Dollar Tree, Inc. ($DLTR) Earnings (Q1 FY22)

 Dollar Tree, Inc. ($DLTR) Earnings and Opinion:


Dollar Tree, Inc. is a company in the Consumer Defensive sector and operates in the Discount Stores industry. They currently operate through two segments (Dollar Tree and Family Dollar). The Dollar Tree segment sells merchandise at a fixed cost of $1.00 and operates 7,805 stores. The Family Dollar segment operates as more of a traditional retail shop with a wider variety of merchandise. Family Dollar currently has 7,880 stores and 11 distribution centers. The overall company was found in 1986 and is currently headquartered in Chesapeake, Virginia. The stock started trading publicly in 1995. 

Dollar Tree EPS and Revenue (Q1 FY23):

  • EPS of $2.37 beating expectations of $1.98
  • Revenue of $6.90B beating expectations of $6.77B
Dollar Tree Q1 Highlights:
  • EPS increased 48.1% and was a record for the quarter
  • Net sales increased by 6.5%
  • Enterprise same store sales up 4.4%
  • Dollar Tree same store sales up 11.2%
  • Family Dollar same store sales down 2.8%
Opinion:
Dollar Tree is currently soaring today after reporting earnings before the market opened this morning. The company posted some solid beats on expectations in the EPS and revenue metrics. They were able to reach a record for diluted EPS and increase it 48.1% on a year-to-year basis. Dollar Tree was also able to increase their net sales by 6.5% over the past year. They saw increases in same store sales in the Enterprise and Dollar Tree categories, but saw declines in the Family Dollar category. The company saw net income increase by 43.2% and operating income increase by 40.7%. They provided some upbeat guidance on the rest of the fiscal year, expecting to bring in record numbers. These are all very intriguing given the fact that the company is performing so well during inflationary times. Usually we don't see companies breaking records in EPS when economic challenges are upon this. However, you have to give credit to the executives for getting things right and persevering through these challenging times. Hopefully these companies earnings dictate a little bit, and lead us to believe that many retail stores can overcome supply chain issues and start operating normally again. The stock has seen some positive performance in the short-term. Most of it probably has to do with the stock is soaring this morning causing all the losses to be subsided.The current P/E ratio has it at 26.71 and the P/S is 1.35. Now the stock isn't too expensive yet, but it sure seems like it is getting there. The ROE and ROA are a little bit lower compared to competitors, however they have a solid current ratio. If we set this company up aside Dollar General, you would have to go with Dollar General. There's just more success with them and honestly in my opinion. a better business model. Dollar Tree isn't so bad of an option though and can still be in consideration. I just think I see more upside with Dollar General and just overall better metrics and valuation.


*Information from Dollar Tree, Yahoo Finance, Google, and CMLVIZ

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