Retail

What to Watch When Dollar Tree Reports Wednesday Morning

Chris Lange

Dollar Tree Inc. (NASDAQ: DLTR) is set to release its fiscal fourth-quarter earnings report before the markets open on Wednesday. Analysts expect $1.75 in earnings per share (EPS) and $6.39 billion in revenue. In the same period of last year, the specialty retailer said it had $1.93 in EPS and $6.21 billion.

Dollar Tree’s previously issued guidance for the fourth quarter called for EPS in the range of $1.70 to $1.80 and revenue between $6.33 billion and $6.44 billion.

During Dollar Tree’s fiscal third quarter, enterprise same-store sales increased by 2.5%. Same-store sales for the Dollar Tree banner increased by 2.8%, and same-store sales for the Family Dollar banner increased by 2.3%. Increases in both average ticket and transaction count drove the comparable store sales results at both segments.

Management has noted that fiscal 2019 has been a unique year as the result of several factors: the material acceleration in its Family Dollar store optimization initiatives, the consolidation of two store support centers into southeast Virginia, the global helium shortage and the continued uncertainty regarding trade and the related tariffs. E-commerce versus brick-and-mortar trends also could have an impact on this dollar chain when it reports Wednesday morning.

Excluding Tuesday’s move, Dollar Tree stock had underperformed the broad markets with a decline 10% year to date. In the past 52 weeks, the stock was closer to 12% lower.

Here’s what analysts had to say ahead of the report:

  • Tesley Advisory Group has a Market Perform rating.
  • Raymond James has a Market Perform rating.
  • Sanford Bernstein rates it a Buy with a $110 price target.
  • Merrill Lynch has a Neutral rating and a $95 price target.
  • Morgan Stanley’s Equal Weight rating comes with a $105 target.

Dollar Tree stock was last seen down about 2% at $82.77 on Tuesday, in a 52-week range of $80.69 to $119.71. The consensus price target is $101.83.