20.7 billion, reflecting comparable store sales growth of 3% to 4%. Given the stronger Q1 performance, lower tariffs for part of the year, higher fuel costs driven by the current macro environment, and lower share count following our repurchases, we now expect adjusted diluted earnings per share in the range of $6.70 to $7.10.

Speaker #2: Subsequent to quarter end and as of today, we have repurchased a further $98 million of stock. Looking back over the past 12 months, we've reduced our share count by approximately 8% and returned $1.7 billion to investors through share repurchases.

Speaker #2: Additionally, we've not included any tariff refunds in the outlook. Turning to our updated outlook for the year, we expect net sales in the range of $20.5 billion to $20.7 billion.

Speaker #2: Reflecting comparable store sales growth of 3 to 4 percent. Given the stronger first quarter performance, lower tariffs for part of the year, higher fuel costs driven by the current macro environment, and lower share count following our repurchases, we now expect adjusted diluted earnings per share in the range of $6.70 to $7.10.

Speaker #2: Before I share our second quarter outlook and updated expectations for fiscal 2026, I would like to start by talking to you about our tariff rate assumptions.

Speaker #2: We are closely monitoring the tariff environment and we're taking a prudent approach to our outlook. Consistent with last quarter, we are assuming that the current tariff rates remain in place through July and then increase in the back half of the year to the levels predating the February 20th Supreme Court decision.

Stewart Glendinning: We are closely monitoring the tariff environment. We're taking a prudent approach to our outlook. Consistent with last quarter, we are assuming that the current tariff rates remain in place through July and then increase in H2 of the year to the levels predating the February 20th Supreme Court decision. Additionally, we've not included any tariff refunds in the outlook. Turning to our updated outlook for the year, we expect net sales in the range of $20.5 to 20.7 billion, reflecting comparable store sales growth of 3% to 4%. Given the stronger Q1 performance, lower tariffs for part of the year, higher fuel costs driven by the current macro environment, and lower share count following our repurchases, we now expect adjusted diluted EPS in the range of $6.70 to 7.10.

Speaker #2: Note that this outlook incorporates an outstanding share count of 194 million shares, which reflects share repurchases through today's date. Turning to the second quarter, we expect net sales in the range of $4.8 billion to $4.9 billion, reflecting comparable sales store growth of 2.5% to 3.5%.

Stewart Glendinning: Note that this outlook incorporates an outstanding share count of 194 million shares, which reflects share repurchases through today's date. Turning to Q2, we expect net sales in the range of $4.8 billion to $4.9 billion, reflecting comparable sales store growth of 2.5% to 3.5%. Adjusted diluted earnings per share are expected to be in the range of $1 to $1.15. In closing, we are encouraged by the start to the year, and we believe we're well-positioned to deliver consistent, profitable growth and to create long-term shareholder value. With that, I'll turn the call over to Mike.

Speaker #2: Additionally, we've not included any tariff refunds in the outlook. Turning to our updated outlook for the year, we expect net sales in the range of $20.5 billion to $20.7 billion.

Speaker #2: Reflecting comparable store sales growth of 3% to 4%. Given the stronger first quarter performance, lower tariffs for part of the year, higher fuel costs driven by the current macro environment, and lower share count following our repurchases, we now expect adjusted diluted earnings per share in the range of $6.70 to $7.10.

Speaker #2: Adjusted diluted earnings per share are expected to be in the range of $1 to $1.15. In closing, we are encouraged by the start to the year, and we believe we're well positioned to deliver consistent long-term shareholder value.

Speaker #2: With that, I'll turn the call over to Mike.

Speaker #1: Thanks, Stuart. We delivered a strong start to the year, with improved execution driving margin expansion and earnings ahead of expectations. The business is performing well, and we're seeing good progress in the areas we control.

Michael C. Creedon, Jr.: Thanks, Stewart. We delivered a strong start to the year, with improved execution driving margin expansion and earnings ahead of expectations.

Mike Creedon: Thanks, Stewart. We delivered a strong start to the year, with improved execution driving margin expansion and earnings ahead of expectations.

Stewart Glendinning: Note that this outlook incorporates an outstanding share count of 194 million shares, which reflects share repurchases through today's date. Turning to the Q2, we expect net sales in the range of $4.8 billion to $4.9 billion, reflecting comparable sales store growth of 2.5% to 3.5%. Adjusted diluted EPS are expected to be in the range of $1 to $1.15. In closing, we are encouraged by the start to the year, and we believe we're well-positioned to deliver consistent, profitable growth and to create long-term shareholder value. With that, I'll turn the call over to Mike.

Michael C. Creedon, Jr.: The business is performing well, and we're seeing good progress in the areas we control. As we look ahead, our focus remains on disciplined execution, driving strong financial performance, and staying flexible in an uncertain environment. At Dollar Tree, we're building a stronger, more resilient business positioned for consistent profitable growth. With that, we're happy to take your questions.

Mike Creedon: The business is performing well, and we're seeing good progress in the areas we control. As we look ahead, our focus remains on disciplined execution, driving strong financial performance, and staying flexible in an uncertain environment. At Dollar Tree, we're building a stronger, more resilient business positioned for consistent profitable growth. With that, we're happy to take your questions.

Speaker #1: As we look ahead, our focus remains on disciplined execution, driving strong financial performance, and staying flexible in an uncertain environment. At Dollar Tree, we're building a stronger, more resilient business positioned for consistent profitable growth.

Speaker #2: Reflecting comparable store sales growth of 2.5% to 3.5%. Adjusted diluted earnings per share are expected to be in the range of $1.00 to $1.15.

Speaker #2: In closing, we are encouraged by the start to the year and we believe we're well positioned to deliver consistent profitable growth and to create long-term shareholder value.

Speaker #1: And with that, we're happy to take your questions.

Speaker #3: Thank you. And without conducting a question-and-answer session, if you'd like to be placed in the question queue, please press star one on your telephone keypad.

Operator: Thank you. We'll now be conducting a question and answer session. If you'd like to be placed into the question queue, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing star one. As a reminder, we ask you please ask one question and one follow-up, then return to the queue. Our first question today is coming from Matthew Boss from JPMorgan. Your line is now live.

Speaker #2: With that, I'll turn the call over to Mike.

Speaker #1: Thanks, Stuart. We delivered a strong start to the year, with improved execution driving margin expansion and earnings ahead of expectations. The business is performing well and we're seeing good progress in the areas we control.

Michael Creedon: Thanks, Stuart. We delivered a strong start to the year, with improved execution driving margin expansion and earnings ahead of expectations. The business is performing well, we're seeing good progress in the areas we control.

Mike Creedon: Thanks, Stuart. We delivered a strong start to the year, with improved execution driving margin expansion and earnings ahead of expectations. The business is performing well, we're seeing good progress in the areas we control.

Speaker #3: A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue.

Speaker #3: For participants using speaker equipment, it may be necessary to pick up your handset before pressing star one. As a reminder, we ask that you please ask one question in one follow-up that returns to the queue.

Speaker #1: As we look ahead, our focus remains on strong financial performance and staying flexible in an uncertain environment. At DOLLAR TREE, we're building a stronger, more resilient business positioned for consistent profitable growth.

Michael Creedon: As we look ahead, our focus remains on disciplined execution, driving strong financial performance, and staying flexible in an uncertain environment. At Dollar Tree, we're building a stronger, more resilient business positioned for consistent profitable growth. With that, we're happy to take your questions.

Mike Creedon: As we look ahead, our focus remains on disciplined execution, driving strong financial performance, and staying flexible in an uncertain environment. At Dollar Tree, we're building a stronger, more resilient business positioned for consistent profitable growth. With that, we're happy to take your questions.

Speaker #3: Our first question today is coming from Matthew Boss from JPMorgan. Your line is now live.

Speaker #4: Great. Thanks, and congrats on a nice quarter.

Matthew Boss: Great, thanks, and congrats on a nice quarter.

Speaker #1: Thanks, Pat.

Speaker #4: So maybe first, could you walk us through drivers of the first quarter beat relative to your outlook from back in March? How much of it was related to lower tariff rates?

Michael C. Creedon, Jr.: Thanks, Matt.

Mike Creedon: Thanks, Matt.

Matthew Boss: Maybe first, could you walk us through drivers of the Q1 beat relative to your outlook from back in March? How much of it was related to lower tariff rates, and can you give us a sense of the impact from higher fuel in the quarter? I have a follow-up.

Speaker #1: And with that, we're happy to take your questions.

Speaker #2: Thank you. And without conducting a question and answer session, if you'd like to be placed in the question queue, please press star one on your telephone keypad.

Michael Creedon: Thank you. We will now be conducting a question and answer session. If you would like to be placed into question queue, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to withdraw your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing star one. As a reminder, we ask you please ask one question and one follow-up, then return to the queue. Our first question today is coming from Matthew Boss from J.P. Morgan. Your line is now live.

Operator: Thank you. We will now be conducting a question and answer session. If you would like to be placed into question queue, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to withdraw your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing star one. As a reminder, we ask you please ask one question and one follow-up, then return to the queue. Our first question today is coming from Matthew Boss from J.P. Morgan. Your line is now live.

Speaker #4: And can you give us a sense of the impact from higher fuel in the quarter? And then I have a follow-up.

Speaker #2: A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue.

Speaker #1: Yeah, Matt. Before Stuart jumps in, this was a really strong top-line quarter for Dollar Tree. When you think about the setup, I mean, we delivered a 3.5 comp on a tough compare and overcame the unfavorable Easter calendar shift.

Michael C. Creedon, Jr.: Yeah, Matt, before Stewart jumps in, this was a really strong top-line quarter for Dollar Tree. When you think about the setup, we delivered a 3.5 comp on a tough compare and overcame the unfavorable Easter calendar shift. To us, this just speaks to the underlying strength of the business and the operational improvements we continue to see. Thank you to our Dollar Tree associates. They just absolutely love delivering this magic to our customers and helping our core customers get through this present time. Stewart, you want to talk about the margins?

Mike Creedon: Yeah, Matt, before Stewart jumps in, this was a really strong top-line quarter for Dollar Tree. When you think about the setup, we delivered a 3.5 comp on a tough compare and overcame the unfavorable Easter calendar shift. To us, this just speaks to the underlying strength of the business and the operational improvements we continue to see. Thank you to our Dollar Tree associates. They just absolutely love delivering this magic to our customers and helping our core customers get through this present time. Stewart, you want to talk about the margins?

Speaker #2: For participants using speaker equipment, it may be necessary to pick up your handset before pressing star one. As a reminder, we ask that you please ask one question and one follow-up, then return to the queue.

Speaker #1: To us, this just speaks to the underlying strength of the business and the operational improvements we continue to see. So thank you to our Dollar Tree associates.

Speaker #2: Our first question today is coming from Matthew Boss from JPMorgan. Your line is now live.

Speaker #3: Great. Thanks and congrats on a nice quarter. And so maybe first, could you walk us through drivers of the first quarter beat relative to your outlook from back in March?

Matthew Boss: Great, thanks, and congrats on a nice quarter.

Speaker #1: They just absolutely loved delivering this magic to our customers, and helping our core customers get through this present time. So Stuart, you want to talk about the margins?

Michael Creedon: Thanks, Matt.

Mike Creedon: Thanks, Matt.

Speaker #4: Yeah, thanks, Mike. Good morning, Matt. If you looked at the quarter and our performance relative to expectations, I mean, the two big drivers here, the biggest driver was shrink.

Speaker #3: How much of it was related to lower tariff rates? And can you give us a sense of the impact from higher fuel in the quarter?

Stewart Glendinning: Thanks, Mike. Good morning, Matt. If you looked at the quarter and our performance relative to expectations, there's two big drivers here. The biggest driver was shrink, obviously a great performance. We said we would take action there, and we have. The other drivers, we had favorable freight relative to our assumptions and then some contribution from margin as well. If you take those together, that's 120 basis points of gross margin expansion. As Mike highlighted in his prepared remarks, we're really pleased, and we're pleased because the kinds of changes that we saw here were really driven by operating actions. Tariffs, while they were a year-over-year headwind, were really offset by our five lever actions, so they weren't really a factor in this quarter at all. Just for absolute clarity, we had no tariff refunds in this gross margin number for this quarter as well.

Speaker #3: And then I have a follow-up.

Speaker #4: Obviously, a great performance. We said we would take action there, and we have. But the other drivers, we had favorable freight relative to our assumptions.

Speaker #4: Yeah, Matt. Before Stuart jumps in, this was a really strong top-line quarter for DOLLAR TREE. When you think about the setup, I mean, we delivered a 3.5 comp on a tough compare and overcame the unfavorable Easter calendar shift.

Michael Creedon: Yeah, Matt, before Stewart jumps in, this was a really strong top-line quarter for Dollar Tree. When you think about the setup, we delivered a 3.5% comp on a tough compare and overcame the unfavorable Easter calendar shift. To us, this just speaks to the underlying strength of the business and the operational improvements we continue to see. Thank you to our Dollar Tree associates. They just absolutely love delivering this magic to our customers and helping our core customers get through this present time. Stewart, you want to talk about the margins?

Mike Creedon: Yeah, Matt, before Stewart jumps in, this was a really strong top-line quarter for Dollar Tree. When you think about the setup, we delivered a 3.5% comp on a tough compare and overcame the unfavorable Easter calendar shift. To us, this just speaks to the underlying strength of the business and the operational improvements we continue to see. Thank you to our Dollar Tree associates. They just absolutely love delivering this magic to our customers and helping our core customers get through this present time. Stewart, you want to talk about the margins?

Speaker #4: And then some contribution from merchant margin as well. If you take those together, that's the $120 basis points of gross margin expansion. As Mike highlighted, in his prepared remarks, we're really pleased, and we're pleased because the kinds of changes that we saw here were really driven by operating actions.

Speaker #4: To us, this just speaks to the underlying strength of the business and the operational improvements we continue to see. So, thank you to our Dollar Tree associates.

Speaker #4: They just absolutely loved delivering this magic to our customers and helping our core customers get through this present time. So, Stuart, you want to talk about the margins?

Speaker #4: Tariffs, while they were year-over-year headwind, were really offset by our five-lever actions. So they weren't really a factor in this quarter at all. And just for absolute clarity, we had no tariff refunds in this gross margin number for this quarter as well.

Speaker #3: Yeah, thanks, Mike. Good morning, Matt. If you looked at the quarter and our performance relative to expectations, I mean, the two big drivers here, the biggest driver was shrink.

Stewart Glendinning: Thanks, Michael Creedon. Good morning, Matthew Boss. If you looked at the quarter and our performance relative to expectations, there's two big drivers here. The biggest driver was shrink. Obviously, a great performance. We said we would take action there, and we have. The other drivers, we had favorable freight relative to our assumptions, and then some contribution from merch margin as well. If you take those together, that's the 120 basis points of gross margin expansion. As Michael Creedon highlighted in his prepared remarks, we're really pleased, and we're pleased because the kinds of changes that we saw here were really driven by operating actions. Tariffs, while they were a year-over-year headwind, were really offset by our five lever actions, so they weren't really a factor in this quarter at all.

Speaker #3: Obviously, a great performance. We said we would take action there and we have. But the other drivers, we had favorable freight relative to our assumptions and then some contribution from merchant margin as well.

Speaker #4: On your question about fuel, there was some sort of small volatility in the quarter, but it really wasn't a factor so much this quarter because of the timing of the conflict and the increases in the fuel rates.

Stewart Glendinning: On your question about fuel, there was some sort of small volatility in the quarter, but it really wasn't a factor so much this quarter because of the timing of the conflict and the increases in the fuel rates. We'll start to see that coming in the back part of the year.

Speaker #3: If you take those together, that's the 120 basis points of gross margin expansion. As Mike highlighted in his prepared remarks, we're really pleased, and we're pleased because the kinds of changes that we saw here were really driven by operating actions.

Speaker #4: We'll start to see that coming in the back part of the year. Great. And then as a follow-up, could you maybe speak to the progression of comps and traffic in the quarter?

Matthew Boss: Great. As a follow-up, could you maybe speak to the progression of comps and traffic in the quarter? If you could give us some more color on the Easter performance, if you could just speak to how the comp is trending quarter to date, I think that would be really helpful.

Speaker #4: And if you could give us some more color on the Easter performance. And then if you could just speak to how the comp is trending quarter to date, I think that would be really helpful.

