09:24 AM EDT, 06/04/2025 (MT Newswires) -- Dollar Tree ( DLTR ) on Wednesday reported better-than-expected fiscal first-quarter results, but the discount retailer forecast an earnings decline of up to 50% for the ongoing three-month period amid the impact of tariffs.

The company estimates per-share adjusted earnings from continuing operations for the ongoing quarter to be down as much as 45% to 50% on a yearly basis, before re-accelerating in the subsequent two quarters to meet its full-year profit guidance. The current consensus on FactSet is for non-GAAP EPS of $0.66.

The retailer expects to see some earnings volatility in the near term due to the timing of "various inputs and outputs" to its financial results. Over the balance of fiscal 2025, it anticipates to offset the earnings impact of cost pressures, including higher tariffs. The stock was down 1% in the most recent premarket activity.

"We expect our second quarter profits to be meaningfully lower than last year in light of higher tariff and other costs, including some costs we absorbed during the 145% window on China tariffs," Chief Financial Officer Stewart Glendinning said during an earnings call, according to a FactSet transcript.

Second-quarter comparable sales are projected to increase towards the higher end of its 3% to 5% growth outlook range for the ongoing fiscal year, the company said. The Street is looking for same-store sales to rise by 3.7% for the quarter.

For fiscal 2025, Dollar Tree ( DLTR ) now expects adjusted EPS from continuing operations to come in between $5.15 and $5.65, up from its previous guidance of $5 to $5.50, reflecting the impact of its year-to-date share repurchases. The current average analyst estimate on FactSet is for non-GAAP EPS of $5.27.

The company continues to forecast a per-share hit of roughly $0.30 to $0.35 to its full-year earnings due to a transition services agreement related to the proposed sale of its Family Dollar business, announced in March. Under the agreement, Dollar Tree ( DLTR ) will bear the costs to support Family Dollar while receiving only offsetting reimbursement income in the second half.

The retailer reiterated its fiscal 2025 sales outlook of $18.5 billion to $19.1 billion, compared with the market's forecast of $19.58 billion. The full-year guidance assumes that tariffs as of Wednesday remain in effect for the remainder of the year, with the company expecting to offset "most of the incremental margin pressure" from higher duties and other input costs.

Global trade tensions were recently renewed after the US and China accused each other of violating a preliminary trade deal reached between the two countries last month. Recently, the US Court of International Trade ruled that Trump overstepped his authority by imposing duties under the International Emergency Economic Powers Act, but a federal appeals court temporarily paused that decision.

For the three-month period ended May 3, the retailer's adjusted EPS from continuing operations came in at $1.26, up from $1.23 the year before. The consensus on FactSet was for $1.21. Sales climbed 11% to $4.64 billion, topping the Street's view for $4.54 billion.

Same-store sales rose 5.4%, surpassing the 4% gain modeled by the Street at the enterprise level, buoyed by gains in traffic and average ticket. "Our strong first quarter performance underscores the progress we've made against our strategic priorities and is a clear signal that our customers are responding positively to the changes we are making," Chief Executive Mike Creedon said in the earnings release.