Go Long Dollar Tree - A Stable Retailer Potentially Undervalued By 70%
Luis V. Sanchez • 18 Comments
Luis V. Sanchez • 18 Comments
Thu, May 26, 2:30 PM
- Discounters are rallying in full force after Dollar General (DG +4.6%) and Dollar Tree (DLTR +12.5%) both posted Q1 profit ahead of expectations.
- Steady consumer demand, tight expense control, and an easing of promotional pressure underpinned both reports.
- Retail Dive may have arrived at the heart of the matter, by noting that dollar stores attract different shoppers than the retailers which have been ravaged by Amazon's growth.
- "We are part of what I consider, in this economic environment, the most attractive sector in retail," said Dollar Tree CEO Bob Sasser.
- Investors seem to agree. Ollie's Bargain Outlet Holdings (OLLI +7.6%), Burlington Stores (BURL +7.8%), Big Lots (BIG +2.7%), Five Below (FIVE +2.9%), Ross Stores (ROST +0.9%), TJX Companies (TJX +1%), Tuesday Morning (TUES +1.9%), and Fred's (FRED +6.2%) are all pushing higher.
Thu, May 26, 12:45 PM
Thu, May 26, 9:18 AM| Thu, May 26, 9:18 AM | 1 Comment
Thu, May 26, 8:06 AM
- Dollar Tree (NASDAQ:DLTR) reports same-store sales rose 2.3% in Q1 due to increases in customer transactions and average ticket.
- Gross profit rate slipped 380 bps to 30.6%.
- SG&A expense rate improved 90 bps to 22.3% due to lower payroll, operating and corporate expenses.
- Operating margin rate squeezed 300 bps to 8.2%.
- Store count +8,543 Y/Y to 13997 (includes 7,948 Family Dollar stores).
- Retail selling square footage +132.2% to 109.6M.
- Q2 Guidance: Net sales: $5.03B to $5.12B; Same-store sales: low single-digit increase; Diluted EPS: $0.66 to $0.72; Selling square footage: +2.4% Y/Y.
- FY2016 Guidance: Net sales: $20.79B to $21.08B; Same-store sales: low single-digit growth; Diluted EPS: $3.58 to $3.80; Selling square footage: +4% Y/Y.
- DLTR +6.56% premarket.
Wed, May 18, 10:08 AM
- Retail stocks are lower than broad market averages after Target (TGT -9.3%) sets a gloomy tone on U.S. consumer spending. There was a sense of bewilderment from Target in its release and earnings call commentary over the slowdown in sales post-Easter.
- Wal-Mart is down an even 3% to reach a multi-month low ahead of tomorrow's earnings report.
- Shares of Best Buy (NYSE:BBY) are 3.2% lower after the soft read from Target tilts sentiment. The electronics chain reports earnings on May 24 with analysts expecting revenue of $8.291B and EPS of $0.35 to be disclosed.
- Other chain store stocks reeling after the Target release are Conn's (CONN -0.1%), hhgregg (HGG -2.4%), Sears Holdings (SHLD -3.1%), GameStop (GME -1.6%), Bon-Ton Stores (BONT -2.3%), Dollar Tree (DLTR -2.1%), Big Lots (BIG -2.4%), Dollar General (DG -1.5%), Citi Trends (CTRN -7.4%), and PriceSmart (PSMT -2.9%).
- Previously: Investors edgy over retail stocks after Target disappoints (May 18)
- Previously: Target stung by low traffic trend (May 18)
Thu, Mar. 10, 10:27 AM
- Party City (PRTY +19.5%) and Dollar General (DG +7.2%) are both flying after Q4 earnings shine.
- Both retailers improved profit and operating margins off sales mix and a dialing down of promotions.
- The strong reads from the retailers is giving a lift to Fred's (FRED +2.5%), Dollar Tree (DLTR +3.5%), Big Lots (BIG +1.6%), and Five Below (FIVE +2.2%).
- Previously: Dollar General +3.8% post Q4 results (Mar. 10 2016)
- Previously: Party City beats by $0.01, misses on revenue (Mar. 10 2016)
Tue, Mar. 1, 8:05 AM
- Dollar Tree (NASDAQ:DLTR) reports same-store sales increased 1.7% in FQ4 for the Dollar Tree segment.
- Gross profit rate fell 630 bps to 30.8% due to the addition of lower-margin Family Dollar products to the mix..
- SG&A expense rate +40 bps to 22.0%.
- Store count +8,484 Y/Y to 13,851. At the end of the quarter, the company had 5,954 Dollar Tree stores and 7,897 Family Dollar stores in operation.