Speaker #3: Tariffs, while they were year-over-year headwind, were really offset by our five-leaver actions. So they weren't really a factor in this quarter at all. And just for absolute clarity, we had no tariff refunds in this gross margin number for this quarter as well.

Speaker #1: Sure, Matt. You're probably speaking traffic was in line with our expectations. We saw that 20 bip improvement versus Q4. And on a two-year basis, we saw meaningful acceleration versus Q4.

Michael C. Creedon, Jr.: Sure, Matt. Broadly speaking, traffic was in line with our expectations. We saw that 20 bip improvement versus Q4. On a two-year basis, we saw meaningful acceleration versus Q4. We were happy to see that. The comp was strong, trended in line with expectations, and I really liked the strength in both discretionary at a 3.9% and consumables at a 3.2%. For Easter, it was an expected headwind. Two weeks fewer selling moves it up into the worst weather part of the month. Seeing a customer that's shopping so much closer to need, those days matter. The underlying was really good at Easter, with record sales in the final days of Easter. With the quarter to date, we don't quantify inter-quarter trends. Our comp performance informs our Q2 outlook, which we are very comfortable with.

Mike Creedon: Sure, Matt. Broadly speaking, traffic was in line with our expectations. We saw that 20 bip improvement versus Q4. On a two-year basis, we saw meaningful acceleration versus Q4. We were happy to see that. The comp was strong, trended in line with expectations, and I really liked the strength in both discretionary at a 3.9% and consumables at a 3.2%. For Easter, it was an expected headwind. Two weeks fewer selling moves it up into the worst weather part of the month. Seeing a customer that's shopping so much closer to need, those days matter. The underlying was really good at Easter, with record sales in the final days of Easter. With the quarter to date, we don't quantify inter-quarter trends. Our comp performance informs our Q2 outlook, which we are very comfortable with.

Stewart Glendinning: Just for absolute clarity, we had no tariff refunds in this gross margin number for this quarter as well. On your question about fuel, there was some sort of small volatility in the quarter, but it really wasn't a factor so much this quarter because of the timing of the conflict and the increases in the fuel rates. We'll start to see that coming in the back part of the year.

Speaker #3: On your question about fuel, there was some sort of small volatility in the quarter, but it really wasn't a factor so much this quarter because of the timing of the conflict and the increases in the fuel rates.

Speaker #1: So we were happy to see that. The comp was strong. Trended in line with expectations. And I really liked the strength in both discretionary at a 3.9 and consumables at a 3.2.

Speaker #3: We'll start to see that coming in the back part of the year.

Speaker #2: Great. And then as a follow-up, could you maybe speak to the progression of comps and traffic in the quarter? And if you could give us some more color on the Easter performance.

Matthew Boss: Great. As a follow-up, could you maybe speak to the progression of comps and traffic in the quarter? If you could give us some more color on the Easter performance, and if you could just speak to how the comp is trending quarter to date, I think that would be really helpful.

Speaker #1: For Easter, it was an expected headwind. Two weeks fewer selling, moves it up into the worst weather part of the month. And seeing a customer that's shopping so much closer to need those days matter.

Speaker #2: And then if you could just speak to how the comp is trending quarter to date, I think that would be really helpful.

Speaker #4: Sure, Matt. Broadly speaking, traffic was in line with our expectations. We saw that 20-bit improvement versus Q4. And on a two-year basis, we saw meaningful acceleration versus Q4.

Michael Creedon: Sure, Matt. Broadly speaking, traffic was in line with our expectations. We saw that 20 bip improvement versus Q4. On a two-year basis, we saw meaningful acceleration versus Q4. We were happy to see that. The comp was strong, trended in line with expectations, and I really liked the strength in both discretionary at a 3.9% and consumables at a 3.2%. For Easter, it was an expected headwind. Two weeks fewer selling moves it up into the worst weather part of the month. Seeing a customer that's shopping so much closer to need, those days matter. The underlying was really good at Easter, with record sales in the final days of Easter. With the quarter to date, we don't quantify inter-quarter trends. Our comp performance informs our Q2 outlook, which we are very comfortable with.

Speaker #1: But the underlying was really good at Easter. With record sales in the final days of Easter. With the quarter-to-day, we don't quantify inter-quarter trends.

Speaker #4: So we were happy to see that. The comp was strong. Trended in line with expectations and I really liked the strength in both discretionary at a 3.9 and consumables at a 3.2.

Speaker #1: Our comp performance informs our Q2 outlook. Which we are very comfortable with. I will say we were encouraged by the strength of Mother's Day.

Michael C. Creedon, Jr.: I will say we're encouraged by the strength of Mother's Day, but still so much of the quarter ahead of us, and as I mentioned last call, 2025 was an incredibly strong Q2. I think we've hit the right balance here when I look at that Q2 comp outlook.

Mike Creedon: I will say we're encouraged by the strength of Mother's Day, but still so much of the quarter ahead of us, and as I mentioned last call, 2025 was an incredibly strong Q2. I think we've hit the right balance here when I look at that Q2 comp outlook.

Speaker #1: But still, so much of the quarter ahead of us. And as I mentioned last call, 2025 was an incredibly strong Q2. So I think we've hit the right balance here when I look at that Q2 comp outlook.

Speaker #4: For Easter, it was an expected headwind. Two weeks fewer selling moves it up into the worst weather part of the month. And seeing a customer that's shopping so much closer to need, those days matter.

Speaker #3: Thank you. Our next question is coming from Seth Sigman from Barclays. Your line is now live.

Operator: Thank you. Our next question is coming from Seth Sigman from Barclays. Your line is now live.

Speaker #5: Great. Good morning, everyone. When you look at the guidance for the year, considering the magnitude of the Q1 beat, and then the benefit from share repurchases, which is really more of a benefit on future quarters, it doesn't seem like you're flowing through all of that upside.

Speaker #4: But the underlying was really good at Easter, with record sales in the final days of Easter. With the quarter to date, we don't quantify inter-quarter trends.

Seth Sigman: Great. Good morning, everyone. When you look at the guidance for the year, considering the magnitude of the Q1 beat and then the benefit from share repurchases, which is really more of a benefit on future quarters, it doesn't seem like you're flowing through all of that upside to the full year guidance. Obviously, you're raising it, but not to that extent. Can you just walk us through some of the puts and takes as you think about that updated 2026 guidance? Thank you.

Speaker #4: Our comp performance informs our Q2 outlook. Which we are very comfortable with. I will say we were encouraged by the strength of Mother's Day.

Speaker #5: To the full-year guidance, obviously, you're raising it, but not to that extent. So can you just walk us through some of the puts and takes as you think about that updated 2026 guidance?

Michael Creedon: I will say we're encouraged by the strength of Mother's Day, but still so much of the quarter ahead of us. As I mentioned last call, 2025 was an incredibly strong Q2. I think we've hit the right balance here when I look at that Q2 comp outlook.

Mike Creedon: I will say we're encouraged by the strength of Mother's Day, but still so much of the quarter ahead of us. As I mentioned last call, 2025 was an incredibly strong Q2. I think we've hit the right balance here when I look at that Q2 comp outlook.

Speaker #4: But still, so much of the quarter ahead of us, and as I mentioned last call, 2025 was an incredibly strong Q2. So I think we've hit the right balance here when I look at that Q2 comp outlook.

Speaker #5: Thank you.

Speaker #6: Good morning. Well, thanks for that question. Look, I'll just start by saying we're very happy that the Q1 start was so strong because that reduces some pressure on the back part of the year given the macro uncertainties that are out there.

Stewart Glendinning: Good morning. Well, thanks for that question. Look, I'll just start by saying we're very happy that the Q1 start was so strong because that reduces some pressure on the back part of the year, given the macro uncertainties that are out there. We felt it was appropriate to raise the full-year outlook, but we also wanted to be appropriately balanced and financially prudent given some of the uncertainties that are out there. There are several variables that remain dynamic today, including tariffs, fuel, freight, and just some broader consumer pressure. The updated guidance we've given reflects a more cautious view around some of the transportation and fuel costs relative to where we entered last year. Let me cover a couple of the details.

Speaker #2: Thank you. Our next question is coming from Seth Sigman from Barclays. Your line is now live.

Michael Creedon: Thank you. Our next question is coming from Seth Sigman from Barclays. Your line is now live.

Operator: Thank you. Our next question is coming from Seth Sigman from Barclays. Your line is now live.

Speaker #6: We thought it was appropriate to raise the full-year outlook, but we also wanted to be appropriately balanced and financially prudent given some of the uncertainties that are out there.

Speaker #5: Great. Good morning, everyone. When you look at the guidance for the year, considering the magnitude of the Q1 beat and then the benefit from share repurchases—which is really more of a benefit on future quarters—it doesn't seem like you're flowing through all of that upside.

Speaker #6: And there are several variables that remain dynamic today. Including tariffs, fuel, freight, and just some broader consumer pressure. And the updated guidance we've given reflects a more cautious view around some of the transportation and fuel costs relative to where we entered last year.

Speaker #5: Regarding the full-year guidance, obviously, you're raising it, but not to that extent. So, can you just walk us through some of the puts and takes as you think about that updated 2026 guidance?

Speaker #5: Thank you.

Speaker #6: Good morning. Well, thanks for that question. Look, I'll just start by saying we're very happy that the Q1 start was so strong, because that reduces some pressure on the back part of the year, given the macro uncertainties that are out there.

Stewart Glendinning: Good morning. Well, thanks for that question. Look, I'll just start by saying we're very happy that the Q1 start was so strong because that reduces some pressure on the back part of the year, given the macro uncertainties that are out there. We thought it was appropriate to raise the full-year outlook, but we also wanted to be appropriately balanced and financially prudent given some of the uncertainties that are out there. There are several variables that remain dynamic today, including tariffs, fuel, freight, and just some broader consumer pressure. The updated guidance we've given reflects a more cautious view around some of the transportation and fuel costs relative to where we entered last year. Let me cover a couple of the details.

Speaker #6: So let me cover a couple of the details. First, when we spoke to you last quarter, there was an expectation, I think, of a shorter period of impact related to the conflict in the Middle East.

Stewart Glendinning: First, when we spoke to you last quarter, there was an expectation, I think, of a shorter period of impact related to the conflict in the Middle East, and that has proved not to be the case. Now we're assuming that the higher fuel prices last throughout the year, since we don't know when that conflict will end. We're also assuming that that amount is absorbed by the business. At the same time, we do get some benefit from lower tariffs, which will manifest themselves in Q2 and Q3, but that hasn't really changed from last quarter since we were already expecting that. Our assumption there is that following the statements from the administration, we will revert back to the old tariffs.

Speaker #6: And that has proved not to be the case. And so now we're assuming that the higher fuel prices last throughout the year since we don't know when that conflict will end.

Speaker #6: And we're also assuming that that amount is absorbed by the business. At the same time, we do get some benefit from lower tariffs. Which will manifest themselves in the second and the third quarter.

Speaker #6: But that hasn't really changed from last quarter since we were already expecting that. And our assumption there is that following the statements from the administration, we will revert back to the old tariffs.

Stewart Glendinning: First, when we spoke to you last quarter, there was an expectation, I think, of a shorter period of impact related to the conflict in the Middle East. That has proved not to be the case. Now we're assuming that the higher fuel prices last throughout the year, since we don't know when that conflict will end. We're also assuming that that amount is absorbed by the business. At the same time, we do get some benefit from lower tariffs, which will manifest themselves in Q2 and Q3. That hasn't really changed from last quarter since we were already expecting that. Our assumption there is that following the statements from the administration, we will revert back to the old tariffs.

Speaker #6: So because of those things, and really, if you just step back and said, "What's changed?" The only thing that's changed in this whole assumption is that the increased fuel prices are going to go for longer.

Stewart Glendinning: Because of those things, and really, if you just step back and said, Well, what's changed? The only thing that's changed in this whole assumption is that the increased fuel prices are going to go for longer. We're not flowing that through for the full year. A couple of other things are important in how we constructed that outlook. We did incorporate, I should say, the lower share count for the share repurchases through the day. No assumptions for any share repurchases through the rest of the year, and we're also not assuming any benefit from the potential tariff refunds in the guidance, just given some of the uncertainty about when they will come and the amounts that will be coming. I'll just wrap up by saying, I want you to keep in mind three upsides to the full year.

Speaker #6: And that has proved not to be the case. And so now we're assuming that the higher fuel prices will last throughout the year, since we don't know when that conflict will end.

Speaker #6: So we're not blowing that ball through for the full year. But a couple of other things are important in how we constructed that outlook.

Speaker #6: And we're also assuming that that amount is absorbed by the business. At the same time, we do get some benefit from lower tariffs which will manifest themselves in the second and the third quarter.

Speaker #6: We did increase we did incorporate, I should say, the lower share count for the share repurchases through the day. No assumptions for any share repurchases through the rest of the year.

Speaker #6: And we're also not assuming any benefit from the potential tariff refunds in the guidance just given some of the uncertainty about when they will come and the amounts that will be coming.

Speaker #6: And so I want you to I'll just wrap up by saying I want you to keep in mind three upsides to the full year.

Speaker #6: So because of those things and really, if you just step back and said, "Well, what's changed?" The only thing that's changed in this whole assumption is that the increased fuel prices are going to go for longer.

Stewart Glendinning: Because of those things, and really if you just step back and said, "Well, what's changed?" The only thing that's changed in this whole assumption is that the increased fuel prices are going to go for longer. We're not flowing that through for the full year. A couple of other things are important in how we constructed that outlook. We did incorporate, I should say, the lower share count for the share repurchases through today. No assumptions for any share repurchases through the rest of the year, and we're also not assuming any benefit from the potential tariff refunds in the guidance, just given some of the uncertainty about when they will come and the amounts that will be coming. I'll just wrap up by saying, I want you to keep in mind three upsides to the full year.

Speaker #6: The first one is that the Middle East conflict ends and oil prices drop before year-end. That happens, obviously, we'll take some benefit. Second. The tariffs that are currently in place extend past July.

Stewart Glendinning: The first one is that the Middle East conflict ends and oil prices drop before year-end. That happens, obviously, we'll take some benefit. Second, the tariffs that are currently in place extend past July, then there's the potential for more benefit in the results. The third thing is that once we receive those tariff benefits, if we assume that there's reinvestment in the business, and we do think we will have reinvestment in the business, that those reinvestment benefits could drive the flywheel of our business in a very positive way. Of course, we would intend that to be the case. I think we've taken an approach here which is sensible given the uncertainties, and I think I've outlined some of the things that could give you a bit of upside.

Speaker #6: So we're not flowing that full through for the full year. But a couple of other things are important in how we constructed that outlook.

Speaker #6: Then there's the potential for more benefit in the results. And the third thing is that once we receive those tariff benefits, if we assume that there's reinvestment in the business and we do think we will have reinvestment in the business, that those reinvestment benefits could drive the flywheel of our business in a very positive way.

Speaker #6: We did increase or we did incorporate, I should say, the lower share count for the share repurchases through the day. No assumptions for any share repurchases through the rest of the year.

Speaker #6: And of course, we would intend that to be the case. So I think we've taken an approach here which is sensible given the uncertainties.

Speaker #6: And so I want you to I'll just wrap up by saying I want you to keep in mind three upsides to the full year.

Speaker #6: And I think I've outlined some of the things that could give you a bit of upside.

Speaker #6: The first one is that the Middle East conflict ends and oil prices drop before year-end. That happens, obviously, we'll take some benefit. Second, if the tariffs that are currently in place extend past July, then there's the potential for more benefit in the results.

Stewart Glendinning: The first one is that the Middle East conflict ends and oil prices drop before year-end. That happens, obviously, we'll take some benefit. Second, if the tariffs that are currently in place extend past July, there's the potential for more benefit in the results. The third thing is that once we receive those tariff benefits, if we assume that there's reinvestment in the business, and we do think we will have reinvestment in the business, that those reinvestment benefits could drive the flywheel of our business in a very positive way. Of course, we would intend that to be the case. I think we've taken an approach here, which is sensible given the uncertainties, and I think I've outlined some of the things that could give you a bit of upside.

Speaker #5: Okay. Perfect. That's super helpful. I did want to follow up on traffic. Down 1% this quarter. It seems pretty manageable, especially given some of the history you've seen.

Seth Sigman: Okay, perfect. That's super helpful. I did want to follow up on traffic, down 1% this quarter. It seems pretty manageable, especially given some of the history you've seen. When you look at Q2, difficult compare, do you still feel like traffic can inflect positively in the H2 of the year? The macro backdrop and gas prices are higher, so things do feel a little bit different for the end customer than they did in March. How are you thinking about that inflection in traffic? Thanks so much.

