Dollar Tree will sell the majority of its products for more than $1, departing from the discount chain's name-brand strategy.

Dollar Tree is raising its regular price point to $1.25 by the end of April, after 35 years of selling things for a buck, the firm announced Tuesday. Despite the fact that the decision is "not a reaction to short-term or transitory market conditions," Dollar Tree acknowledged the inflationary environment and claimed the price hike will assist manage historically high costs, such as freight and distribution charges, as well as pay increases.

In a statement, Chief Executive Officer Michael Witynski said, "Lifting the one-dollar constraint signifies a tremendous stride for our company." Dollar Tree will be able to extend its product lineup as a result of the move, as well as reintroduce some items that were dropped owing to the $1 restriction.

As the cost of many things rises due to inflation, the decision marks the end of an era for Dollar Tree, which has long centered its operations on the price point.Dollar Tree - Wikipedia

The higher pricing was recently pushed out in a few places, and the testing "showed broad consumer acceptability of the new price point," according to Witynski. In December, Dollar Tree aims to expand the program to over 2,000 additional locations, with the goal of completing the rollout by the end of the fiscal year 2022.

After the business trimmed its profits projection and produced results that were broadly in line with Wall Street's expectations, the stock fell 1.9% before regular trading in New York. It said in a statement that earnings this year will be $5.48 to $5.58 per share, up from a previous forecast of $5.40 to $5.60.