Dollar Tree (DLTR) will report first-quarter earnings on June 5. Here’s what to expect

Dollar Tree, Inc. (NASDAQ: DLTR) is scheduled to report first-quarter earnings next week with mixed results expected. The discount chain has remained largely immune to the inflation-driven decline in consumer sentiment, stocking higher-value items and attracting a broader demographic of customers.

The performance of Dollar Tree shares is not encouraging this year, as they have lost about 20% so far. The company’s stock has gone through a series of booms and busts in recent months and is currently trading at a six-month low. Analysts are bullish on DLTR, with the average price target pointing to strong upside over the next 12 months.

The retailer’s Q1 2024 earnings report will be released on Wednesday, June 5 at 6:30 a.m. ET. Experts believe that financial results have deteriorated both compared to the previous year’s quarter and the previous quarter. They expect adjusted earnings per share of $1.42 for the first quarter, compared with $1.47 per share a year earlier. Meanwhile, the company’s management expects first-quarter earnings in the range of $1.33 per share to $1.48.

selling prediction

The consensus sales forecast is $7.63 billion, up 4% from the first quarter of 2023. The company forecasts net sales for the quarter in the range of $7.6 billion to $7.9 billion, based on low and mid-range digital same-store sales growth for the enterprise. In the last two quarters, both sales and earnings did not reflect Street View.

Dollar Tree is preparing to close several underperforming stores this year, primarily Family Dollar, with plans to close more stores in the coming years as elevated inflation and job market uncertainty continue to impact the finances of price-conscious customers. Another reason for this decision is the increasing number of shopliftings. Continuing a low price strategy despite higher costs causes the company to feel pressure on margins and may be forced to change its product mix go ahead.

Commenting on the streamlined store network, Dollar Tree CEO Rick Dreiling said on its most recent earnings call: “As part of our portfolio review process, we have identified approximately 600 Family Dollar stores that we will close during the first half of fiscal 2024. In addition, approximately 370 additional Family Dollar and 30 Dollar Tree stores will close after the end of each store’s current operating period. rental period. We believe that rationalizing these underperforming locations will help unlock significant value at the enterprise level. In total, we estimate that the net sales loss at the stores we intend to close this year will be approximately $730 million on an annualized basis.”

Positive result

In the final three months of fiscal 2023, the company’s net sales increased 11.9% year-over-year to $8.63 billion. Corporate same-store net sales increased 3%. This resulted in a 25% increase in adjusted earnings to $2.55 per share. On an adjusted basis, the company reported a net loss of $1.71 billion, or $7.85 per share, for the fourth quarter, compared with a net income of $452.2 million, or $2.04 per share, a year earlier.

Shares of Dollar Tree posted modest gains Thursday afternoon after rising early in the session. The stock has been trading below its 52-week average in recent weeks.