Speaker #5: When you look at Q2, difficult to compare. Do you still feel like traffic can inflect positively in the second half of the year? The macro backdrop and gas prices are higher.

Speaker #6: And the third thing is that once we receive those tariff benefits, if we assume that there's reinvestment in the business and we do think we will have reinvestment in the business, that those reinvestment benefits could drive the flywheel of our business in a very positive way.

Speaker #5: So if things do feel a little bit different for the end customer, than they did in March. So how are you thinking about that inflection in traffic?

Speaker #5: Thanks so much.

Speaker #1: Yeah. Yeah. Thanks. We recognize the macro has changed. And as you just said, and I've said before, Q2 is a robust comparison. But we believe traffic will continue to improve over the course of the year.

Michael C. Creedon, Jr.: Thanks. We recognize the macro has changed, as you just said, and I've said before, Q2 is a robust comparison. We believe traffic will continue to improve over the course of the year. We take confidence in the Q1 improvement versus Q4, despite that earlier Easter, that 200 basis point acceleration on the 2-year, I mean, that's meaningful and that gives us further confidence. You look at the H2, we anniversary several pricing actions in our initiatives that we laid out at Investor Day. They really continue to scale. We get benefit from that. Finally, we're not someone that takes price a lot. If you look at our history, it's rare. The worst day of our pricing is the day we take that pricing.

Mike Creedon: Thanks. We recognize the macro has changed, as you just said, and I've said before, Q2 is a robust comparison. We believe traffic will continue to improve over the course of the year. We take confidence in the Q1 improvement versus Q4, despite that earlier Easter, that 200 basis point acceleration on the 2-year, I mean, that's meaningful and that gives us further confidence. You look at the H2, we anniversary several pricing actions in our initiatives that we laid out at Investor Day. They really continue to scale. We get benefit from that. Finally, we're not someone that takes price a lot. If you look at our history, it's rare. The worst day of our pricing is the day we take that pricing.

Speaker #6: And of course, we would intend that to be the case. So I think we've taken an approach here which is sensible given the uncertainties and I think I've outlined some of the things that could give you a bit of upside.

Speaker #1: We take confidence in the Q1 improvement versus Q4 despite that earlier Easter. And then that 200-bip acceleration on the two-year I mean, that's meaningful.

Speaker #5: Okay, perfect. That's super helpful. I did want to follow up on traffic being down 1% this quarter. It seems pretty manageable, especially given some of the history you've seen.

Seth Sigman: Okay, perfect. That's super helpful. I did want to follow up on traffic, down 1% this quarter. It seems pretty manageable, especially given some of the history you've seen. When you look at Q2, difficult compare, do you still feel like traffic can inflect positively in H2 of the year? The macro backdrop and gas prices are higher, so things do feel a little bit different for the end customer than they did in March. How are you thinking about that inflection in traffic? Thanks so much.

Speaker #1: And that gives us further confidence. And then you look at the back half, we anniversary several pricing actions. In our initiatives that we laid out at Investor Day, they really continue to scale.

Speaker #5: When you look at Q2, it's difficult to compare. Do you still feel like traffic can inflect positively in the second half of the year? The macro backdrop and gas prices are higher.

Speaker #5: So if things do feel a little bit different for the end customer, than they did in March. So how are you thinking about that inflection in traffic?

Speaker #1: So we get benefit from that. And then finally, we're not someone that takes price a lot. If you look at our history, it's rare.

Speaker #5: Thanks so much.

Speaker #6: Yeah, yeah, thanks. We recognize the macro has changed. And as you just said, and I've said before, Q2 is a robust comparison. But we believe traffic will continue to improve over the course of the year.

Michael Creedon: Yeah. Thanks. We recognize the macro has changed, as you just said, I've said before, Q2 is a robust comparison. We believe traffic will continue to improve over the course of the year. We take confidence in the Q1 improvement versus Q4 despite that earlier Easter. That 200 bip acceleration on the two-year, I mean, that's meaningful, that gives us further confidence. You look at the back half, we anniversary several pricing actions in our initiatives that we laid out at Investor Day. They really continue to scale. We get benefit from that. Finally, we're not someone that takes price a lot. If you look at our history, it's rare. The worst day of our pricing is the day we take that pricing.

Mike Creedon: Yeah. Thanks. We recognize the macro has changed, as you just said, I've said before, Q2 is a robust comparison. We believe traffic will continue to improve over the course of the year. We take confidence in the Q1 improvement versus Q4 despite that earlier Easter. That 200 bip acceleration on the two-year, I mean, that's meaningful, that gives us further confidence. You look at the back half, we anniversary several pricing actions in our initiatives that we laid out at Investor Day. They really continue to scale. We get benefit from that. Finally, we're not someone that takes price a lot. If you look at our history, it's rare. The worst day of our pricing is the day we take that pricing.

Speaker #1: And the worst day of our pricing is the day we take that pricing. It's in a 25-cent increment. And then we continue to improve from there as others adjust their own pricing and where at our level.

Michael C. Creedon, Jr.: It's in a $0.25 increment, then we continue to improve from there as others adjust their own pricing and we're at our level. That gives us further confidence. On the macro, sure, customers are under pressure from higher fuel prices, but that also makes them more value-focused. Look back at history. I always talk about that 20 years of positive comps. Periods like this reinforce Dollar Tree's position as a key partner for our customers. One, our outstanding value. Two, we're close to home with an in and out shop. Three, people still want to treat themselves. At Dollar Tree, it's guilt-free treat yourselves because of where our value is and our pricing. That gives us confidence as we look out over the course of the year.

Mike Creedon: It's in a $0.25 increment, then we continue to improve from there as others adjust their own pricing and we're at our level. That gives us further confidence. On the macro, sure, customers are under pressure from higher fuel prices, but that also makes them more value-focused. Look back at history. I always talk about that 20 years of positive comps. Periods like this reinforce Dollar Tree's position as a key partner for our customers. One, our outstanding value. Two, we're close to home with an in and out shop. Three, people still want to treat themselves. At Dollar Tree, it's guilt-free treat yourselves because of where our value is and our pricing. That gives us confidence as we look out over the course of the year.

Speaker #6: We take confidence in the Q1 improvement versus Q4, despite that earlier Easter. And then that 200-bps acceleration on the two-year—I mean, that's meaningful.

Speaker #1: So that gives us further confidence. On the macro, sure. Customers are under pressure from higher fuel prices. But that also makes them more value-focused.

Speaker #6: And that gives us further confidence. And then you look at the back half, we anniversary several pricing actions in our initiatives that we laid out at Investor Day.

Speaker #1: Look back at history. I always talk about that 20 years of positive comps. Periods like this reinforce Dollar Tree's position as a key partner for our customers.

Speaker #6: They really continue to scale, so we get benefit from that. And then, finally, we're not someone that takes price a lot. If you look at our history, it's rare.

Speaker #1: One, our outstanding value. Two, we're close to home. With an in-and-out shop. And three, people still want to treat themselves. And at Dollar Tree, it's guilt-free to treat yourselves because of where our value is and our pricing.

Speaker #6: And the worst day of our pricing is the day we take that pricing. It's in a 25-cent increment. And then we continue to improve from there as others adjust their own pricing and where at our level.

Speaker #1: So that gives us confidence as we look out over the course of the year.

Michael Creedon: It's in a $0.25 increment. We continue to improve from there as others adjust their own pricing, and we're at our level. That gives us further confidence. On the macro, sure, customers are under pressure from higher fuel prices. That also makes them more value-focused. Look back at history. I always talk about that 20 years of positive comps. Periods like this reinforce Dollar Tree's position as a key partner for our customers. One, our outstanding value. Two, we're close to home with an in and out shop. Three, people still want to treat themselves. At Dollar Tree, it's guilt-free treat yourselves because of where our value is and our pricing. That gives us confidence as we look out over the course of the year.

Mike Creedon: It's in a $0.25 increment. We continue to improve from there as others adjust their own pricing, and we're at our level. That gives us further confidence. On the macro, sure, customers are under pressure from higher fuel prices. That also makes them more value-focused. Look back at history. I always talk about that 20 years of positive comps. Periods like this reinforce Dollar Tree's position as a key partner for our customers. One, our outstanding value. Two, we're close to home with an in and out shop. Three, people still want to treat themselves. At Dollar Tree, it's guilt-free treat yourselves because of where our value is and our pricing. That gives us confidence as we look out over the course of the year.

Speaker #3: Thank you. Our next question today is coming from Rupesh Parikh from Oppenheimer. Your line is now live.

Operator: Thank you. Our next question today is coming from Rupesh Parikh from Oppenheimer. Your line is now live.

Speaker #6: So that gives us further confidence. On the macro, sure, customers are under pressure from higher fuel prices. But that also makes them more value-focused.

Speaker #4: Good morning. Thanks for taking my question. So during our store checks, we recently observed some price increase in center store food. So curious whether this was planned.

Rupesh Parikh: Good morning. Thanks for taking my question. During our store checks, we recently observed some price increase in center store food. Curious whether this was planned, how much the store did impact, and what's the strategy behind it? As you look at the place where you took pricing, how do your values compare to the competition at the new price levels?

Speaker #4: But to the store, did it impact? And what's the strategy behind it? And then as you look at the places where you took pricing, how do your values compare to the competition at the new price levels?

Speaker #6: Look back at history. I always talk about that 20 years of positive comps. Periods like this reinforce Dollar Tree's position as a key partner for our customers.

Speaker #1: Thanks, Rupesh. I'll start that. First, just to put it in context, this is a very small portion of our assortment. Less than 5%. Our objective was to improve assortment relevance and also improve price clarity for the customer.

Michael C. Creedon, Jr.: Thanks, Rupesh. I'll start that. First, just to put it in context, this is a very small portion of our assortment, less than 5%. Our objective was to improve assortment relevance and also improve price clarity for the customer. We're listening to our customers in ways we never have before. There were brands that we had lost because we couldn't provide them at the dollar or the $1.25, and our customers wanted those brands. They were part of their occasions to come. At $1.50, we were able to bring that back. Rice-A-Roni is a great example. SPAM, you could see it in the stores. Frank's RedHot, I mean, we put that on everything. It really gave us a good opportunity.

Mike Creedon: Thanks, Rupesh. I'll start that. First, just to put it in context, this is a very small portion of our assortment, less than 5%. Our objective was to improve assortment relevance and also improve price clarity for the customer. We're listening to our customers in ways we never have before. There were brands that we had lost because we couldn't provide them at the dollar or the $1.25, and our customers wanted those brands. They were part of their occasions to come. At $1.50, we were able to bring that back. Rice-A-Roni is a great example. SPAM, you could see it in the stores. Frank's RedHot, I mean, we put that on everything. It really gave us a good opportunity.

Speaker #6: One, our outstanding value. Two, we're close to home. With an in-and-out shop. And three, people still want to treat themselves. And at Dollar Tree, it's guilt-free treat yourselves because of where our value is and our pricing.

Speaker #6: So that gives us confidence as we look out over the course of the year.

Speaker #1: We're listening to our customers in ways we never have before. And there were brands that we had lost because we couldn't provide them at the dollar or the dollar 25.

Speaker #2: Thank you. Our next question today is coming from Rupesh Parikh from Oppenheimer. Your line is now live.

Michael Creedon: Thank you. Our next question today is coming from Rupesh Parikh from Oppenheimer. Your line is now live.

Seth Sigman: Thank you.

Operator: Our next question today is coming from Rupesh Parikh from Oppenheimer. Your line is now live.

Speaker #7: Good morning. Thanks for taking my question. So during our store checks, we recently observed some price increase in center store food. So curious whether this was planned.

Rupesh Parikh: Good morning, and thanks for taking my question. During our store checks, we recently observed some price increase in center store food. Curious whether this was planned, how much of the store did it impact, and what's the strategy behind it? Then as you look at the places where you took pricing, how do your values compare to the competition at the new price levels?

Speaker #1: And our customers wanted those brands. They were part of their occasions to come. And so at 150, we were able to bring that back.

Speaker #7: How much of the store did it impact? And what's the strategy behind it? And then, as you look at the places where you took pricing, how do your values compare to the competition at the new price levels?

Speaker #1: Rice-A-Roni is a great example. Spam, you can see it in the stores. Frank's Hot Sauce, I mean, we put that on everything. So it really gave us a good opportunity.

Speaker #6: Thanks, Rupesh. I'll start that. First, just to put it in context, this is a very small portion of our assortment. Less than 5%. Our objective was to improve assortment relevance and also improve price clarity for the customer.

Michael Creedon: Thanks, Rupesh. I'll start that. Just to put it in context, this is a very small portion of our assortment, less than 5%. Our objective was to improve assortment relevance and also improve price clarity for the customer. We're listening to our customers in ways we never have before. There were brands that we had lost because we couldn't provide them at the $1 or the $1.25, and our customers wanted those brands. They were part of their occasions to come. At $1.50, we were able to bring that back. Rice-A-Roni is a great example. Spam, you could see it in the stores. Frank's RedHot, I mean, we put that on everything. It really gave us a good opportunity. In terms of the competitiveness, Stewart, do you want to hit the process there?

Mike Creedon: Thanks, Rupesh. I'll start that. Just to put it in context, this is a very small portion of our assortment, less than 5%. Our objective was to improve assortment relevance and also improve price clarity for the customer. We're listening to our customers in ways we never have before. There were brands that we had lost because we couldn't provide them at the $1 or the $1.25, and our customers wanted those brands. They were part of their occasions to come. At $1.50, we were able to bring that back. Rice-A-Roni is a great example. Spam, you could see it in the stores. Frank's RedHot, I mean, we put that on everything. It really gave us a good opportunity. In terms of the competitiveness, Stewart, do you want to hit the process there?

Speaker #1: And then in terms of. Competitiveness, Stuart, do you want to hit the process there?

Michael C. Creedon, Jr.: Competitiveness. Stewart, do you want to hit the process there?

Mike Creedon: Competitiveness. Stewart, do you want to hit the process there?

Speaker #4: Yeah. Sure, Mike. Let me talk a little bit about how we benchmark versus competitors. So Rupesh, good morning. We don't achieve value by chance.

Stewart Glendinning: Yeah, sure, Mike. Let me talk a little bit about how we benchmark versus competitors. Rupesh, good morning. We don't achieve value by chance. That's really my first point. Our merchants do the shopping for our customers to make sure that we get to the best value. One of the ways they do that is that they rigorously benchmark our products against the competitors. Now remember, only about 20% of our store is actually like for like. Even when they do their like for like comparison, they're pretty generous to our competitors in the way that they benchmark that, because they allow much larger packs to be benchmarked directly on a per ounce basis against our own packs. Even when we do that, we still show data that shows us to be positive on a relative value basis versus the competitors.

Speaker #6: We're listening to our customers in ways we never have before. And there were brands that we had lost because we couldn't provide them at the dollar or the $1.25.

Speaker #4: That's really my first point. Our merchants do the shopping for our customers to make sure that we get to the best value. And one of the ways they do that is that they rigorously benchmark our products against the competitors.

Speaker #6: And our customers wanted those brands. They were part of their occasions to come. And so at $1.50, we were able to bring that back.

Speaker #4: Now, remember, only about 20% of our store can actually be is actually like-for-like. But even when they do that like-for-like comparison, they're pretty generous to our competitors in the way that they benchmark that because they allow much larger packs to be benchmarked directly on a per-ounce basis against our own packs.

Speaker #6: Rice-A-Roni is a great example. Spam, you could see it in the stores. Frank's Hot Sauce, I mean, we put that on everything. So it really gave us a good opportunity.

Speaker #6: And then in terms of the competitiveness, Stuart, do you want to hit the process there?

Speaker #4: And even when we do that, we still show data that shows us to be positive on a relative value basis versus the competitors. And I'll also say part of that value benchmarking is not simply what is the price, but also what is the spec of the goods that is going into.

Speaker #7: Yeah. Sure, Mike. Let me talk a little bit about how we benchmark versus competitors. So Rupesh, good morning. We don't achieve value by chance.

