A private investor | ex-NYSE, Bridgewater, Bernstein.I examine companies at length, skip headlines, and analyze what truly matters. My goal is to be a part of your research process, offer your insights, and project what the future holds.I'm also the author of "Under the Hood": https://underhood.substack.com/. Analyst's Disclosure: I/we have a beneficial long position in the shares of DLTR either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opin ...

Core Viewpoint - Dollar Tree, Inc. has seen a significant decline in its stock performance, losing nearly half of its value and facing challenges from product cost inflation, unfavorable sales mix, and elevated shrink [1][2][10] Financial Performance - The company's stock price has dropped to $75.67, reflecting a 49.9% decrease from its 52-week high of $151.22 [1] - Over the past three months, Dollar Tree shares have decreased by 29.7%, while the broader industry and S&P 500 have seen growth of 2.4% and 2.7%, respectively [1] - Analysts have revised the Zacks Consensus Estimate for fiscal 2024 down by 17.8% to $5.45 per share and for fiscal 2025 down by 20.3% to $6.21 per share, indicating a year-over-year earnings decline of 7.47% for fiscal 2024 [4] Segment Performance - The Family Dollar segment has been experiencing soft spending trends among low-income consumers, leading to a 0.1% dip in comparable store sales in the second quarter of fiscal 2024 [5][6] - The average ticket size decreased by 0.8%, and discretionary comps dropped by 1.7%, with lower SNAP benefits contributing a 60-basis point headwind [6] Macroeconomic Factors - Macroeconomic pressures, including inflation and high interest rates, have negatively impacted customer sentiment and discretionary demand [8] - Management has adopted a cautious approach, estimating low-single-digit comps growth for the remainder of fiscal 2024 [8] Cost Structure - Dollar Tree has faced rising selling, general and administrative (SG&A) expenses due to increased operating costs, including general liability claims and elevated utility costs [9] - The company has revised its fiscal 2024 outlook to reflect these challenges, including a general liability charge and a conservative sales forecast [7][10]

Sometimes less is more: a statement couldn't feel more true for Dollar Tree right now. Right now, Dollar Tree (DLTR 3.17%) shares are trading so low it feels like going to the $0.99 store and buying them off the shelf wouldn't be out of the question. In all seriousness, its stock trades for much more than a dollar, but Dollar Tree has had a horrendous 2024. Shares are down 50% year-to-date, now trading in the low $70 per share range and 52% below their 52-week high. With the company saying it is currently " ...

The REIT's third-largest tenant faces tough macro and competitive headwinds. Realty Income (O 0.48%) is a popular dividend stock for income investors. It's one of the largest real estate investment trusts (REITs), with 15,540 properties worldwide and more than 1,500 different clients across 90 industries. Since its initial public offering (IPO) in 1994, it's kept its occupancy rate above 96%. It's also more balanced than many retail REITs because it primarily serves recession-resistant businesses, like disc ...

Have investors overreacted to a bad quarter? The U.S. economy isn't in a recession yet, but there is no shortage of consumers who are struggling right now. Multiple years of price increases and higher housing costs are wearing down low-income consumers who shop at dollar stores. While you might assume a stock like Dollar Tree (DLTR 1.82%) should be fairly resilient in times like these, even it's having trouble generating much growth. The dollar store chain's recent earnings numbers weren't impressive, and t ...

