Why Is Dollar Tree (DLTR) Up 5.4% Since Last Earnings Report?

Core Viewpoint - Dollar Tree has reported strong third-quarter fiscal 2024 results, with both earnings and sales surpassing estimates and showing year-over-year improvement [2][3]. Financial Performance - Adjusted earnings per share (EPS) increased by 15.5% year over year to $1.12, exceeding the Zacks Consensus Estimate of $1.07 [2]. - Consolidated net sales rose by 3.5% year over year to $7.56 billion, beating the Zacks Consensus Estimate of $7.45 billion [3]. - Enterprise same-store sales (comps) grew by 1.8% year over year, supported by a 1.6% increase in traffic and a 0.2% rise in the average ticket [3]. Segment Performance - Comps improved by 1.8% for the Dollar Tree banner and 1.9% for the Family Dollar banner, with traffic increases of 1.5% and 1.8% respectively [4]. - The gross profit increased by 7.6% year over year to $2.34 billion, with gross margin expanding by 120 basis points to 30.9% [5]. - Adjusted operating income rose by 13.8% year over year to $343.2 million, with the operating margin expanding by 40 basis points to 4.5% [6]. Financial Health - As of the end of the fiscal third quarter, Dollar Tree had cash and cash equivalents of $697.6 million and net merchandise inventories of $5.54 billion, which is up 0.4% year over year [7]. - The company reported net long-term debt of $2.43 billion and shareholders' equity of $7.64 billion [7]. Future Outlook - For fiscal 2024, consolidated net sales are projected to be between $30.7 billion and $30.9 billion, with comps growth expected in the low-single-digits [8]. - Management anticipates adjusted EPS for fiscal 2024 to be between $5.31 and $5.51, a narrower range than previously estimated [8]. - For the fiscal fourth quarter, consolidated net sales are projected to be between $8.1 billion and $8.3 billion, with adjusted EPS expected to be between $2.10 and $2.30 [9]. Market Position - Dollar Tree has a Zacks Rank of 3 (Hold) and an aggregate VGM Score of A, indicating strong growth potential but lagging in momentum [12][13].