Stewart Glendinning: Yeah, sure, Mike. Let me talk a little bit about how we benchmark versus competitors. Rupesh, good morning. We don't achieve value by chance. That's really my first point. Our merchants do the shopping for our customers to make sure that we get to the best value. One of the ways they do that is that they rigorously benchmark our products against the competitors. Now, remember, only about 20% of our store is actually like for like. Even when they do that like for like comparison, they're pretty generous to our competitors in the way that they benchmark that, because they allow much larger packs to be benchmarked directly on a per ounce basis against our own packs. Even when we do that, we still show data that shows us to be positive on a relative value basis versus the competitors.

Stewart Glendinning: I'll also say, part of that value benchmarking is not simply what is the price, but also what is the spec of the goods that is going into. It's a very detailed process that gets back to the point I started with, which is this doesn't happen by chance. On the 80% of the store that is sort of unique to us, our merchants still, on those items, I mean, 85% of the store is less than $2. This separates us from most competitors, generally speaking. Outside of that, our merchants are constantly focused on how they achieve the greatest value on any of those items. They want the deals to be real deals, and that's how we end up with things like $5 hammers. We always start with value, we end with value across 100% of the store.

Speaker #7: That's really my first point. Our merchants do the shopping for our customers to make sure that we get to the best value. And one of the ways they do that is that they rigorously benchmark our products against the competitors.

Speaker #4: So it's a very detailed process that gets back to the point I started with, which is this doesn't happen by chance. On the 80% of the store that is sort of unique to us, our merchants still, on those items, I mean, 85% of the store is less than $2.

Speaker #7: Now, remember, only about 20% of our store can actually be—is actually like-for-like. But even when they do that like-for-like comparison, they're pretty generous to our competitors in the way that they benchmark that, because they allow much larger packs to be benchmarked directly on a per-ounce basis against our own packs.

Speaker #4: So this separates us from most competitors generally speaking. But outside of that, I mean, our merchants are constantly focused on how do they achieve the greatest value.

Speaker #4: On any of those items, they want the deals to be real deals. And that's how we end up with things like $5 hammers. And so we always start with value.

Speaker #7: And even when we do that, we still show data that shows us to be positive on a relative value basis versus the competitors. And I'll also say part of that value benchmarking is not simply what is the price, but also what is the spec of the goods that is going into.

Speaker #4: We end with value. Across 100% of the store. Great. That's helpful, Color. Then my follow-up question. SG&A do you leverage during the quarter? Can you speak to your confidence that SG&A can leverage this year?

Stewart Glendinning: I'll also say, part of that value benchmarking is not simply what is the price, but also what is the spec of the goods that is going into. It's a very detailed process that gets back to the point I started with, which is this doesn't happen by chance. On the 80% of the store that is sort of unique to us, our merchants still, on those items, I mean, 85% of the store is less than $2, so this separates us from most competitors, generally speaking. Outside of that, our merchants are constantly focused on how they achieve the greatest value on any of those items. They want the deals to be real deals, and that's how we end up with things like $5 hammers. We always start with value, we end with value across 100% of the store.

Rupesh Parikh: Great. That's helpful color. My follow-up question, SG&A de-levered during the quarter. Can you speak to your confidence that SG&A can lever this year? Also since you're lapping the red stickering headwinds, how should we think about SG&A growth on an underlying basis? Any headwinds or tailwinds we should be thinking about?

Speaker #7: So it's a very detailed process that gets back to the point I started with, which is: this doesn't happen by chance. On the 80% of the store that is sort of unique to us, our merchants still, on those items, I mean, 85% of the store is less than $2.

Speaker #4: And also, since you're lapping the red stickering headwinds, how should we think about SG&A growth on drawing basis? Just any headwinds or tailwinds we should be thinking about?

Speaker #1: Yeah. Thanks, Rupesh. I mean, yeah, let me pick that apart. The SG&A outcome is really. Look at this against history. It's clear that the results we've delivered in Q1 are good results.

Stewart Glendinning: Yeah, thanks, Rupesh. Let me pick that apart. The SG&A outcome, look at this against history. It's clear that the results we've delivered in Q1 are good results that put us absolutely on the track that we've been talking about. When you consider what also took place in Q1, because at the same time we delivered these results in Q1, we were continuing to invest incrementally in marketing initiatives, and we also had to absorb some increased pressure from general liabilities. Let me talk to a couple of those things. First of all, on general liabilities, I want you to think about that a little bit like we approach shrink. We've taken it apart. We know what the drivers are.

Speaker #7: So this separates us from most competitors generally speaking. But outside of that, I mean, our merchants are constantly focused on how do they achieve the greatest value.

Speaker #1: That put us absolutely on the track that we've been talking about. When you consider what also took place in Q1, because at the same time, we delivered these results in the first quarter, we were continuing to invest incrementally in marketing initiatives and we also had to absorb some increased pressure from general liabilities.

Speaker #7: On any of those items, they want the deals to be real deals. And that's how we end up with things like $5 hammers. So we always start with value.

Speaker #7: We end with value. Across 100% of the store. Great. That's helpful, Caller. Then my follow-up question. SG&A do you leverage during the quarter? Can you speak to your confidence that SG&A can leverage this year?

Rupesh Parikh: Great. That's helpful color. My follow-up question, SG&A delevered during the quarter. Can you speak to your confidence that SG&A can lever this year? Since you're lapping the red stickering headwind, how should we think about SG&A growth on an underlying basis? Just any headwinds or tailwinds we should be thinking about?

Speaker #7: And also, since you're lapping the red stickering headwinds, how should we think about SG&A growth on drawing basis? Just any headwinds or tailwinds we should be thinking about?

Speaker #1: So let me talk to a couple of those things. First of all, on general liabilities, I want you to think about that a little bit like we approach shrink.

Speaker #1: We've taken it apart. We know what the drivers are. We've got teams organized around it. And we have a very clear action plan that is designed to bend the trend on general liability, even though that is a bit of an industry problem.

Speaker #6: Yeah. Thanks, Rupesh. I mean, yeah, let me pick that apart. So first of all, the SG&A outcome is really good. Look at this against history.

Stewart Glendinning: Yeah, thanks, Rupesh. Let me pick that apart. First of all, the SG&A outcome is really good. Look at this against history. It's clear that the results we've delivered in Q1 are good results that put us absolutely on the track that we've been talking about. When you consider what also took place in Q1, because at the same time we delivered these results in the first quarter, we were continuing to invest incrementally in marketing initiatives, and we also had to absorb some increased pressure from general liabilities. Let me talk to a couple of those things. First of all, on general liabilities, I want you to think about that a little bit like we approach shrink. We've taken it apart. We know what the drivers are.

Stewart Glendinning: We've got teams organized around it, and we have a very clear action plan that is designed to bend the trend on general liability, even though that is a bit of an industry problem. We are also continuing to make progress on growing SG&A more in line with our business. That has been the focus of our organization, and we're seeing much better cost discipline. We're seeing labor productivity, and we're starting to see those leverage characteristics. Now, in H2, we will start to lap the stickering from last year. You're going to see absolute leverage in H2. How am I confident we're going to see leverage? Because I know we've got that one time from last year.

Speaker #6: It's clear that the results we've delivered in Q1 are good results. That puts us absolutely on the track that we've been talking about. When you consider what also took place in Q1—because, at the same time we delivered these results in the first quarter, we were continuing to invest incrementally in marketing initiatives—and we also had to absorb some increased pressure from general liabilities.

Speaker #1: We are also continuing to make progress on growing SG&A more in line with our business. That has been the focus of our organization. And we're seeing much better cost discipline.

Speaker #1: We're seeing labor productivity. And we're starting to see those leveraged characteristics. Now, on the back half of the year, in the back half of the year, we will start to lap the stickering from last year.

Speaker #6: So let me talk to a couple of those things. First of all, on general liabilities, I want you to think about that a little bit like we approach shrink.

Speaker #1: So you're going to see absolute leverage in the back half of the year. I mean, how am I confident we're going to see leverage?

Speaker #1: Because I know we've got that one time from last year. But putting that aside, all of our goals remain the same. And we're confident that we are on the right track to deliver our SG&A promises.

Speaker #6: We've taken it apart. We know what the drivers are. We've got teams organized around it. And we have a very clear action plan that is designed to bend the trend on general liability, even though that is a bit of an industry problem.

Stewart Glendinning: Putting that aside, all of our goals remain the same, and we're confident that we are on the right track to deliver our SG&A promises.

Speaker #3: Thank you. Our next question today is coming from Chris Buttiglieri from BNP Paribas. Your line is now live.

Speaker #6: We are also continuing to make progress on growing SG&A more in line with our business. That has been the focus of our organization. And we're seeing much better cost discipline.

Operator: Thank you. Our next question today is coming from Chris Bottiglieri from BNP Paribas. Your line is now live.

Speaker #5: Good morning. Thanks for taking the question. Can you speak to what you are seeing from low-income consumers, given elevated gas prices? Additionally, have you started to see any trade-in-to-dollar tree from higher-income consumers?

Chris Bottiglieri: Good morning. Thanks for taking the question. Can you speak to what you are seeing from low-income consumer given the elevated gas prices? Additionally, have you started to see any trade-in to Dollar Tree from higher income consumers? Given the environment, are you seeing anything differently from a merchandising perspective? Are you doing anything differently from a merchandising perspective?

Speaker #6: We're seeing labor productivity. And we're starting to see those leveraged characteristics. Now, on the back half of the year, in the back half of the year, we will start to lap the stickering from last year.

Speaker #5: Given the environment, are you seeing anything differently from a merchandising perspective? Are you doing anything differently from a merchandising perspective?

Speaker #6: So you're going to see absolute leverage in the back half of the year. I mean, how am I confident we're going to see leverage?

Speaker #1: Yeah. Thanks, Chris. Yeah. Across all income levels, customers are value-focused. And definitely, prioritizing affordability. Convenience and gas-saving trip efficiency. In Q1, customers saw higher gas prices for sure.

Speaker #6: Because I know we've got that one-time from last year. But putting that aside, all of our goals remain the same. And we're confident that we are on the right track to deliver our SG&A promises.

Michael C. Creedon, Jr.: Thanks, Chris. Across all income levels, customers are value-focused and definitely prioritizing affordability, convenience, and gas-saving trip efficiency. In Q1, customers saw higher gas prices for sure, they also saw higher tax returns. Typically, we see a lag in the true impact from higher gas. That remains to be seen a bit as to the impact they have. No matter what the customer faces, we know that value and convenience will be top of their priorities. For us, that's where we meet them, and that's where we think we're really well-suited. I couldn't think of a better time to have a more complete and relevant assortment. Yes, we are seeing trade-in customers as we continue to grow households. We're the fourth largest household by penetration retailer, and it's skewing higher income, more than half skew higher income.

Mike Creedon: Thanks, Chris. Across all income levels, customers are value-focused and definitely prioritizing affordability, convenience, and gas-saving trip efficiency. In Q1, customers saw higher gas prices for sure, they also saw higher tax returns. Typically, we see a lag in the true impact from higher gas. That remains to be seen a bit as to the impact they have. No matter what the customer faces, we know that value and convenience will be top of their priorities. For us, that's where we meet them, and that's where we think we're really well-suited. I couldn't think of a better time to have a more complete and relevant assortment. Yes, we are seeing trade-in customers as we continue to grow households. We're the fourth largest household by penetration retailer, and it's skewing higher income, more than half skew higher income.

Stewart Glendinning: Putting that aside, all of our goals remain the same, and we are confident that we are on the right track to deliver our SG&A promises.

Speaker #2: Thank you. And next question today is coming from Chris Buttiglieri from BNP Paribas. Your line is now live.

Stewart Glendinning: Thank you. Our next question today is coming from Christopher Horvers from BNP Paribas. Your line is now live.

Operator: Thank you. Our next question today is coming from Christopher Horvers from BNP Paribas. Your line is now live.

Speaker #1: But they also saw higher tax returns. And typically, we see a lag in the true impact from higher gas. So that remains to be seen a bit as to the impact they have.

Speaker #8: Good morning. Thanks for taking the question. Can you speak to what you are seeing from low-income consumers, given elevated gas prices? Additionally, have you started to see any trade-in to Dollar Tree from higher-income consumers?

Stewart Glendinning: Good morning. Thanks for taking the question. Can you speak to what you are seeing from low-income consumer given the elevated gas prices? Additionally, have you started to see any trade-in to Dollar Tree from higher income consumers? Given the environment, are you seeing anything differently from a merchandising perspective? Are you doing anything differently from a merchandising perspective?

Speaker #1: But no matter what the customer faces, we know that value and convenience will be top of their priorities. And for us, that's where we meet them.

Speaker #8: Given the environment, are you seeing anything differently from a merchandising perspective? Are you doing anything differently from a merchandising perspective?

Speaker #1: And that's where we think we're really well-suited. And I couldn't think of a better time to have a more complete and relevant assortment. So yes, we are seeing trade-in customers as we continue to grow households.

Speaker #6: Yeah. Thanks, Chris. Yeah. Across all income levels, customers are value-focused. And definitely, prioritizing affordability. Convenience and gas-saving trip efficiency. In Q1, customers saw higher gas prices for sure.

Michael Creedon: Yeah, thanks, Christopher Horvers. Across all income levels, customers are value-focused and definitely prioritizing affordability, convenience, and gas-saving trip efficiency. In Q1, customers saw higher gas prices for sure, they also saw higher tax returns. Typically, we see a lag in the true impact from higher gas. That remains to be seen a bit as to the impact they have. No matter what the customer faces, we know that value and convenience will be top of their priorities. For us, that's where we meet them, and that's where we think we're really well suited. I couldn't think of a better time to have a more complete and relevant assortment. Yes, we are seeing trade-in customers as we continue to grow households.

Stewart Glendinning: Yeah, thanks, Christopher Horvers. Across all income levels, customers are value-focused and definitely prioritizing affordability, convenience, and gas-saving trip efficiency. In Q1, customers saw higher gas prices for sure, they also saw higher tax returns. Typically, we see a lag in the true impact from higher gas. That remains to be seen a bit as to the impact they have. No matter what the customer faces, we know that value and convenience will be top of their priorities. For us, that's where we meet them, and that's where we think we're really well suited. I couldn't think of a better time to have a more complete and relevant assortment. Yes, we are seeing trade-in customers as we continue to grow households.

Speaker #1: We're the fourth-largest household by penetration, retailer. And it's skewing higher income, more than half skew higher income. And they're finding an assortment that is really relevant to them.

Speaker #6: But they also saw higher tax returns. And typically, we see a lag in the true impact from higher gas. So that remains to be seen a bit as to the impact they have.

Stewart Glendinning: They're finding an assortment that is really relevant to them. Dollar Tree, it's a destination in times like this. We've proven that over our history, and we'll continue to see that. Mike, let me just offer a couple of thoughts on some of the data that we're seeing. We look at our performance by income cohort. We've got the ability to slice some of that. There's no question the low-income consumer is under pressure. We've just gone through three or four years of higher inflation, generally. Think about food, healthcare, housing, utilities. Look at all those things over the last number of years, and you will see them indexing higher, markedly higher. Now on top of that is coming this much higher gas price.

Mike Creedon: They're finding an assortment that is really relevant to them. Dollar Tree, it's a destination in times like this. We've proven that over our history, and we'll continue to see that.

Speaker #1: So Dollar Tree is it's a destination in times like this. And we will we've proven that over our history and will continue to see that.

Speaker #6: But no matter what the customer faces, we know that value and convenience will be top of their priorities. And for us, that's where we meet them.

Speaker #5: Mike, maybe just let me just offer a couple of thoughts on some of the data that we're seeing. We look at our performance by income cohort.

Stewart Glendinning: Mike, let me just offer a couple of thoughts on some of the data that we're seeing. We look at our performance by income cohort. We've got the ability to slice some of that. There's no question the low-income consumer is under pressure. We've just gone through three or four years of higher inflation, generally. Think about food, healthcare, housing, utilities. Look at all those things over the last number of years, and you will see them indexing higher, markedly higher. Now on top of that is coming this much higher gas price.

Speaker #6: And that's where we think we're really well-suited. And I couldn't think of a better time to have a more complete and relevant assortment. So yes, we are seeing trade-in customers as we continue to grow households.

Speaker #5: We've got the ability to slice some of that. And it's no question the low-income consumers are under pressure. I mean, we've just gone through three or four years of higher inflation generally.

Speaker #5: Think about food, healthcare, housing, utilities. Look at all those things. Over the last number of years, and you will see them indexing higher. Markedly higher.