Core Viewpoint - Dollar Tree's stock has experienced a significant decline of approximately 55% from $142 to $69, contrasting with a 16% increase in the S&P index during the same period [1][2]. Financial Performance - The company reported weaker-than-expected second-quarter results, with revenues growing only 0.7% year-over-year to $7.38 billion [4]. - Same-store sales for the Dollar Tree segment increased by 1.3%, while Family Dollar's same-store sales decreased by 0.1% [4]. - Non-GAAP earnings per share fell by 26% year-over-year to $0.67 in Q2 [4]. Cost Structure - Dollar Tree achieved an 80-basis-point increase in gross margin to 30% due to lower freight costs [5]. - However, selling, general, and administrative expenses rose from 25.3% to 27.3%, influenced by additional legal expenses related to customer accidents [5]. Future Guidance - For Q3, Dollar Tree anticipates sales between $7.4 billion and $7.6 billion, with adjusted earnings per share projected between $1.05 and $1.15 [6]. - For the full fiscal year 2024, the revenue forecast has been revised to a range of $30.6 billion to $30.9 billion, down from the previous estimate of $31 billion to $32 billion [6]. - Adjusted earnings per share for the full year are now expected to be between $5.20 and $5.60, a significant reduction from the earlier guidance of $6.50 to $7 [6].

The discount retailer still hasn't solved the problems that started nine years ago. Dollar Tree's (DLTR 1.38%) stock sank to its lowest levels in nearly nine years after it posted its latest earnings report on Sept. 4. For the second quarter of fiscal 2024, which ended on Aug. 3, the discount retailer's net sales grew only 0.7% year over year to $7.37 billion and missed analysts' estimates by $100 million. Its adjusted EPS dropped 26% to $0.67 and broadly missed the consensus forecast by $0.37. Those headli ...

Core Viewpoint - Dollar Tree is facing significant challenges in the current macroeconomic environment, leading to disappointing earnings and lowered guidance, similar to its competitor Dollar General [2][9]. Financial Performance - For fiscal Q2 ending August 3, Dollar Tree reported a revenue increase of 0.7% year-over-year to $7.4 billion, which was below the analyst consensus of $7.5 billion [3]. - Same-store sales rose by 0.7%, with the Dollar Tree segment up 1.3% and Family Dollar down 0.1% [3]. - The company’s gross margin improved by 80 basis points to 30%, aided by lower freight costs [4]. Earnings and Guidance - Adjusted earnings per share came in at $0.67, significantly below the guidance of $1 to $1.10, impacted by increased liability claims and lower-than-expected sales [5]. - Full-year revenue guidance was lowered from $31.0 billion to $32.0 billion to a new range of $30.6 billion to $30.9 billion, with adjusted earnings per share revised down to $5.20 to $5.60 from $6.50 to $7.00 [7]. Customer Demographics and Market Position - The macroeconomic pressures are affecting not only low-income customers but also middle- and higher-income customers, which was unexpected for Dollar Tree [7]. - Over 40% of Family Dollar customers are eligible for government assistance, making this segment particularly vulnerable [8]. Strategic Initiatives - Dollar Tree is implementing a new multi-price format, which has shown early success with a 6.7% increase in consumables comparable-store sales and a 2.6% improvement in discretionary comps [11]. - The company is modernizing its IT systems and supply chain to enhance gross margins and is exploring strategic alternatives for the Family Dollar chain [13]. Valuation - Dollar Tree's stock is currently trading at a forward price-to-earnings (P/E) ratio of approximately 9.5, marking one of the lowest valuations in the last decade [14].

jetcityimage/iStock Editorial via Getty Images Dollar Tree (NASDAQ:DLTR) and other discount retailers have been taking a massive hit lately. Dollar Tree has been the latest victim, falling around 25% after posting a bad earnings report and weakening guidance. But before jumping on the bandwagon of bad news, let's take an objective look at this company and try to understand if it's really in long-term trouble and what its real value is. Fundamentals Based On Facts Dollar Tree is currently trading around $63. ...

The discount retailer turned in a disappointing earnings report. Shares of Dollar Tree (DLTR 7.72%) were getting hammered this week as the discount retailer posted disappointing results in its second-quarter earnings report. It followed in the footsteps of Dollar General, its larger rival, which also badly missed the mark in its earnings report, a sign that low-income consumers are cutting back on spending. As a result, Dollar Tree stock was trading down 19.8% for the week on the news as of 3:08 p.m. ET on ...