There is a Dollar Tree store.
John Greim/ LightRocket is pictured.
Dollar Tree stock rose Tuesday after the discount chain announced that it was changing its price point from everything for $1 to $1.25.
Management noted prices of $3 and $5 as well as $1.25 and $1.50 in September.
Dollar Tree said on Tuesday that it will raise prices on most of its products to $1.25 by the first quarter of next year. "This decision is permanent."
The stock of Dollar Tree reached its highest point since 1995 at 11:25 a.m. The company reported third-quarter earnings that beat estimates.
The company maintained during its earnings call that this move was not a reaction to short-term or transitory market conditions.
The company said that the base price would be bumped away from the $1 price point in order to continue offering extreme value to customers. The company will be able to return profit margins to their longstanding levels of 35% to 36% next year.
In August, CEO Michael Witynski acknowledged concerns about inflation and the rising cost of goods, shipping and labor.
The retailer said it was encouraged by the positive customer feedback and store performance during the initial testing phase of the new price point.
Almost all of the shoppers said they would continue to shop at Dollar Tree despite the increased price, the company said.
"Lifting the one-dollar constraint is a monumental step for our organization," Witynski said.
Business Insider has an original article.
