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."
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free 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
-
Choose a Beneficiary for Your Estate Plan: It's Not 'Duck, Duck, Goose'Choosing a beneficiary for your 401(k), insurance policy or similar assets is crucial for estate planning. Here is how to do it, and six pitfalls to avoid.
-
T-Mobile's Free iPhone 17 Deal: A Smart Switch or a Hidden Catch?Receive a free iPhone 17 when you switch to T-Mobile. We'll explain whether the deal is worth it.
-
How an Expired Passport Thwarted Blackmail (and What Other Important Documents You Should Keep)An optometrist produced his expired passport to foil a blackmail attempt by the daughter of a former employee. After proving he was out of the country on the date of a forged diary entry, he took it a step further.
-
Optimize, Grow, Retain: The Power of Annual Client ReviewsFinancial advisers can use annual reviews to help enhance client outcomes, strengthen relationships and build their practice.
-
I'm a Real Estate Investing Pro: This Is What Investors Should Know About Truck Stop InvestmentsTruck stops might seem like good investments, but they can actually be a risky gamble due to unstable fuel prices, unreliable operators and coming changes in transportation. Instead, consider safer options like industrial or residential properties.
-
How Digital Platforms Are Changing the Way You Invest in GoldInvesting in gold is easier than ever thanks to digital platforms. Learn how online tools are lowering costs, increasing transparency and making gold accessible to all investors.
-
Stocks Rise to Start Fed Week: Stock Market TodayThe Nasdaq Composite and S&P 500 hit new record closing highs as Wall Street awaits the Fed's next rate cut.
-
Don't Disinherit Your Grandchildren: The Hidden Risks of Retirement Account Beneficiary FormsStandard retirement account beneficiary forms may not be flexible enough to ensure your money passes to family members according to your wishes. Naming a trust as the contingent beneficiary can help avoid these issues. Here's how.
-
This Is How Life Insurance Can Fund Your Dreams NowBeyond a death benefit, life insurance can provide significant financial value and flexibility through 'living benefits' while you are still alive, helping with expenses like education, business ventures or retirement.
-
Potential Trouble for Retirees: A Wealth Adviser's Guide to the OBBB's Impact on RetirementWhile some provisions might help, others could push you into a higher tax bracket and raise your costs. Be strategic about Roth conversions, charitable donations, estate tax plans and health care expenditures.
