Adds shares, details and background throughout

May 28 (Reuters) - Dollar Tree DLTR.O raised its annual profit forecast on Thursday, buoyed by strong demand for affordable essentials from budget‑conscious shoppers and its cost‑cutting efforts, sending its shares up about 12% in premarket trading.

Rising cost of living due to higher gasoline prices linked to the war in Iran has pushed customers to prioritize value, boosting sales at dollar-store operators, such as Dollar Tree.

The Chesapeake, Virginia-based company has also been benefiting from updated store layouts, better product selection for shoppers, and stronger seasonal displays.

The company forecast fiscal 2026 adjusted earnings per share of $6.70 to $7.10, compared with its prior forecast of $6.50 to $6.90.

It said the forecast excluded the impact of tariff refunds, totaling about $110 million through May 26.