Dollar Tree (NASDAQ:DLTR) posted third-quarter same-store sales that edged past expectations, helped by exceptionally strong Halloween-related demand.

Comparable sales increased 4.2% for the quarter ended November 1, slightly above the Bloomberg consensus projection of 4.17%. Net sales reached $4.75 billion, also topping estimates.

Adjusted operating income rose 4.1% year over year to $345 million, resulting in adjusted diluted EPS of $1.21.

“Our multi-price strategy drove strong momentum across our business in the third quarter and helped deliver an all-time record Halloween season,” said CEO Mike Creedon.

With inflation and economic uncertainty weighing on household budgets, U.S. shoppers have increasingly gravitated toward discount retailers such as Dollar Tree, Five Below (NASDAQ:FIVE), and Dollar General (NYSE:DG). Analysts at UBS noted that Dollar Tree leaned heavily into seasonal promotions — especially for back-to-school and Halloween — to attract cost-conscious consumers seeking value.

For the fourth quarter, which encompasses the crucial holiday shopping stretch, the company projected same-store sales growth of 4% to 6% and adjusted EPS from continuing operations of $2.40 to $2.60.

UBS analysts said consumer reaction to higher prices tied to broad U.S. tariffs will be an important swing factor for the quarter. They warned that shoppers may face “a more pronounced amount” of price increases on many holiday goods, given their heavy import mix.

“So far, elasticities appear to be relatively contained across retail. Though, this is still a point of uncertainty for the fourth quarter,” the analysts wrote, adding that this dynamic “could prove to be a risk to Dollar Tree, given the nature of their product mix.”

Dollar Tree shares gained more than 2% in premarket trading on Wednesday.

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