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Virginia-based Dollar Tree, Inc. (DLTR) operates discount variety stores in major metropolitan areas, mid-sized cities, and small towns and offers a wide range of everyday merchandise, including housewares, seasonal goods, candy, food, toys, health and beauty care, gifts, party goods, stationery, books, personal accessories, and other consumer items. Its market cap currently stands at $22.3 billion. DLTR is scheduled to release its fiscal 2024 Q2 earnings results on Thursday, Aug. 22.
Ahead of the event, analysts expect Dollar Tree to report a profit of $1.06 per share, up 16.5% from $0.91 per share in the year-ago quarter. The company has exceeded or met Wall Street’s EPS estimates in two of the last four quarters while missing on two other occasions. Dollar Tree’s EPS of $1.43 for the last reported quarter was in line with the consensus estimate.
Looking ahead, analysts expect Dollar Tree to report an EPS of $6.63 in fiscal 2024, up 12.6% from $5.89 in fiscal year 2023. Moreover, its fiscal 2025 EPS is projected to rise 18.3% annually to $7.84.
Over the past 52 weeks, DLTR stock has plunged by 30.9%, trailing behind the broader S&P 500 Index's ($SPX) 18.6% gains and the Consumer Staples Select Sector SPDR Fund’s (XLP) 2.5% returns during the same period.
Dollar Tree's underperformance relative to the broader market can be attributed to weak discretionary demand and intense competition in the retail sector. Additionally, the company is exploring options, including selling or spinning off its Family Dollar banner, which it acquired in 2015 and has been its main underperformer. As part of its restructuring effort in response to persistent high inflation affecting consumer spending, Dollar Tree announced plans earlier this year to shutter 970 Family Dollar stores.
Additionally, the stock dipped 4.9% after Dollar Tree disclosed its Q1 earnings report on June 5. Although revenue and EPS matched consensus estimates, the company projected adjusted profit for fiscal 2024 to be between $6.50 and $7 per share, with the midpoint below LSEG estimates of $6.89. The outlook also reflects increased transportation costs due to the loss of a distribution center in Oklahoma from a tornado.
The current consensus opinion on Dollar Tree stock is “Moderate Buy” overall. Out of 21 analysts covering the stock, 12 suggest a “Strong Buy,” eight recommend a “Hold,” and the remaining one analyst advocates a “Moderate Sell.”
Furthermore, the average analyst price for DLTR is $138.09, indicating a potential upside of 31.1% from the current price levels.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
