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
-
Aging: The Overlooked Risk FactorSponsored Elder care is a personal and financial vulnerability many people fail to plan for.
-
AI vs the Stock Market: How Did Alphabet, Nike and Industrial Stocks Perform in June?AI is a new tool to help investors analyze data, but can it beat the stock market? Here's how a chatbot's stock picks fared in June.
-
AI vs the Stock Market: How Did Alphabet, Nike and Industrial Stocks Perform in June?
AI is a new tool to help investors analyze data, but can it beat the stock market? Here's how a chatbot's stock picks fared in June.
-
Stock Market Today: A Historic Quarter Closes on High Notes"All's well that ends well" is one way to describe the second quarter of 2025, at least from a pure price-action perspective.
-
Keep Tax Collectors at Bay with Muni Bond FundsMunicipal bonds can be good insurance against inflation — and interest is tax-free. But as with all investments, understanding risk is key.
-
Eight Tips From a Financial Caddie: How to Keep Your Retirement on the FairwayThink of your financial adviser as a golf caddie — giving you the advice you need to nail the retirement course, avoiding financial bunkers and bogeys.
-
Just Sold Your Business? Avoid These Five Hasty MovesIf you've exited your business, financial advice is likely to be flooding in from all quarters. But wait until the dust settles before making any big moves.
-
Cord Cutting Could Help You Save Over $10,000 in 10 YearsHow cutting the cord can save you money and how those savings can grow over time.
-
Should I Buy Stocks or Bonds Right Now?Generally speaking, stocks provide reasonable growth while bonds provide stable income. Each play important roles in diversified portfolios.
-
You Were Planning to Retire This Year: Should You Go Ahead?If the economic climate is making you doubt whether you should retire this year, these three questions will help you make up your mind.
