Can Strong Earnings Stabilize Dollar Tree’s Volatile Shares?

Dollar Tree, Inc. (DLTR) Consumer Discretionary – Multiline Retail | Reports March 1, Before Market Opens

Key Takeaways

The Estimize consensus is calling for EPS of $1.06, 3 cents higher than Wall Street, and revenue expectations of $5.430 billion, roughly $12 million greater than the Street

Dollar Tree’s acquisition of Family Dollar is expected to propel the company to one of the largest discount retailer in the U.S.

Despite extraordinary revenue growth in the past 2 years, Dollar Tree has had trouble making a profit

What are you expecting for DLTR? Get your estimate in here!

Discount retailer, Dollar Tree (DLTR), is scheduled to report fourth quarter earnings today before the market opens. The company is coming off a solid third quarter driven by better than expected sales and comp growth. Shares, on the other hand, have been on a roller coaster ride after reaching 52 week lows in November, only to rebound in the past 3 months. This quarter expectations predict sales will continue their upward trend while profitability will remain flat.

The Estimize consensus is calling for EPS of $1.06, 3 cents higher than Wall Street, and revenue expectations of $5.430 billion, roughly $12 million greater than the Street. However our Select Consensus, which more heavily weights historically accurate analysts and recent estimates, is expecting a more modest beat of 1 cents. Compared to the same period last year, this projects as an 8% decline on the bottom line while sales are looking to grow a resounding 119%. The Estimize community has been quite bearish on the company’s profitability as of late, revising EPS estimates down 8%. That said, Dollar Tree usually beats Wall Street, trumping EPS and sales estimates, 79% and 66% of quarters, respectively.

Dollar Tree’s growth strategy is progressing well with a number of new stores expected to open this year and the recent acquisition of rival Family Dollar. The combined company is primed to make Dollar Tree one of the largest discount retailers in the United States. As the two companies become fully integrated, Family Dollar will generate synergies and further propel Dollar Tree’s financial performance in the long run. Meanwhile, Dollar Tree’s emphasis on new store openings and bolstering its current stores should continue to drive revenue growth.