Speaker #6: We're the fourth-largest household by penetration, retailer. And it's skewing higher income, more than half skew higher income. And they're finding an assortment that is really relevant to them.

Stewart Glendinning: We're the fourth largest household by penetration retailer, and it's skewing higher income, more than half skew higher income, and they're finding an assortment that is really relevant to them. Dollar Tree, it's a destination in times like this. We've proven that over our history, and we'll continue to see that. Mike, let me just offer a couple of thoughts on some of the data that we're seeing. We look at our performance by income cohort. We've got the ability to slice some of that. There's no question the low income consumer is under pressure. We've just gone through three or four years of higher inflation, generally. Think about food, healthcare, housing, and utilities. Look at all those things over the last number of years, and you will see them indexing higher, markedly higher. Now, on top of that is coming this much higher gas price.

Speaker #5: And now, on top of that, is coming this much higher gas price. But the critical thing, and this is really the message I want to give you, is that when we look at Dollar Tree, when I take apart the data from this past quarter and we look at our store-based by income demographic, all of our cohorts are comping positive.

Stewart Glendinning: The critical thing, and this is really the message I want to give you, is that when we look at Dollar Tree, when I take apart the data from this past quarter and we look at our store base by income demographic, all of our cohorts are comping positive in this past quarter. Comp growth is broad-based, and some of the things that Mike is saying about the attractiveness of our assortment and our offering and our value to customers is proving out in the data.

Speaker #6: So Dollar Tree—it's a destination in times like this, and we have proven that over our history. We'll continue to see that.

Speaker #7: Mike, maybe just let me offer a couple of thoughts on some of the data that we're seeing. We look at our performance by income cohort.

Speaker #5: In this past quarter. So comp growth is broad-based. And some of the things that Mike is saying about the attractiveness of our assortment and our offering and our value to customers is proving out in the data.

Speaker #7: We've got the ability to slice some of that. And it's no question the low-income consumer is under pressure. I mean, we've just gone through three or four years of higher inflation generally.

Speaker #7: Think about food, healthcare, housing, and utilities. Look at all those things over the last number of years, and you will see them indexing higher—markedly higher.

Speaker #5: Thank you. And then my follow-up would be a question on tariff refunds. Can you give us an update on the tariff refunds and how you're thinking about timing them out and the use of the proceeds?

Chris Bottiglieri: Thank you. Then my follow-up would be a question on tariff refunds. Can you give us an update on the tariff refunds and how you think about timing, amount, and the use of the proceeds?

Speaker #7: And now, on top of that, is coming this much higher gas price. But the critical thing, and this is really the message I want to give you, is that when we look at dollar tree, and when I take apart the data from this past quarter, and we look at our store-based by income demographic, all of our cohorts are comping positive.

Speaker #1: Sure. Yeah. Thanks for the question. Like many companies, we're participating in the tariff refund program. There's still a lot to process through, especially on what future tariff landscape might be.

Stewart Glendinning: The critical thing, and this is really the message I want to give you, is that when we look at Dollar Tree, when I take apart the data from this past quarter, and we look at our store base by income demographic. All of our cohorts are comping positive in this past quarter. Comp growth is broad-based, and some of the things that Mike is saying about the attractiveness of our assortment and our offering and our value to customers is proving out in the data.

Michael C. Creedon, Jr.: Sure. Yeah, thanks for the question. Like many companies, we're participating in the tariff refund program. There's still a lot to process through, especially on what future tariff landscape might be. At Dollar Tree, we start with the customer. Our focus is the customer. We would look to reinvest any refunds in the business to enhance our ability to deliver that value, convenience, and discovery that our customer comes to us for. In terms of the outlook, as Stewart said, nothing was in Q1 and nothing's assumed in the outlook going forward.

Mike Creedon: Sure. Yeah, thanks for the question. Like many companies, we're participating in the tariff refund program. There's still a lot to process through, especially on what future tariff landscape might be. At Dollar Tree, we start with the customer. Our focus is the customer. We would look to reinvest any refunds in the business to enhance our ability to deliver that value, convenience, and discovery that our customer comes to us for. In terms of the outlook, as Stewart said, nothing was in Q1 and nothing's assumed in the outlook going forward.

Speaker #1: But at Dollar Tree, we start with the customer. Our focus is the customer. So we would look to reinvest any refunds in the business to enhance our ability to deliver that value convenience and discovery that our customer comes to us for.

Speaker #7: In this past quarter. So comp growth is broad-based. And some of the things that Mike is saying about the attractiveness of our assortment and our offering and our value to customers is proving out in the data.

Speaker #1: In terms of the outlook, as Stuart said, we haven't nothing was in Q1 and nothing's assumed in the outlook going forward.

Speaker #8: Thank you. And then my follow-up would be a question on tariff refunds. Can you give us an update on the tariff refunds and how you're thinking about timing them out and the use of the proceeds?

Stewart Glendinning: Thank you. My follow-up would be a question on tariff refunds. Can you give us an update on the tariff refunds and how you think about timing, amount, and the use of the proceeds?

Chris Bottiglieri: Thank you. My follow-up would be a question on tariff refunds. Can you give us an update on the tariff refunds and how you think about timing, amount, and the use of the proceeds?

Speaker #3: Thank you. Our next question is coming from Michael Lasser from UBS. Your line is now live.

Operator: Thank you. Our next question is coming from Michael Lasser from UBS. Your line is now live.

Speaker #6: Good morning. Thank you so much for taking my question. We're all trying to figure out the interplay between your outlook for traffic and your profitability.

Speaker #6: Sure. Yeah. Thanks for the question. Like many companies, we're participating in the tariff refund program. There's still a lot to process through, especially on what future tariff landscape might be.

Michael Creedon: Sure. Yeah, thanks for the question. Like many companies, we're participating in the tariff refund program. There's still a lot to process through, especially on what future tariff landscape might be. At Dollar Tree, we start with the customer. Our focus is the customer. We would look to reinvest any refunds in the business to enhance our ability to deliver that value, convenience, and discovery that our customer comes to us for. In terms of the outlook, as Stewart Glendinning said, nothing was in Q1 and nothing's assumed in the outlook going forward.

Mike Creedon: Sure. Yeah, thanks for the question. Like many companies, we're participating in the tariff refund program. There's still a lot to process through, especially on what future tariff landscape might be. At Dollar Tree, we start with the customer. Our focus is the customer. We would look to reinvest any refunds in the business to enhance our ability to deliver that value, convenience, and discovery that our customer comes to us for. In terms of the outlook, as Stewart Glendinning said, nothing was in Q1 and nothing's assumed in the outlook going forward.

Michael Lasser: Good morning. Thank you so much for taking my question.

Michael C. Creedon, Jr.: You're welcome.

Mike Creedon: You're welcome.

Michael Lasser: We're all trying to figure out the interplay between your outlook for traffic and your profitability. On the one hand, you're making the case that given the outlook for stacks as the traffic comparisons get easier, coupled with the historic experience as traffic had come back following your initial move to the $1.25 price point, traffic will improve. On the other hand, you're also saying that you're going to absorb some of the increased costs in H2, may focus a bit more on marketing. Perhaps you're saying you're going to need to sacrifice your profitability in order to drive that traffic. How do you prioritize over time this balance between restoring positive traffic versus maintaining the profitability of the business? Is there one that you would prioritize over the other?

Speaker #6: So on the one hand, you're making the case that given the outlook for stacks as the traffic comparisons get easier coupled with the historic experience as traffic had come back following your initial move to the Dollar 25 price point, traffic will improve.

Speaker #6: But at Dollar Tree, we start with the customer. Our focus is the customer. So we would look to reinvest any refunds in the business to enhance our ability to deliver that value convenience and discovery that our customer comes to us for.

Speaker #6: But on the other hand, you're also saying that you're going to absorb some of the increased costs in the second half of the year may focus a bit more on marketing.

Speaker #6: In terms of the outlook, as Stewart said, we haven't -- nothing was in Q1, and nothing's assumed in the outlook going forward.

Speaker #6: So perhaps you're saying you're going to need to sacrifice your profitability in order to drive that traffic. So how do you prioritize over time this balance between re-storing positive traffic versus maintaining the profitability of the business?

Speaker #2: Thank you. Our next question is coming from Michael Lasser from UBS. Your line is now live.

Michael Creedon: Thank you. Our next question is coming from Michael Lasser from UBS.

Operator: Thank you. Our next question is coming from Michael Lasser from UBS.

Speaker #9: Good morning. Thank you so much for taking my question. We're all trying to figure out the interplay between your outlook for traffic and your profitability.

Michael Lasser: Good morning. Thank you so much for taking my question.

Michael Creedon: You bet, Michael.

Mike Creedon: You bet, Michael.

Michael Lasser: We're all trying to figure out the interplay between your outlook for traffic and your profitability. On the one hand, you're making the case that given the outlook for stacks, as the traffic comparisons get easier, coupled with the historic experience as traffic had come back following your initial move to the $1.25 price point, traffic will improve. On the other hand, you're also saying that you're going to absorb some of the increased costs in the H2 of the year, may focus a bit more on marketing. Perhaps you're saying you're going to need to sacrifice your profitability in order to drive that traffic. How do you prioritize over time this balance between restoring positive traffic versus maintaining the profitability of the business? Is there one that you would prioritize over the other?

Speaker #9: So on the one hand, you're making the case that given the outlook for stacks as the traffic comparisons get easier coupled with the historic experience as traffic had come back following your initial move to the dollar 25 price point, traffic will improve.

Speaker #6: Is there one that you would prioritize over the other, meaning if traffic does not improve in the back half, you'd be willing to sacrifice some of your margins in order to do that?

Michael Lasser: Meaning, if traffic does not improve in H2, you'd be willing to sacrifice some of your margin in order to do that.

Speaker #5: Yeah. Good. Well, let's talk about, Michael, because that's a good question. I mean, I don't think we're going to say what we will do when we face specific circumstances.

Stewart Glendinning: Well, let's talk about Michael's. That's a good question. I don't think we're going to say what we will do when we face specific circumstances. I can tell you what our plan is. In answer to the question that I had earlier about the outlook, I sort of made it clear that some of the benefit we took in Q1, some of the outsized performance in Q1, we will use that to help insulate the back part of the year. Our view is, we don't know how long the conflict in the Middle East is. Like others, we are hopeful that that is a temporal and not a structural issue. For the moment, we are treating that as a temporal problem. That is to say we've got the resource in our forecast for the year, our estimates, to be able to manage absorbing that cost.

Speaker #9: But on the other hand, you're also saying that you're going to absorb some of the increased costs in the second half of the year may focus a bit more on marketing.

Speaker #5: I can tell you what our plan is. In answer to the question that I had earlier about the outlook, I sort of made it clear that some of the benefit we took in Q1, some of the outsized performance in Q1, we will use that to help insulate the back part of the year.

Speaker #9: So perhaps you're saying you're going to need to sacrifice your profitability in order to drive that traffic. So how do you prioritize over time this balance between re-storing positive traffic versus maintaining the profitability of the business?

Speaker #5: And so our view is we don't know how long the conflict in the Middle East is, like others. We are hopeful. But that is a temporal and not a structural issue.

Speaker #5: For the moment, we are treating that as a temporal problem. And that is to say we've got the resource in our in our forecast for the year, our estimates.

Speaker #9: Is there one that you would prioritize over the other? Meaning, if traffic does not improve in the back half, would you be willing to sacrifice some of your margins in order to do that?

Michael Lasser: Meaning, if traffic does not improve in H2, you'd be willing to sacrifice some of your margins in order to do that.

Speaker #5: To be able to to be able to manage absorbing that cost. And as I also said earlier, I think there are some there are some upsides here.

Speaker #6: Yeah. Good. Well, let's talk about, Michael, because that's a good question. I mean, I don't think we're going to say what we will do when we face specific circumstances.

Stewart Glendinning: Yeah. Good. Well, let's talk about Michael's. That's a good question. I don't think we're going to say what we will do when we face specific circumstances. I can tell you what our plan is. In answer to the question that I had earlier about the outlook, I sort of made it clear that some of the benefit we took in Q1, some of the outsized performance in Q1, we will use that to help insulate the back part of the year. Our view is, we don't know how long the conflict in the Middle East is. Like others, we are hopeful that that is a temporal and not a structural issue. For the moment, we are treating that as a temporal problem. That is to say, we've got the resource in our forecast for the year, our estimates, to be able to manage absorbing that cost.

Stewart Glendinning: As I also said earlier, I think there are some upsides here. If we do see earlier oil change and that'll take the pressure off in an obvious way, when we get those tariff refunds, those will see reinvestment in the business. None of those are really in there. I think there are other places to go to reinforce traffic in the back half before we have to eat into the outlook that we provided to you today. Does that make sense?

Speaker #5: I mean, if we if we do see earlier oil change and that'll take the pressure off in an obvious way, when we get those tariff refunds, those will see reinvestment in the business.

Speaker #6: I can tell you what our plan is. In answer to the question that I had earlier about the outlook, I sort of made it clear that some of the benefit we took in Q1—some of the outsized performance in Q1—we will use that to help insulate the back part of the year.

Speaker #5: None of those are really in there. So I think there are other places to go to reinforce traffic in the back half before we have to eat into the outlook that we've provided to you today.

Speaker #6: And so our view is, we don't know how long the conflict in the Middle East will last. Like others, we are hopeful that this is a temporal and not a structural issue.

Speaker #5: Does that make sense?

Speaker #6: For the moment, we are treating that as a temporal problem. That is to say, we have the resources in our forecast for the year—our estimates—to be able to manage absorbing that cost.

Speaker #6: It does. Stuart, it would be helpful if you could outline some of those levers that you would push in order to drive traffic. It does not perform up to what you're expecting.

Michael Lasser: It does. Stewart, it'd be helpful if you could outline some of those levers that you would push in order to drive traffic if it does not perform up to what you're expecting, and then I have a quick follow-up. Thanks.

Speaker #6: And then I have a quick follow-up. Thanks.

Speaker #6: And as I also said earlier, I mean, I think there are some there are some upsides here. I mean, if we do see earlier oil change and that'll take the pressure off in an obvious way, when we get those tariff refunds, those will see reinvestment in the business.

Stewart Glendinning: As I also said earlier, I think there are some upsides here. If we do see earlier oil change, and that'll take the pressure off in an obvious way. When we get those tariff refunds, those we'll see reinvestment in the business. None of those are really in there. I think there are other places to go to reinforce traffic in the H2 before we have to eat into the outlook that we provided to you today. Does that make sense?

Speaker #1: Yeah. Michael, the initiatives that are already in play that we've laid out, those improving store standards Stuart talked about how we saw traffic by our store groups.

Michael C. Creedon, Jr.: Yeah, Michael, the initiatives that are already in play that we've laid out, those improving store standards. Stewart talked about how we saw traffic by our store groups, how they were performing, where they were located, all that. All those initiatives are already underway. We really see those as gaining traction and being big drivers in H2. You talk about shrink. Shrink improves in well-run stores. We really look at the assortment we're delivering and looking out over H2. We look at the improvement in the store standards. We look at the marketing that it's a kind of low cost, quick return type marketing. We really feel all those will be big drivers in H2.

Mike Creedon: Yeah, Michael, the initiatives that are already in play that we've laid out, those improving store standards. Stewart talked about how we saw traffic by our store groups, how they were performing, where they were located, all that. All those initiatives are already underway. We really see those as gaining traction and being big drivers in H2. You talk about shrink. Shrink improves in well-run stores. We really look at the assortment we're delivering and looking out over H2. We look at the improvement in the store standards. We look at the marketing that it's a kind of low cost, quick return type marketing. We really feel all those will be big drivers in H2.

Speaker #1: How they were performing, where they were located, all that. All those initiatives are already underway. We really see those as gaining traction and being big drivers in the second half.

Speaker #6: None of those are really in there. So I think there are other places to go to reinforce traffic in the back half before we have to eat into the outlook that we've provided to you today.

Speaker #1: You talk about shrink. Shrink improves in well-run stores. And so we really look at the assortment we're delivering and looking out over the second half.

Speaker #6: Does that make sense?

Speaker #1: We look at the improvement in the store standards. We look at the marketing that has a it's a kind of low-cost, quick-return type marketing.

Speaker #9: It does. Stuart, it would be helpful if you could outline some of those levers that you would push in order to drive traffic. It does not perform up to what you're expecting.

Speaker #1: We really feel all those will be big drivers in the second half.

Speaker #9: And then I have a quick follow-up. Thanks.

