Dollar Tree, Inc.

Greetings and welcome to the Dollar Tree Q2 2026 earnings conference call. 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 question queue at any time by pressing star 1 on your telephone keypad. We ask that you please ask one question and one follow-up to return to the queue. As a reminder, this conference is being recorded. If anyone should require operator assistance, please press star 0 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.

Thank you, Operator. Good morning, everyone, and thank you for joining us today to discuss Dollar Tree's second quarter fiscal 2026 results. 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 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. For information on the risks and uncertainties that could affect our actual results, please see the Risk Factors, Business, and Management Discussions and Analysis of Financial Condition and Results of Operations Section in our annual report on Form 10-K, filed on March 16, 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, and 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. Additionally, unless otherwise stated, all discussions today refer to our results from continuing operations and all comparisons discussed today for the second quarter 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 Stewart will take your questions. Please limit yourself to one question and one follow-up question. and with that I'll turn the call over to Mike.

Thanks Daniel and good morning everyone. I want to start by recognizing the more than 150,000 associates across Dollar Tree whose commitment to our customers drives everything we do. They're creating a more relevant shopping experience through a better assortment, better run stores, more consistent execution and a customer first mindset that was reflected in our results this quarter. The second quarter represented another period of progress for Dollar Tree. Improved execution across the business drove financial results above the high end of our outlook range. We're building a stronger business by investing and strengthening the value, convenience, and discovery we provide our customers. And the quarter's results reflect those efforts. The Dollar Tree team delivered robust top and bottom line results. Net sales growth increased 7% to $4.9 billion. Comp store sales growth increased 3.7%, exceeding our expectations. Customer traffic was positive, 0.4%, while average ticket increased 3.3%. Diluted earnings per share were $2.70. That includes $1.31 from the combined net impact of tariff refunds, reinvestments, and certain duties on aluminum pans and paper plates. Beyond these discrete impacts, the underlying business continues to strengthen. We are driving a better assortment in more and better run stores and speaking to our customers in ways we never have before. While it's still early, the customer response and performance we're seeing gives us confidence in these initiatives and in the long-term opportunity ahead. Improving the fundamentals of a nearly 9,500 small box retail business takes time. It starts with getting the basic blocking and tackling right. We are running cleaner, brighter, and better stock stores. We're encouraged that those everyday operational improvements are becoming more visible in both our customer metrics and financial results.