Dollar Tree (DLTR) stock fell 5% Wednesday after the dollar-store chain reported revenue and earnings results that were in-line with analysts' expectations and announced a strategic review of its Family Dollar business segment, which could include a sale.
In the 13 weeks ended May 4, the retailer saw its revenue rise 4.2% year-over-year to $7.6 billion, driven by a 1.7% increase in same-store sales at its Dollar Tree segment. The company said earnings per share (EPS) came in at $1.43, a decrease of 2.7% from the year-ago period.
"Our operating performance was solid despite a soft Easter season for Dollar Tree," said Jeff Davis, chief financial officer of Dollar Tree, in a statement. "The results reflect our operating discipline and careful expense management throughout the quarter."
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The results were in-line with analysts expectations. According to CNBC, Wall Street was anticipating revenue of $7.6 billion and earnings of $1.42 per share.
Dollar Tree also reiterated its full-year sales forecast, which calls for net sales in the range of $31 billion to $32 billion. However, the dollar store lowered its earnings per share outlook to $6.50 to $7 from $6.70 to $7.30 due to issues related to tornado damage at its distribution center in Oklahoma.
Why would Dollar Tree sell Family Dollar?
In a separate press release, Dollar Tree announced a strategic review of its Family Dollar business segment, which "could include among others, a potential sale, spin off or other disposition of the business." This move comes less than three months after the company announced it would close 970 underperforming Family Dollar stores.
"The unique needs of each banner at this time – transformation at Family Dollar and growth acceleration at Dollar Tree – lead us to the decision to conduct a thorough review of strategic alternatives for the Family Dollar business," Dollar Tree CEO Rick Dreiling said in a statement. The ultimate goal is to help both brands "progress further and faster, and to determine whether the exclusive attention of a dedicated team will benefit both, while creating value for Dollar Tree shareholders and other stakeholders."
Dollar Tree did not provide a timeline for any potential transaction.
Is Dollar Tree stock a buy, sell or hold?
The consumer staples stock has struggled on the charts this year, down roughly 20%. Still, analysts are overwhelmingly bullish toward DLTR.
According to S&P Global Market Intelligence, the consensus analyst target price for DLTR stock is $146.92, representing implied upside of nearly 30% to current levels. Meanwhile, the consensus recommendation is a Buy.
Related Content
-
Could a Golden Visa Be Your Ticket to Retiring Abroad?Trump and DOGE are weighing a U.S. "Gold Card" that would let the wealthy emigrate to the U.S. for a fee. But golden visas have been around for years worldwide. Here's how they work.
-
Running Out of Money in Retirement: Nine Steps to Reduce the RiskQuit worrying about money and enjoy a carefree retirement. Sounds good, right? Well, if you follow these nine steps from a financial adviser, you could be on your way to that goal.
-
Running Out of Money in Retirement: Nine Steps to Reduce the Risk
Quit worrying about money and enjoy a carefree retirement. Sounds good, right? Well, if you follow these nine steps from a financial adviser, you could be on your way to that goal.
-
I'm a Financial Planner: Here Are Five Lesser-Known Ways to Avoid Estate TaxThe clock is ticking on the estate and gift tax provisions in the Tax Cuts and Jobs Act, so the sooner you act on removing assets from your estate, the better.
-
Is a Silent Wealth Killer Stalking Your Retirement?Poor tax planning can drain your retirement of tens or even hundreds of thousands. Stop the bleeding with a laser focus on tax efficiency.
-
Put Time on Your Side With This Simple Retirement StrategyA financial professional recommends thinking in terms of three financial stages — active years, slower-paced years and later years — assigning each one a unique bucket of investments.
-
Stock Market Today: Investors Weigh Weekend NegotiationsInvestors, traders and speculators will look to Switzerland for answers about the most compelling issue confronting global markets.
-
NOBL: An ETF For Dividend AristocratsThe S&P 500 Dividend Aristocrats index consists of companies that have increased dividends for at least 25 consecutive years — and only one U.S. fund tracks it.
-
Five Opportunities if You're in the 2% Club in RetirementIf you're among the 2% of the population with both a pension and $1 million or more saved, you're in a unique yet complex position as you approach retirement.
-
I'm an Insurance Expert: This Is How You Get the Right Insurance Coverage at the Right PriceFirst, you have to know what you want and ask the right questions of the right professional. This insurance pro explains exactly how to do that.