Speaker #5: Understood. My quick follow-up is, Mike, as the basket, the price of a basket for a customer increases. The customer comes to the register and sees that it costs a lot more to buy the same volume of goods that they might have purchased in the past.

Speaker #6: Yeah. Michael, the initiatives that are already in play that we've laid out, those improving store standards Stuart talked about how we saw traffic by our store groups.

Michael Creedon: Yeah, Michael, the initiatives that are already in play that we've laid out, those improving store standards. Stuart talked about how we saw traffic by our store groups, how they were performing, where they were located, all that. All those initiatives are already underway. We really see those as gaining traction and being big drivers in H2. You talk about shrink. Shrink improves in well-run stores. We really look at the assortment we're delivering and looking out over H2. We look at the improvement in the store standards. We look at the marketing that it's a kind of low cost, quick return type marketing. We really feel all of those will be big drivers in H2.

Mike Creedon: Yeah, Michael, the initiatives that are already in play that we've laid out, those improving store standards. Stuart talked about how we saw traffic by our store groups, how they were performing, where they were located, all that. All those initiatives are already underway. We really see those as gaining traction and being big drivers in H2. You talk about shrink. Shrink improves in well-run stores. We really look at the assortment we're delivering and looking out over H2. We look at the improvement in the store standards. We look at the marketing that it's a kind of low cost, quick return type marketing. We really feel all of those will be big drivers in H2.

Michael Lasser: Understood. My quick follow-up is, Mike, as the price of a basket for a customer increases. The customer comes to the register, sees that it costs a lot more to buy the same volume of goods that they might have purchased in the past. Perhaps their expectations around the store experience also elevate if they're going to have to spend more to buy the same amount. You showed this helpful graph on where your store standards are across the distribution of your entire population. Where does that stand today? Are you willing to invest more in labor or other operating expenses to accelerate and bend the curve on your overall level of store standards in order to meet the customer's expectations if they have risen as a result of the higher price point?

Speaker #6: How they were performing, where they were located, all that. All those initiatives are already underway. We really see those as gaining traction and being big drivers in the second half.

Speaker #5: Perhaps their expectations around the store experience also elevate. If they're going to have to spend more to buy the same amount. So you showed this helpful graph on where your store standards are across the distribution of your entire population.

Speaker #6: You talk about shrink. Shrink improves and well-run stores. And so we really look at the assortment we're delivering and looking out over the second half.

Speaker #6: We look at the improvement in the store standards. We look at the marketing that has a it's a kind of low-cost, quick-return type marketing.

Speaker #5: Where does that stand today? And are you willing to invest more in labor or other operating expenses to accelerate and bend the curve on your overall level of store standards in order to meet the customer's expectations if they have risen as a result of the higher price point?

Speaker #6: We really feel all those will be big drivers in the second half.

Speaker #8: Understood. My quick follow-up is, Mike, has the price of a basket for a customer increased? So, the customer comes to the register and sees that it costs a lot more to buy the same volume of goods that they might have purchased in the past.

Michael Lasser: Understood. My quick follow-up is, Michael, as the price of a basket for a customer increases, a customer comes to the register, sees that it costs a lot more to buy the same volume of goods that they might have purchased in the past. Perhaps their expectations around the store experience also elevate, if they're going to have to spend more to buy the same amount. You showed this helpful graph on where your store standards are across the distribution of your entire population. Where does that stand today? Are you willing to invest more in labor or other operating expenses to accelerate and bend the curve on your overall level of store standards in order to meet the customer's expectations if they have risen as a result of the higher price point?

Speaker #1: Yeah. First, on the back, I think you've got to ground yourself in the fact that 85% of what we sell is less than $2.

Michael C. Creedon, Jr.: Yeah. First on the back, I think you've got to ground yourself in the fact that 85% of what we sell is less than $2 or less. We have an average unit of $1.51. You get a basket, 12 bucks in change. We are not the same sticker shock you're getting when you check out at a grocery store or one of these mass merchants. It's different. In terms of, we call it the Himalayas, somebody said that at Investor Day, and I've always liked it. Jocy gets tired of me asking about the Himalayas. We are seeing improvement, and it's sliding to the right. Retailers are always chasing their lower performing stores. We were chasing more than we should have been. We've seen that improve, and materially improve, shifting to the right. I think shrink is a good proof point of that.

Mike Creedon: Yeah. First on the back, I think you've got to ground yourself in the fact that 85% of what we sell is less than $2 or less. We have an average unit of $1.51. You get a basket, 12 bucks in change. We are not the same sticker shock you're getting when you check out at a grocery store or one of these mass merchants. It's different. In terms of, we call it the Himalayas, somebody said that at Investor Day, and I've always liked it. Jocy gets tired of me asking about the Himalayas. We are seeing improvement, and it's sliding to the right. Retailers are always chasing their lower performing stores. We were chasing more than we should have been. We've seen that improve, and materially improve, shifting to the right. I think shrink is a good proof point of that.

Speaker #8: Perhaps their expectations around the store experience also elevate. If they're going to have to spend more to buy the same amount. So you showed this helpful graph on where your store standards are across the distribution of your entire population.

Speaker #1: Or less. So we have an average unit of $1.51. You get a basket, 12 bucks and change. We are not the same sticker shock you're getting when you check out at a grocery store or one of these mass merchants.

Speaker #1: It's different. In terms of we call it the Himalayas. Somebody said that an investor day, and I've always liked it. Josie gets tired of me asking about the Himalayas.

Speaker #8: Where does that stand today? And are you willing to invest more in labor or other operating expenses to accelerate and bend the curve on your overall level of store standards in order to meet the customer's expectations, if they have risen as a result of the higher price point?

Speaker #1: We are seeing improvement in its sliding to the right and retailers are always chasing their lower-performing stores. We were chasing more than we should have been.

Speaker #1: We've seen that improve. And materially improve. Shifting to the right. And I think shrink is a good proof point of that. When you've got a well-run store, we know shrink can be internal.

Speaker #6: Yeah. First, on the back, I think you've got to ground yourself in the fact that 85% of what we sell is less than $2.

Michael Creedon: Yeah. First on the back, I think you've got to ground yourself in the fact that 85% of what we sell is less than $2 or less. We have an average unit of $1.51. You get a basket, $12 and change. We are not the same sticker shock you're getting when you check out at a grocery store or one of these mass merchants. It's different. In terms of, we call it the Himalayas, somebody said that at Investor Day, and I've always liked it. Jossy gets tired of me asking about the Himalayas. We are seeing improvement, and it's sliding to the right. Retailers are always chasing their lower performing stores. We were chasing more than we should have been. We've seen that improve and materially improve, shifting to the right. I think shrink is a good proof point of that.

Mike Creedon: Yeah. First on the back, I think you've got to ground yourself in the fact that 85% of what we sell is less than $2 or less. We have an average unit of $1.51. You get a basket, $12 and change. We are not the same sticker shock you're getting when you check out at a grocery store or one of these mass merchants. It's different. In terms of, we call it the Himalayas, somebody said that at Investor Day, and I've always liked it. Jossy gets tired of me asking about the Himalayas. We are seeing improvement, and it's sliding to the right. Retailers are always chasing their lower performing stores. We were chasing more than we should have been. We've seen that improve and materially improve, shifting to the right. I think shrink is a good proof point of that.

Speaker #6: Or less. So we have an average unit of $1.51. You get a basket, 12 bucks, and change. We are not the same sticker shock you're getting when you check out at a grocery store or one of these mass merchants.

Michael C. Creedon, Jr.: When you've got a well-run store, we know shrink can be internal and external. When you have a well-run store, it's kind of easier to see what's out of place. It's easier to control the things you control, including in stocks and shrink. I think that's a good proof point, Michael, of the progress we've made in improving the overall store standards.

Mike Creedon: When you've got a well-run store, we know shrink can be internal and external. When you have a well-run store, it's kind of easier to see what's out of place. It's easier to control the things you control, including in stocks and shrink. I think that's a good proof point, Michael, of the progress we've made in improving the overall store standards.

Speaker #1: And external. And when you have a well-run store, it's kind of easier to see what's out of place. And it's easier to control the things you control, including in-stocks, and shrink.

Speaker #1: So I think that's a good proof point, Michael, of the progress we've made in improving the overall store standards.

Speaker #6: It's different, in terms of—we call it the Himalayas. Somebody said that at Investor Day, and I've always liked it. Josie gets tired of me asking about the Himalayas.

Speaker #6: We are seeing improvement in its sliding to the right. Retailers are always chasing their lower-performing stores. We were chasing more than we should have been.

Speaker #5: Thanks, Stuart. Next question today is coming from Scott Scrilly from Truist Security, who is now live.

Operator: Thank you. Our next question today is coming from Scot Ciccarelli from Truist Securities. Your line is now live.

Speaker #7: Good morning, guys. Thanks for the time. So you talked about making progress on the initiatives you provided, investor day. I think one of the ones that really stood out was your Gold Star goals.

Scot Ciccarelli: Good morning, guys. Thanks for the time. You talked about making progress on the initiatives you provided at Investor Day. I think one of the ones that really stood out was your Gold Store goals and how the majority of your stores basically are substandard by your own metrics. Can you help us understand the progress that you've already made on improving the store standards, whether that's % that shifted from three to five or whatever it is? What is your expected progress for the balance of the year?

Speaker #6: We've seen that improve. And materially improve. Shifting to the right. And I think shrink is a good proof point of that. When you've got a well-run store, we know shrink can be internal and external.

Speaker #7: And how the majority of your stores basically are substandard by your own metrics. So can you help us understand the progress that you've already made on improving the store standards?

Michael Creedon: When you've got a well-run store, we know shrink can be internal and external. When you have a well-run store, it's easier to see what's out of place. It's easier to control the things you control, including in stocks and shrink. I think that's a good proof point, Michael, of the progress we've made in improving the overall store standards.

Mike Creedon: When you've got a well-run store, we know shrink can be internal and external. When you have a well-run store, it's easier to see what's out of place. It's easier to control the things you control, including in stocks and shrink. I think that's a good proof point, Michael, of the progress we've made in improving the overall store standards.

Speaker #6: And when you have a well-run store, it's kind of easier to see what's out of place. And it's easier to control the things you control, including in-stocks and shrink.

Speaker #7: Whether that's percentage, that shifted from 3 to 5 or whatever it is. And then also, what is your expected progress for the balance of the year?

Speaker #6: So, I think that's a good proof point, Michael, of the progress we've made in improving the overall store standards.

Speaker #1: Sure. And just to correct, I think 42% is what we showed. So it wasn't the majority were below our standards. But if the average retailer is chasing 15 to 20 percent of their stores, we were chasing 42% below our standard.

Michael C. Creedon, Jr.: Sure. Just to correct, I think 42% is what we showed. It wasn't the majority were below our standards. If the average retailer is chasing 15% to 20% of their stores, we were chasing 42% below our standard. That's what I showed at Investor Day. That's significantly high. That's less than a third today. We haven't broken that out, but I'll tell you right now, that's less than a third. Still not where we want it to be, but significant improvement. When you have 9,400 stores and change, turning these big QE2s are hard to do. I'm very pleased with the progress we've made over the past year. As more and more stores are above our standard and approaching that grand opening look daily, the ones left to manage get easier to manage just because of volume.

Mike Creedon: Sure. Just to correct, I think 42% is what we showed. It wasn't the majority were below our standards. If the average retailer is chasing 15% to 20% of their stores, we were chasing 42% below our standard. That's what I showed at Investor Day. That's significantly high. That's less than a third today. We haven't broken that out, but I'll tell you right now, that's less than a third. Still not where we want it to be, but significant improvement. When you have 9,400 stores and change, turning these big QE2s are hard to do. I'm very pleased with the progress we've made over the past year. As more and more stores are above our standard and approaching that grand opening look daily, the ones left to manage get easier to manage just because of volume.

Speaker #8: Thank you. Our next question today comes from Scott Scrilly from Truist Securities. Your line is now live.

Michael Creedon: Thank you. Our next question today is coming from Scot Ciccarelli from Truist Securities. Your line is now live.

Operator: Thank you. Our next question today is coming from Scot Ciccarelli from Truist Securities. Your line is now live.

Speaker #1: So that's what I showed at investor day. That's significantly high. That's less than a third today. So we haven't broken that out. But I'll tell you right now, that's less than a third.

Speaker #10: Good morning, guys. Thanks for the time. So you talked about making progress on the initiatives you provided, Investor Day. I think one of the ones that really stood out was your Gold Star goals.

Scot Ciccarelli: Good morning, guys. Thanks for the time. You talked about making progress on the initiatives you provided at Investor Day. I think one of the ones that really stood out was your Gold Star goals and how the majority of your stores basically are substandard by your own metrics. Can you help us understand the progress that you've already made on improving the store standards, whether that's percentage that shifted from 3 to 5 or whatever it is. What is your expected progress for the balance of the year?

Speaker #1: Still not where we want it to be. But significant improvement. When you have 9,400 stores and change, turning these big QE2s are hard to do.

Speaker #10: And how the majority of your stores basically are substandard by your own metrics. So can you help us understand the progress that you've already made on improving the store standards?

Speaker #1: I'm very pleased with the progress we've made over the past year. And as more and more stores are above our standard, and approaching that grand opening look daily, the ones left to manage get easier to manage just because of volume.

Speaker #10: Whether that's percentage, that shifted from 3 to 5 or whatever it is. And then also, what is your expected progress for the balance of the year?

Speaker #6: Sure. And just to correct, I think 42% is what we saw. So it wasn't the majority were below our standards. But if the average retailer is chasing 15% to 20% of their stores, we were chasing 42% below our standards.

Michael Creedon: Sure. Just to correct, I think 42% is what we showed. It wasn't the majority were below our standards, but if the average retailer is chasing 15% to 20% of their stores, we were chasing 42% below our standard. That's what I showed at Investor Day. That's significantly high. That's less than a third today. We haven't broken that out, but I'll tell you right now, that's less than a third. Still not where we want it to be, but significant improvement. When you have 9,400 stores and change, turning these big QE2s are hard to do. I'm very pleased with the progress we've made over the past year. As more and more stores are above our standard and approaching that Grand Opening Look Daily, the ones left to manage get easier to manage just because of volume.

Mike Creedon: Sure. Just to correct, I think 42% is what we showed. It wasn't the majority were below our standards, but if the average retailer is chasing 15% to 20% of their stores, we were chasing 42% below our standard. That's what I showed at Investor Day. That's significantly high. That's less than a third today. We haven't broken that out, but I'll tell you right now, that's less than a third. Still not where we want it to be, but significant improvement. When you have 9,400 stores and change, turning these big QE2s are hard to do. I'm very pleased with the progress we've made over the past year. As more and more stores are above our standard and approaching that Grand Opening Look Daily, the ones left to manage get easier to manage just because of volume.

Speaker #1: If every room in your house is a mess, it takes longer to clean it. As you start cleaning room to room, it gets easier to clean up the kitchen.

Michael C. Creedon, Jr.: If every room in your house is a mess, it takes longer to clean it. As you start cleaning room to room, it gets easier to clean up the kitchen. That's really what Jocy and the team are doing. They're making that progress, and it's not linear. It starts to accelerate because of fewer stores to address.

Mike Creedon: If every room in your house is a mess, it takes longer to clean it. As you start cleaning room to room, it gets easier to clean up the kitchen. That's really what Jocy and the team are doing. They're making that progress, and it's not linear. It starts to accelerate because of fewer stores to address.

Speaker #6: So, that's what I showed at Investor Day. That's significantly high. That's less than a third today. So, we haven't broken that out, but I'll tell you right now, that's less than a third.

Speaker #1: And that's really what Josie and the team are doing. They're making that progress. And it's not linear. It starts to accelerate because of fewer stores to address.

Speaker #6: Still not where we want it to be, but significant improvement. When you have 9,400 stores and change, turning these big QE2s is hard to do.

Speaker #7: Thanks for that. And then just a quick follow-up. We saw a decline in inventory levels. Was there something kind of unique about this quarter in terms of timing?

Scot Ciccarelli: Thanks for that. Just a quick follow-up. We saw a decline in inventory levels. Was there something kind of unique about this quarter in terms of timing, or is the expectation to manage down inventory? Obviously that becomes a gross margin benefit for the balance of the year if it stays lower. Thanks.

Speaker #6: I'm very pleased with the progress we've made over the past year. As more and more stores rise above our standard and approach that grand opening look daily, the remaining ones become easier to manage simply due to the reduced volume.

