Dollar Tree (DLTR)

The sleeper story is that Dollar Tree's traffic decline is actually much better than their historical precedent - down only 1.2% vs 4% when they broke the dollar in 2022, while adding 6.5 million households. The market will focus on negative traffic, but they're actually ahead of their playbook. The binding constraint right now is customer visit frequency, not acquisition - they're gaining households but need to convert them to higher-frequency shoppers. Creedon's most revealing quote: 'We're seeing a traffic trend that is above prior reset levels, outperforming our historical experience.' They're sandbagging traffic expectations while multi-price quietly becomes a margin machine at 16% of sales. My view changes if traffic doesn't turn positive by Q2 2026 despite their confidence, or if the household adds don't translate to frequency gains over the next two quarters.