- The company sees FQ1 sales of $5.05B-$5.12B vs. $5.10 consensus and EPS of $0.75-$0.83 vs. $0.80 consensus.
- Previously: Dollar Tree misses by $0.06, misses on revenue (Mar. 01 2016)
- DLTR -5.53% premarket to $75.81.
Tue, Mar. 1, 7:33 AM
Tue, Feb. 16, 7:23 AM
Nov. 24, 2015, 7:49 AM
- Dollar Tree (NASDAQ:DLTR) reports same-store sales increased 2.1% in Q3.
- Gross profit rate plummeted 630 bps to 28.3% as a higher mix of lower-margin Family Dollar products pulled down the rate.
- SG&A expense rate -30 bps to 28.3%.
- Store count +8,756 Y/Y to 14,038. At the end of the quarter, the company had 5,841 Dollar Tree stores and 8,197 Family Dollar stores opened.
- Guidance: Dollar Tree expects full year revenue of $15.45B to $15.55B vs. $15.46B consensus. Q4 revenue of $5.32B to $5.42B is forecast.
- Previously: Dollar Tree misses by $0.15, beats on revenue (Nov. 24 2015)
- DLTR +0.50% premarket to $69.90.
Nov. 11, 2015, 1:52 PM
- Discounters are part of the broad sell-off in retail chain stocks.
- Five Below (FIVE -6.9%), Dollar Tree (DLTR -2.5%), and Dollar General (DG -3.8%) are all lower on the day. The three stocks all trail the return of the S&P 500 by a wide margin on the year.
- Concerns over the impact of high inventory levels on promotional activity have picked up this week.
- Previously: Retailers eye inventory levels with Black Friday 17 days away (Nov. 10)
Oct. 14, 2015, 11:30 AM
- Wal-Mart's profit warning today is having a major impact in the retail sector.
- The company's commitment to raise wages is expected to pressure other companies to follow suit.
- Discounters in particular are feeling the Bentonville pinch.
- Decliners: Ollie's Bargain Outlet Holdings (NASDAQ:OLLI) -5.0%, Dollar Tree (NASDAQ:DLTR) -3.4%, Dollar General (NYSE:DG) -3.0%, PriceSmart (NASDAQ:PSMT) -2.1%, Big Lots (NYSE:BIG) -1.5%, Fred's (NASDAQ:FRED) -1.3%, Burlington Stores (NYSE:BURL) -1.1%.
- Previously: Retail giants lower after Wal-Mart warns (Oct. 14 2015)
- Previously: Wal-Mart sits at multi-year low after guidance stuns (Oct. 14 2015)
Sep. 10, 2015, 8:03 AM
- Credit Suisse downgrades Dollar Tree (NASDAQ:DLTR) to an Underperform rating.
- "We remain cautious on DLTR's acquisition of FDO given concerns about execution risk, management's ability to turn around this perennially poor performing asset, and its overall strategic fit," reads the gloomy CS note.
- The investment firm lowers its price target on the dollar store chain to $60.
- DLTR -0.79% premarket to $67.40 vs. a 52-week trading range of $53.70 to $84.22.
Sep. 4, 2015, 7:06 AM
- Bank of America Merrill Lynch upgrades Dollar Tree (NASDAQ:DLTR) to a Buy rating from Neutral on a valuation call.
- Shares of Dollar Tree are down over 10% this week after Q2 earnings disappointed investors.
- Previously: Dollar Tree misses by $0.01, misses on revenue (Sep. 01 2015)
- Previously: More on Dollar Tree's Q2 (Sep. 01 2015)
- DLTR +0.43% premarket to $67.29.
Sep. 1, 2015, 9:13 AM
Sep. 1, 2015, 8:06 AM
- Dollar Tree (NASDAQ:DLTR) reports same-store sales rose 2.7% in Q2.
- Gross profit rate fell 580 bps to 28.4% due to markdown expenses related to acquisition of Family Dollar stores.
- SG&A expense rate remained flat Y/Y at 23.7%.
- Store count +8,698 Y/Y to 13,864, during the quarter the company acquired 8,284 Family Dollar stores.
- Retail selling square footage +63.4% to 108.2M.
- Q3 Guidance: Net sales: $4.78B to $4.87B; Same-store sales: low single-digit increase.
- FY2015 Guidance: Net sales: $15.3B to $15.52B; Same-store sales: low single-digit growth.
- DLTR -6.15% premarket.
Dollar Tree, Inc. owns and operates discount variety stores offering merchandise at the fixed prices. It operates stores under the names Dollar Tree, Deal$, Dollar Tree Deal$, Dollar Giant and Dollar Bills. The company offers a wide selection of everyday basic products and its supplement these... More
Industry: Discount, Variety Stores
Country: United States
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