Speaker #7: Or is the expectation to manage down inventory? Because obviously, that becomes a gross margin benefit for the balance of the year if it stays lower.

Speaker #7: Thanks.

Speaker #5: Good question. We've been very focused over the last 12 months at trying to manage that inventory. If you look back a year ago, we felt that our turns were just too slow.

Stewart Glendinning: Good question. We've been very focused over the last 12 months at trying to manage that inventory. If you look back a year ago, we felt that our turns were just too slow. We were carrying too much inventory. It was gumming up stores and distribution centers, taking too much storage space. It's been a very conscious effort over the past 12 months to reduce the inventory, and we think it's a really great result. If you looked at this quarter, if the inventory had just grown in line with the sales over this past 12 months, we would have $425 million more inventory than we have today. It's been a good result operationally to unclog the system, and it's also been a very good outcome for working capital efficiency.

Speaker #6: If every room in your house is a mess, it takes longer to clean it. As you start cleaning room to room, it gets easier to clean up the kitchen.

Michael Creedon: If every room in your house is a mess, it takes longer to clean it. As you start cleaning room to room, it gets easier to clean up the kitchen. That's really what Jossy and the team are doing. They're making that progress, and it's not linear. It starts to accelerate because of fewer stores to address.

Mike Creedon: If every room in your house is a mess, it takes longer to clean it. As you start cleaning room to room, it gets easier to clean up the kitchen. That's really what Jossy and the team are doing. They're making that progress, and it's not linear. It starts to accelerate because of fewer stores to address.

Speaker #5: We were carrying too much inventory. It was gumming up stores and distribution centers, taking too much storage space. So it's been a very conscious effort over the past 12 months to reduce the inventory.

Speaker #6: And that's really what Josie and the team are doing. They're making that progress. And it's not linear. It starts to accelerate because there are fewer stores to address.

Speaker #5: And we think it's a really great result. I mean, if you looked at this quarter, if the inventory had just grown in line with the sales over this past 12 months, we would have 425 million dollars more inventory than we have today.

Speaker #10: Thanks for that. And then just a quick follow-up. We saw a decline in inventory levels. Was there something kind of unique about this quarter in terms of timing?

Scot Ciccarelli: Thanks for that. Then just a quick follow-up. We saw a decline in inventory levels. Was there something kind of unique about this quarter in terms of timing? Is the expectation to manage down inventory? Obviously that becomes a gross margin benefit for the balance of the year if it stays lower. Thanks.

Speaker #5: So it's been a good result operationally to unclog the system. And it's also been a very good outcome for working capital efficiency. Thank you.

Speaker #10: Or is the expectation to manage down inventory? Because obviously, that becomes a gross margin benefit for the balance of the year if it stays lower.

Speaker #10: Thanks.

Speaker #8: Good question. We've been very focused over the last 12 months on trying to manage that inventory. If you look back a year ago, we felt that our turns were just too slow.

Speaker #5: Our next question today is coming from Edward Kelly from Wells Fargo. Your line is now live.

Operator: Thank you. Our next question today is coming from Edward Kelly from Wells Fargo. Your line is now live.

Speaker #8: Morning, guys. Stuart, I was hoping that you could pick up on freight for us. Historically, obviously, it's typically been a sizable headwind for Dollar Tree.

Speaker #8: We were carrying too much inventory. It was gumming up stores and distribution centers, taking too much storage space. So it's been a very conscious effort over the past 12 months to reduce the inventory.

Edward Kelly: Morning, guys.

Stewart Glendinning: Hey, good morning.

Mike Creedon: Hey, good morning.

Edward Kelly: Stewart, I was hoping that you could update on freight for us. Historically, obviously, it's typically been a sizable headwind for Dollar Tree when prices spike. Could you maybe just talk a bit more about ocean, domestic, spot versus contract? I guess overall, the real question here is how confident you are in your visibility in terms of any freight headwind being in guidance this year.

Speaker #8: And we think it's a really great result. I mean, if you looked at this quarter, if the inventory had just grown in line with the sales over this past 12 months, we would have 425 million dollars more inventory than we have today.

Speaker #8: When prices spike, could you maybe just talk a bit more about Ocean, Domestic, Spot versus Contract? And I guess overall, the real question here is how confident you are in your visibility in terms of any freight headwind being in guidance this year?

Speaker #8: So it's been a good result operationally to unclog the system. And it's also been a very good outcome for working capital efficiency. Thank you.

Speaker #5: Gotcha. Okay. Well, let's pick it apart. I mean, I think some of the comments that I've made in the last quarters, I would just sort of echo here today.

Stewart Glendinning: Got you. Okay. Well, let's pick it apart. I think some of the comments that I've made in the last quarters would just sort of echo here today. We had very favorable freight environment last year. There's been plenty of capacity in the marketplace. That hasn't changed dramatically through this point. As we were coming into the year, it was one of the things that was on my watch list as a potential downside. That hasn't manifested itself, which is sort of good news. We've been through most of our negotiations on freight, and the base rates for that freight movement have remained pretty favorable, actually. We haven't seen dramatic movements from last year. What is different, of course, is that everybody's facing a higher fuel bill, and it is perfectly reasonable to expect that our freight providers are going to be reimbursed for those higher costs.

Speaker #5: I mean, we had very favorable freight environment last year. I mean, it's been plenty of capacity in the marketplace. That hasn't changed dramatically through this point.

Operator: Thank you. Our next question today is coming from Edward Kelly from Wells Fargo.

Speaker #8: Our next question today is coming from Edward Kelly from Wells Fargo. Your line is now live.

Stewart Glendinning: Your line is now live.

Operator: Your line is now live.

Speaker #5: As we were coming into the year, it was one of the things that was on my watchlist as a potential downside. That hasn't manifested itself, which is sort of good news.

Edward Kelly: Morning, guys. Hey, Stewart, I was hoping that you could double click on freight for us. Historically, obviously, it's typically been a sizable headwind for Dollar Tree when prices spike. Could you maybe just talk a bit more about ocean, domestic, spot versus contract? I guess overall, the real question here is how confident you are in your visibility in terms of any freight headwind being in guidance this year.

Speaker #11: Morning, guys.

Speaker #6: Hey, Stuart. I was hoping that you could pick up on freight for us. Historically, obviously, it's typically been a sizable headwind for Dollar Tree.

Speaker #5: We've been through our most of our negotiations on freight. And the base rates for those for that freight movement have remained pretty favorable, actually.

Speaker #6: When prices spike, could you maybe just talk a bit more about Ocean, Domestic, Spot versus Contract? And I guess overall, the real question here is how confident you are in your visibility in terms of any freight headwind being in guidance this year?

Speaker #5: I mean, so we haven't seen dramatic movements from last year. What is different? Of course, is that everybody's facing a higher fuel bill. And it is perfectly reasonable to expect that our freight providers are going to be reimbursed for those higher costs.

Speaker #8: Gotcha. Okay. Well, let's pick it apart. I mean, I think some of the comments that I've made in the last quarters, I would just sort of echo here today.

Speaker #5: And so you're seeing freight surcharges, which are coming through, which are baked into our expectations for the remainder of the year. Last quarter, and maybe even the quarter before, I had warned that there may be some pressure on driver availability.

Speaker #8: I mean, we had very favorable freight environment last year. I mean, it's been plenty of capacity in the marketplace. That hasn't changed dramatically through this point.

Stewart Glendinning: You are seeing freight surcharges which are coming through, which are baked into our expectations for the remainder of the year. Last quarter, and maybe even the quarter before, I had warned that there may be some pressure on driver availability, and driver availability has been squeezed some. We have seen some incremental costs from driver costs, which we've baked into our numbers. All of that is in there. Just your last question, which is about sort of what do we think about spot or long-term contracts versus short-term. In the current environment, you want to avoid spot because those prices are very high. If you looked at the construct of our freight agreements, over the last couple of years, those have moved to more of a shorter-term bias, that is to say, a year or so, and that was conscious.

Speaker #8: As we were coming into the year, it was one of the things that was on my watchlist as a potential downside. That hasn't manifested itself, which is sort of good news.

Speaker #5: And driver availability has been squeezed some. And so we have seen some incremental costs from driver costs, which we've baked into our numbers. So all of that is in there.

Speaker #8: We've been through most of our negotiations on freight, and the base rates for that freight movement have remained pretty favorable, actually.

Speaker #5: And then just your last question, which is about sort of what do we think about Spot or long-term contracts versus short-term. In the current environment, you want to avoid Spot because those prices are very, very high.

Speaker #8: I mean, so we haven't seen dramatic movements from last year. What is different? Of course, is that everybody's facing a higher fuel bill. And it is perfectly reasonable to expect that our freight providers are going to be reimbursed for those higher costs.

Speaker #5: But if you looked at our construct of our freight agreements, over the last couple of years, those have moved to more of a shorter-term bias.

Speaker #8: And so you're seeing freight surcharges, which are coming through, which are baked into our expectations for the remainder of the year. Last quarter, and maybe even the quarter before, I had warned that there may be some pressure on driver availability and driver availability has been squeezed some.

Stewart Glendinning: You're seeing freight surcharges which are coming through, which are baked into our expectations for the remainder of the year. Last quarter, and maybe even the quarter before, I had warned that there may be some pressure on driver availability, and driver availability has been squeezed some. We have seen some incremental costs from driver costs, which we've baked into our numbers. All of that is in there. Just your last question, which is about sort of what do we think about spot or long-term contracts versus short-term.

Speaker #5: That is to say, a year or so. And that was conscious in the current environment. That is not a bad thing. Because we we'll be more tightly coupled with the marketplace.

Stewart Glendinning: In the current environment, that is not a bad thing because we actually see that we'll be more tightly coupled with the marketplace. We still have a mix of both, just to reassure you, but it's moved a little bit more towards the shorter timeframe.

Speaker #8: And so we have seen some incremental costs from driver costs, which we've baked into our numbers. So all of that is in there. And then just your last question, which is about sort of what do we think about Spot or long-term contracts versus short-term.

Speaker #5: So we still have a mix of both, just to reassure you. But it's moved a little bit more towards the shorter timeframe.

Speaker #8: Great. And then just quick follow-up. Helium, just thoughts on Helium supply? What you're seeing? How it may impact you for the balance of the year?

Edward Kelly: Great. Just quick follow-up. Helium, just thoughts on helium supply, what you're seeing, how it may impact you for the balance of the year?

Speaker #8: In the current environment, you want to avoid spot because those prices are very, very high. But if you look at the construct of our freight agreements over the last couple of years, those have moved to more of a shorter-term bias.

Michael Creedon: In the current environment, you want to avoid spot because those prices are very high. If you looked at the construct of our freight agreements, over the last couple of years, those have moved to more of a shorter-term bias. That is to say, a year or so, and that was conscious. In the current environment, that is not a bad thing because we actually see that we will be more tightly coupled with the marketplace. We still have a mix of both, just to reassure you, but it has moved a little bit more towards the shorter timeframe.

Stewart Glendinning: In the current environment, you want to avoid spot because those prices are very high. If you looked at the construct of our freight agreements, over the last couple of years, those have moved to more of a shorter-term bias. That is to say, a year or so, and that was conscious. In the current environment, that is not a bad thing because we actually see that we will be more tightly coupled with the marketplace. We still have a mix of both, just to reassure you, but it has moved a little bit more towards the shorter timeframe.

Speaker #1: Sure. Helium is still a bit tight across the industry. But overall, we feel good about how we're managing it. We came into this with a stronger inventory position as one of the largest buyers.

Michael C. Creedon, Jr.: Sure. Helium is still a bit tight across the industry, overall, we feel good about how we're managing it. We came into this with a stronger inventory position as one of the largest buyers, which really helps us from an access standpoint and is an improvement from where we were dealing with this in the past. I also like the timing. I wish we didn't have any helium shortages, I like the timing of it because if you think about big holidays, Valentine's Day being a huge demand. It came after Valentine's Day. We already had supply for Mother's Day and grads. We see demand now ease a bit, and we'll continue to work closely with our suppliers and use our scale to keep things flowing.

Mike Creedon: Sure. Helium is still a bit tight across the industry, overall, we feel good about how we're managing it. We came into this with a stronger inventory position as one of the largest buyers, which really helps us from an access standpoint and is an improvement from where we were dealing with this in the past. I also like the timing. I wish we didn't have any helium shortages, I like the timing of it because if you think about big holidays, Valentine's Day being a huge demand. It came after Valentine's Day. We already had supply for Mother's Day and grads. We see demand now ease a bit, and we'll continue to work closely with our suppliers and use our scale to keep things flowing.

Speaker #8: That is to say, a year or so, and that was conscious in the current environment. That is not a bad thing, because we actually see that we'll be more tightly coupled with the marketplace.

Speaker #1: Which really helps us from an access standpoint and is an improvement from where we were dealing with this in the past. I also like the timing.

Speaker #8: So we still have a mix of both, just to reassure you. But it's moved a little bit more towards the shorter timeframe. Great. And then just a quick follow-up.

Speaker #1: I wish we didn't have any Helium shortages. But I like the timing of it. Because if you think about Big Holidays, Valentine's Day being a huge demand, and then we were so it came after Valentine's Day.

Edward Kelly: Great. Then just quick follow-up. Helium, just thoughts on helium supply, what you're seeing, how it may impact you for the balance of the year?

Speaker #8: Helium—just thoughts on helium supply? What you're seeing? How it may impact you for the balance of the year?

Speaker #1: We already had supply from Mother's Day. And grads, and so we see demand now ease a bit. And we'll continue to work closely with our suppliers.

Speaker #6: Sure. Helium is still a bit tight across the industry. But overall, we feel good about how we're managing it. We came into this with a stronger inventory position as one of the largest buyers.

Michael Creedon: Sure. Helium is still a bit tight across the industry, but overall, we feel good about how we're managing it. We came into this with a stronger inventory position as one of the largest buyers, which really helps us from an access standpoint and is an improvement from where we were dealing with this in the past. I also like the timing. I wish we didn't have any helium shortages, but I like the timing of it because if you think about big holidays, Valentine's Day being a huge demand. It came after Valentine's Day. We already had supply for Mother's Day and grads. We see demand now ease a bit, and we'll continue to work closely with our suppliers and use our scale to keep things flowing.

Mike Creedon: Sure. Helium is still a bit tight across the industry, but overall, we feel good about how we're managing it. We came into this with a stronger inventory position as one of the largest buyers, which really helps us from an access standpoint and is an improvement from where we were dealing with this in the past. I also like the timing. I wish we didn't have any helium shortages, but I like the timing of it because if you think about big holidays, Valentine's Day being a huge demand. It came after Valentine's Day. We already had supply for Mother's Day and grads. We see demand now ease a bit, and we'll continue to work closely with our suppliers and use our scale to keep things flowing.

Speaker #1: And use our scale to keep things to keep things flowing. I do also want to mention I celebrated my son's 15th birthday on Saturday.

Michael C. Creedon, Jr.: I do also want to mention, I celebrated my son's 15th birthday on Saturday, plenty of helium balloons, but also the stick balloons, set up an entire table. I say that to say the substitutability at Dollar Tree is second to none. You want to come in and celebrate, we promise you we've got something for you to celebrate, and it looks great, and no one can match our value.

Mike Creedon: I do also want to mention, I celebrated my son's 15th birthday on Saturday, plenty of helium balloons, but also the stick balloons, set up an entire table. I say that to say the substitutability at Dollar Tree is second to none. You want to come in and celebrate, we promise you we've got something for you to celebrate, and it looks great, and no one can match our value.

Speaker #1: Plenty of Helium balloons. But also the stick balloons. Set up an entire table. I say that to say the substitutability at Dollar Tree is second to none.

Speaker #6: This really helps us from an access standpoint and is an improvement from where we were dealing with this in the past. I also like the timing.

Speaker #1: You want to come in and celebrate? We promise you we've got something for you to celebrate and it looks great. And no one can match our value.

Speaker #6: I wish we didn't have any Helium shortages. But I like the timing of it. Because if you think about Big Holidays, Valentine's Day being a huge demand, and then we were so it came after Valentine's Day.

Speaker #5: Thank you. Our next question is coming from John Heimbachl from Guggenheim Partners. Your line is now live.

Operator: Thank you. Our next question is coming from John Heinbockel from Guggenheim Partners. Your line is now live.

