Dollar Tree (DLTR) stock jumped out of the gate Wednesday after the dollar store chain beat top- and bottom-line expectations for its fiscal third quarter and raised the low end of its revenue forecast for its full fiscal year.
In the 13 weeks ended November 2, Dollar Tree's revenue increased 3.5% to $7.6 billion, boosted by 1.8% same-store sales growth. Its earnings per share (EPS) were up 15.5% from the year-ago period to $1.12.
"Our Dollar Tree and Family Dollar merchandising efforts produced tangible results, and our third-quarter sales came in at the high-end of our expected range," said interim CEO Mike Creedon in a statement. "As an organization, our top priorities remain accelerating the growth of the Dollar Tree segment, completing the Family Dollar strategic review process, and unlocking value for Dollar Tree shareholders."
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 topped analysts' expectations. Wall Street was anticipating revenue of $7.4 billion and earnings of $1.08 per share, according to Yahoo Finance.
Dollar Tree also updated its guidance for the full year, including raising the low end of its revenue forecast and narrowing its EPS forecast.
The company now expects to achieve revenue in the range of $30.7 billion to $30.9 billion and earnings per share of $5.31 to $5.51. DLTR had previously called for revenue in the range of $30.6 billion to $30.9 billion and earnings per share between $5.20 to $5.60. It added that it continues to anticipate comparable-store sales growth in the low-single-digits.
In addition, Dollar Tree announced that its chief financial officer, Jeff Davis, is stepping down and an external search for his replacement is underway.
Is Dollar Tree stock a buy, sell or hold?
Dollar Tree has struggled on the price charts in 2024, and is down 43% for the year to date. Unsurprisingly, Wall Street is on the sidelines when it comes to the consumer staples stock.
According to S&P Global Market Intelligence, the average analyst target price for DLTR stock is $82.47, representing implied upside of more than 11% to current levels. Meanwhile, the consensus recommendation is a Hold.
But some analysts have kept the faith on the large-cap stock. Financial services firm UBS Global Research, for instance, has a Buy rating and $105 price target on Dollar Tree.
"Overall, we think the stock simply prices in too much risk at current levels, with some key catalysts being overlooked," said UBS analyst Michael Lasser in a November 22 note.
Lasser says he sees "several catalysts that should drive the stock higher in the near to medium term," including DLTR being a beneficiary to moderating inflation or deflation in some categories and an improvement in profitability from its portfolio review of its Family Dollar brand.
Related Content
-
Do You Need a Family Office? Four Signs for the Very WealthyYou may need a family office if you are a high-net-worth individual, because being wealthy turns a family into a family business.
-
Wealth Advisers: In Estate Planning, the End Is Just the BeginningWe need to keep the lines of communication with our clients open so that we can anticipate and help them navigate issues that arise over time.
-
Wealth Advisers: In Estate Planning, the End Is Just the Beginning
We need to keep the lines of communication with our clients open so that we can anticipate and help them navigate issues that arise over time.
-
Stood Up by a Radio Show: But Was It a Breach of Contract?A conscientious financial planner reschedules his clients after being invited onto a talk show and ends up losing one of them at a cost of $5,000. What does the radio show owe him, if anything?
-
Stock Market Today: Stocks Stable as Inflation, Tariff Fears EbbConstructive trade war talks and improving consumer expectations are a healthy combination for financial markets.
-
Eight Estate Planning Steps to Protect Your Loved Ones (and Your Legacy)Two-thirds of Americans don't have an estate plan. If you're one of them, these are the essential steps to take now to prevent problems for your family later.
-
The Six Pros This Adviser Says You Need to Sell Your BusinessSelling your business isn't as simple as getting the best price and walking away. These are the six professionals you'll need to get a deal across the finish line.
-
The Three C's to Financial Success: A Financial Planner's Guide to Build WealthConsistency, commitment and confidence in your chosen strategy are more critical to your financial success than finding the 'perfect' financial plan.
-
A Financial Adviser's Guide to Solving Your Retirement Puzzle: Five Key PiecesIf retirement's a puzzle you're struggling with, try answering these five questions. The answers will guide you toward a solution.
-
You're Close to Retirement and Cashed Out: How Do You Get Back In?If you've been scared into an all-cash position, it's wise to consider reinvesting your money in the markets. Here's how a financial planner recommends you can get back in the saddle.
