When Dollar Tree, Inc. (DLTR) releases its second-quarter fiscal 2024 findings on September 4, it is expected to see a top-line increase. The $8.5 billion Consensus Estimate for earnings is a 2.5% increase over the same quarter last year.
Dollar Tree Quarterly Earnings Forecast
It is anticipated that the retailers of cheap variety stores will see an increase in profits yearly. The fiscal second-quarter profits consensus forecast is $1.03 per share, representing a 13.2% increase over the same period last year. The consensus figure has decreased by one penny over the last seven days.
The second-quarter fiscal 2024 findings from Dollar Tree are anticipated to demonstrate ongoing pressures from the lackluster demand for luxury products due to declining low-income consumer expenditure trends. Owing to these patterns, management anticipated that in the initial half of fiscal 2024, high shrink and an adverse mix would continue to be obstacles. The corporation has also been dealing with challenges brought on by rising product costs. In the second half of the fiscal year, these elements are anticipated to have negatively impacted both the top and bottom lines.
Dollar Tree Management Projection
Based on the most recent quarter's results, management predicted that net revenue for the Family Dollar sector would decrease by 1% to 3% for the remainder of the fiscal second quarter. Furthermore, DLTR projects a modest to lower-single-digit comps increase for the enterprise, translating into aggregated net revenue of $7.3–$7.6 billion. Comps are predicted to be almost steady for the Family Dollar label while increasing by 2-4% in the Dollar Tree banner.
Due to increased operating costs, such as workers' investments for assisting multi-price deployments, greater amortization of assets expenses, and costs associated with severance and staffing retention of the closure of stores for the Family Dollar category, Dollar Tree has also experienced greater SG&A expenses over the last few quarters.
DLTR Stock Bearish Factor
During the most recent quarter's revenue call, management mentioned that higher SG&A costs are anticipated in the upcoming quarters due to increased transportation and additional costs brought on by the recent tornado that destroyed a distribution center in Marietta, Oklahoma. As of May 4, 2024, the corporation had lost $117 million due to the problem, including $70 million for destroyed goods and $47 million for assets and machinery. Higher SG&A costs in the to-be-reported period were probably caused by the charges associated with the distribution center disaster.
The business projects $1 to $1.10 in adjusted profits per share, including additional transportation costs of around 10 cents and other expenses associated with closing the Marietta distribution facility.
Dollar Tree Stock Bullish Factor
Consistent store openings and distribution facility improvements are anticipated to have contributed to DLTR's ongoing success in its reformation and expansion goals, which will probably have somewhat buffered revenues. Numerous initiatives, including multi-price level tactics, reorganization and growth plans, and attempts to optimize its shop portfolio with vacancies, renovations, banning, and closings, have benefited the company. Gains in market share and constant growth in sales across a range of categories have resulted from these initiatives.
The same-day shipping services, combined with Instacart and DLTR's electronic and omnichannel abilities, are anticipated to influence traffic patterns in the second quarter of the company's fiscal year.
Dollar Tree Key Financial Metrics
Given that Dollar Tree shares are now trading below both historical and industry medians, they represent a compelling valuation opportunity. The company's shares present an appealing opportunity to investors looking to gain exposure to the retail-discount store business, as they have a future 12-month price-to-revenue valuation of 11.87X, which is lower than the marketplace average of 30.9X and the five-year average of 18.17X.
According to recent market moves, in contrast to the industry's 20.6% growth, Dollar Tree's stocks have lost 40.5% of their value year to date.
DLTR Stock Technical Analysis
In the daily price of DLTR stock price, an ongoing bearish momentum is visible where the current price is trading at the record low. In that case, investors should find a valid bottom formation from where a potential bullish reversal candlestick formation could open a long signal.
In the volume structure, the most significant level since July 2024 is at 107.58 level, which is above the near-term swing high of 103.00 level. In that case, a minor upward correction is pending as a mean reversion.
Based on this outlook, an extended downside correction might find support at the 73.19 level, which is the 161.8% Fibonacci Extension level from the existing swing. However, a valid bullish recovery above the 50 day EMA could be the primary sign of a bullish reversal, which might need to move above the 200 day SMA line before signaling a trend change.