Speaker #6: We already had supply for Mother's Day and grads, and so we see demand now ease a bit. We'll continue to work closely with our suppliers.

Speaker #9: Hey, Mike. Two things tied together. What's your vision for marketing now that you've ramped it up in terms of what should you be spending where?

John Heinbockel: Hey, Mike, two things tied together. What's your vision for marketing now that you ramp it up in terms of what should you be spending where, right? I think about calls to action on a personalized basis to get people in for that extra trip. How do you think about that holistically? What's your outlook for UPT, right? That naturally should improve, right, as you cycle some of the tariff increases.

Speaker #6: And use our scale to keep things flowing. I do also want to mention I celebrated my son's 15th birthday on Saturday.

Speaker #9: Right? I think about calls to action on a personalized basis. Right? To get people in for that extra trip. How do you think about that holistically?

Michael Creedon: I do also want to mention, I celebrated my son's 15th birthday on Saturday, plenty of helium balloons, but also the stick balloons, set up an entire table. I say that to say the substitutability at Dollar Tree is second to none. You want to come in and celebrate, we promise you we've got something for you to celebrate and it looks great and no one can match our value.

Mike Creedon: I do also want to mention, I celebrated my son's 15th birthday on Saturday, plenty of helium balloons, but also the stick balloons, set up an entire table. I say that to say the substitutability at Dollar Tree is second to none. You want to come in and celebrate, we promise you we've got something for you to celebrate and it looks great and no one can match our value.

Speaker #6: Plenty of helium balloons, but also the stick balloons. Set up an entire table. I say that to say the substitutability at Dollar Tree is second to none.

Speaker #9: And then what's your outlook for UPT? Right? That naturally should improve. Right? As you cycle some of the tariff increases.

Speaker #6: You want to come in and celebrate? We promise you, we’ve got something for you to celebrate and it looks great. And no one can match our value.

Speaker #1: Yeah. Thanks, John. In terms of the marketing vision, we have a new muscle here. It's a test-and-learn muscle. So we're going to lean on that.

Michael C. Creedon, Jr.: Yeah, thanks, John. In terms of the marketing vision, we have a new muscle here. It's a test and learn muscle. We're going to lean on that. We've got data now that we've never had before, really leveraging elements of AI throughout our business to really get to know our customer better. I say that to say our test and learn is going to fuel what we do with marketing. When we do our banner ads, our pushes, when we do influencer social media, when we see things that hit, we're going to lean into that, and we're going to grow, always with an eye towards the returns on it.

Mike Creedon: Yeah, thanks, John. In terms of the marketing vision, we have a new muscle here. It's a test and learn muscle. We're going to lean on that. We've got data now that we've never had before, really leveraging elements of AI throughout our business to really get to know our customer better. I say that to say our test and learn is going to fuel what we do with marketing. When we do our banner ads, our pushes, when we do influencer social media, when we see things that hit, we're going to lean into that, and we're going to grow, always with an eye towards the returns on it.

Speaker #8: Thank you. Our next question is coming from John Heimbachl from Guggenheim Partners. Your line is now live.

Michael Creedon: Thank you. Our next question is coming from John Heinbockel from Guggenheim Partners. Your line is now live.

Operator: Thank you. Our next question is coming from John Heinbockel from Guggenheim Partners. Your line is now live.

Speaker #1: We've got data now that we've never had before. Really leveraging elements of AI throughout our business to really get to know our customer better.

Speaker #6: Hey, Mike. Two things tied together. What's your vision for marketing now that you've ramped it up? In terms of what should you be spending, and where?

John Heinbockel: Hey, Mike. Two things tied together. What's your vision for marketing now that you ramp it up in terms of what should you be spending where, right? I think about calls to action on a personalized basis, right, to get people in for that extra trip. Yeah. How do you think about that holistically? What's your outlook for UPT, right? That naturally should improve, right, as you cycle some of the tariff increases.

Speaker #1: And so I say that to say our test-and-learn is going to fuel what we do with marketing. So when we do our banner ads, our pushes, when we do influencer social media, when we see things that hit, we're going to lean into that.

Speaker #6: Right? I think about calls to action on a personalized basis, right? To get people in for that extra trip. How do you think about that holistically?

Speaker #6: And then what's your outlook for UPT? That naturally should improve as you cycle some of the tariff increases, right?

Speaker #1: And we're going to grow. Always with an eye towards the returns on it. So I said at the retail roundup earlier this year, don't think of us Super Bowl ad.

Michael C. Creedon, Jr.: I said at the retail roundup earlier this year, don't think of us Super Bowl ad, but definitely think of us leaning into social, leaning into targeted messaging to our customers to make sure they're aware of what's inside the box. Our unaided awareness at Dollar Tree is incredible. It's one of the highest in retail. What's in the box with our new expanded assortment has changed, and we want to tell our customer about that. We'll leverage test and learn to really lean in and over time, develop our long-term marketing vision. On the units front, we think about UPT as an output, not an input to our assortment. Given the growth in multi-price, units become less relevant as a marker. As I said at Investor Day, we're focused on space optimization and driving that shelf productivity.

Mike Creedon: I said at the retail roundup earlier this year, don't think of us Super Bowl ad, but definitely think of us leaning into social, leaning into targeted messaging to our customers to make sure they're aware of what's inside the box. Our unaided awareness at Dollar Tree is incredible. It's one of the highest in retail. What's in the box with our new expanded assortment has changed, and we want to tell our customer about that. We'll leverage test and learn to really lean in and over time, develop our long-term marketing vision. On the units front, we think about UPT as an output, not an input to our assortment. Given the growth in multi-price, units become less relevant as a marker. As I said at Investor Day, we're focused on space optimization and driving that shelf productivity.

Speaker #5: Yeah. Thanks, John. In terms of the marketing vision, we have a new muscle here. It's a test-and-learn muscle. So we're going to lean on that.

Michael Creedon: Yeah. Thanks, John. In terms of the marketing vision, we have a new muscle here. It's a test-and-learn muscle. We're going to lean on that. We've got data now, that we've never had before, really leveraging elements of AI throughout our business to really get to know our customer better. I say that to say our test and learn is going to fuel what we do with marketing. When we do our banner ads, our pushes, when we do influencer social media, when we see things that hit, we're going to lean into that and we're going to grow, always with an eye towards the returns on it.

Mike Creedon: Yeah. Thanks, John. In terms of the marketing vision, we have a new muscle here. It's a test-and-learn muscle. We're going to lean on that. We've got data now, that we've never had before, really leveraging elements of AI throughout our business to really get to know our customer better. I say that to say our test and learn is going to fuel what we do with marketing. When we do our banner ads, our pushes, when we do influencer social media, when we see things that hit, we're going to lean into that and we're going to grow, always with an eye towards the returns on it.

Speaker #1: But definitely think of us leaning into social, leaning into targeted messaging to our customers to make sure they're aware of what's inside the box.

Speaker #5: We've got data now that we've never had before, really leveraging elements of AI throughout our business to get to know our customer better.

Speaker #1: Our unaided awareness at Dollar Tree is incredible. It's one of the highest in retail. But what's in the box with our new expanded assortment has changed.

Speaker #5: And so I say that to say our test-and-learn is going to fuel what we do with marketing. So when we do our banner ads, our pushes, when we do influencer social media, when we see things that hit, we're going to lean into that.

Speaker #1: And we want to tell our customer about that. So we'll leverage test-and-learn to really lean in and over time develop our long-term marketing vision.

Speaker #1: On the units front, we think about UPT as an output, not an input to our assortment. Given the growth in multi-price, units become less relevant as a marker.

Speaker #5: And we're going to grow. Always with an eye towards the returns on it. So I said it. The retail roundup earlier this year. Don't think of us Super Bowl ad.

Michael Creedon: I said at the retail roundup earlier this year, don't think of us Super Bowl ad, but definitely think of us leaning into social, leaning into targeted messaging to our customers to make sure they're aware of what's inside the box. Our unaided awareness at Dollar Tree is incredible. It's one of the highest in retail. What's in the box with our new expanded assortment has changed, and we want to tell our customer about that. We'll leverage test and learn to really lean in and, over time, develop our long-term marketing vision. On the units front, we think about UPT as an output, not an input to our assortment. Given the growth in multi-price, units become less relevant as a marker.

Mike Creedon: I said at the retail roundup earlier this year, don't think of us Super Bowl ad, but definitely think of us leaning into social, leaning into targeted messaging to our customers to make sure they're aware of what's inside the box. Our unaided awareness at Dollar Tree is incredible. It's one of the highest in retail. What's in the box with our new expanded assortment has changed, and we want to tell our customer about that. We'll leverage test and learn to really lean in and, over time, develop our long-term marketing vision. On the units front, we think about UPT as an output, not an input to our assortment. Given the growth in multi-price, units become less relevant as a marker.

Speaker #1: As we said or I said at Investor Day, we're focused on space optimization and driving that shelf productivity. And so as such, we'll reallocate space to a more productive assortment.

Speaker #5: But definitely think of us leaning into social, leaning into targeted messaging to our customers. To make sure they're aware of what's inside the box.

Michael C. Creedon, Jr.: As such, we'll reallocate space to a more productive assortment. If a $5 hammer, Stewart's favorite thing, replaces four $1.25 units, your units come down, but we like what we see from the shelf, and the shelf is working harder than we had it working before. In Q1, units per transaction declined in line with our expectations. It's a natural output of this evolution I'm talking about. When we look longer term, our objective is to improve basket-building opportunities through broader assortment relevance, stronger consumables engagement, and a more compelling multi-price offering that drive increased shopping frequency and fill and complete that basket cross-category purchasing behavior. It's important, it's a little less relevant, but it's something we'll keep looking at, and it performs in line with our expectations.

Mike Creedon: As such, we'll reallocate space to a more productive assortment. If a $5 hammer, Stewart's favorite thing, replaces four $1.25 units, your units come down, but we like what we see from the shelf, and the shelf is working harder than we had it working before. In Q1, units per transaction declined in line with our expectations. It's a natural output of this evolution I'm talking about. When we look longer term, our objective is to improve basket-building opportunities through broader assortment relevance, stronger consumables engagement, and a more compelling multi-price offering that drive increased shopping frequency and fill and complete that basket cross-category purchasing behavior. It's important, it's a little less relevant, but it's something we'll keep looking at, and it performs in line with our expectations.

Speaker #1: So if a $5 hammer, Stewart's favorite thing, replaces $4.25 units, your units come down. But we like what we see from the shelf and the shelf is working harder than we had it working before.

Speaker #5: Our unaided awareness at Dollar Tree is incredible—it's one of the highest in retail. But what's in the box, with our new expanded assortment, has changed.

Speaker #5: And we want to tell our customer about that. So we'll leverage test-and-learn to really lean in and over time develop our long-term marketing vision.

Speaker #1: At Q1, units per transaction declined in line with our expectations. It's a natural output of this evolution I'm talking about. And when we look longer-term, our objective is to improve basket building opportunities through broader assortment relevance, stronger consumables engagement, and a more compelling multi-price offering.

Speaker #5: On the units front, we think about UPT as an output. Not an input to our assortment. Given the growth in multi-price, units become less relevant as a marker.

Speaker #5: I said at Investor Day, we're focused on space optimization and driving that shelf productivity. And so, as such, we'll reallocate space to a more productive assortment.

Michael Creedon: I said at Investor Day, we're focused on space optimization and driving that shelf productivity. As such, we'll reallocate space to a more productive assortment. If a $5 hammer, Stewart's favorite thing, replaces 4 $1.25 units, your units come down. We like what we see from the shelf. The shelf is working harder than we had it working before. In Q1, units per transaction declined in line with our expectations. It's a natural output of this evolution I'm talking about. When we look longer term, our objective is to improve basket-building opportunities through broader assortment relevance, stronger consumables engagement, and a more compelling multi-price offering that drive increased shopping frequency and fill and complete that basket cross-category purchasing behavior. It's important. It's a little less relevant. It's something we'll keep looking at. It performs in line with our expectations.

Mike Creedon: I said at Investor Day, we're focused on space optimization and driving that shelf productivity. As such, we'll reallocate space to a more productive assortment. If a $5 hammer, Stewart's favorite thing, replaces 4 $1.25 units, your units come down. We like what we see from the shelf. The shelf is working harder than we had it working before. In Q1, units per transaction declined in line with our expectations. It's a natural output of this evolution I'm talking about. When we look longer term, our objective is to improve basket-building opportunities through broader assortment relevance, stronger consumables engagement, and a more compelling multi-price offering that drive increased shopping frequency and fill and complete that basket cross-category purchasing behavior. It's important. It's a little less relevant. It's something we'll keep looking at. It performs in line with our expectations.

Speaker #1: That drive increased shopping frequency and fill and complete that basket cross-category purchasing behavior. So it's important. It's a little less relevant. But it's something we'll keep looking at.

Speaker #5: So if a $5 hammer, Stewart's favorite thing, replaces $4.25 units, your units come down. But we like what we see from the shelf and the shelf is working harder than we had it working before.

Speaker #1: And it performs in line with our expectations.

Speaker #5: Thank you.

Speaker #1: You bet.

John Heinbockel: Thank you.

Speaker #5: Thank you. We reached the end of our question and answer session. I'd like to turn the floor back over to Mike for any further closing comments.

Speaker #5: In Q1, units per transaction declined in line with our expectations. It's a natural output of this evolution I'm talking about. And when we look longer-term, our objective is to improve basket building opportunities through broader assortment relevance, stronger consumables engagement, and a more compelling multi-price offering.

Michael C. Creedon, Jr.: You bet.

Mike Creedon: You bet.

Operator: Thank you. We've reached the end of our question and answer session. I'd like to turn the floor back over to Mike for any further closing comments.

Speaker #1: Thank you. And thanks, everybody, for joining us today. And for your continued interest in Dollar Tree. I'd like to once again thank our 150,000-plus Dollar Tree associates who make magic.

Michael C. Creedon, Jr.: Thank you. Thanks everybody for joining us today and for your continued interest in Dollar Tree. I'd like to once again thank our 150,000-plus Dollar Tree associates who make magic. We appreciate you. Thanks for the time. Speak with you again next quarter.

Mike Creedon: Thank you. Thanks everybody for joining us today and for your continued interest in Dollar Tree. I'd like to once again thank our 150,000-plus Dollar Tree associates who make magic. We appreciate you. Thanks for the time. Speak with you again next quarter.

Speaker #1: We appreciate you. Thanks for the time. Speak with you again next quarter.

Speaker #5: Thank you. That does conclude today's teleconference and webcast. Let me disconnect your lines at this time. And have a wonderful day. We thank you for your participation today.

Speaker #5: That drive increased shopping frequency and fill and complete that basket cross-category purchasing behavior. So it's important. It's a little less relevant. But it's something we'll keep looking at.

Operator: Thank you. That does conclude today's teleconference and webcast. You may disconnect your lines at this time, and have a wonderful day. We thank you for your participation today.

Speaker #5: And it performs in line with our expectations.

Speaker #8: Thank you.

John Heinbockel: Thank you.

Speaker #5: You bet.

Michael Creedon: You bet.

Mike Creedon: You bet.

Speaker #8: Thank you. We reached the end of our question and answer session. I'd like to turn the floor back over to Mike for any further closing comments.

Michael Creedon: Thank you. We've reached the end of our question and answer session. I'd like to turn the floor back over to Mike for any further closing comments.

Operator: Thank you. We've reached the end of our question and answer session. I'd like to turn the floor back over to Mike for any further closing comments.

Speaker #6: Thank you. And thanks, everybody, for joining us today. And for your continued interest in Dollar Tree. I'd like to once again thank our 150,000-plus Dollar Tree associates.

Michael Creedon: Thank you. Thanks everybody for joining us today and for your continued interest in Dollar Tree. I'd like to once again thank our 150,000-plus Dollar Tree associates who make magic. We appreciate you. Thanks for the time. Speak with you again next quarter.

Speaker #6: Who make the magic. We appreciate you. Thanks for the time. Speak with you again next quarter.

Speaker #8: Thank you. That does conclude today's teleconference and webcast. Let me disconnect your lines at this time. And have a wonderful day. We thank you for your participation today.

Michael Creedon: Thank you. That does conclude today's teleconference and webcast. You may disconnect your lines at this time and have a wonderful day. We thank you for your participation today.

Operator: Thank you. That does conclude today's teleconference and webcast. You may disconnect your lines at this time and have a wonderful day. We thank you for your participation today.