What happened

Shares of Dollar Tree (NASDAQ:DLTR) were jumping 10% higher in morning trading on Tuesday after the company announced third-quarter earnings that handily beat analyst expectations.

So what

The deep discount retailer was a laggard through the early part of the coronavirus pandemic despite its value proposition being one that should have appealed to consumers uncertain about the economy.

Shopping cart filled with coins

Image source: Getty Images.

However, its namesake chain stumbled while the Family Dollar banner regained its footing. That kind of mixed messaging was missing in the third quarter as Dollar Tree posted solid sales growth and saw profits surge 29% in the period as same-store sales at both chains rose for the first time in a long time.

Now what

One of the ideas Dollar Tree has been experimenting with is introducing higher priced goods at its self-named stores. Long a pure play in the dollar store game, the retailer began offering dedicated aisles for products that were priced in the $3 to $5 range as a means of continuing to provide value to consumers.

It's been well received by customers and Dollar Tree said it would expand the concept to 500 stores in the spring.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.