Valued at a market cap of $15.1 billion, Dollar Tree, Inc. (DLTR) operates discount variety stores under the Dollar Tree and Family Dollar brands. The Chesapeake, Virginia-based company offers a wide range of affordable merchandise, including consumables, household items, seasonal goods, and apparel, with Dollar Tree stores featuring a fixed price of $1.25.
Companies valued at $10 billion or more are generally classified as “large-cap” stocks, and Dollar Tree fits this criterion perfectly. Supported by a nationwide logistics network and distribution centers, it serves major metropolitan areas, mid-sized cities, and small towns across the United States and Canada. Additionally, Dollar Tree's e-commerce platform, DollarTree.com, sells merchandise in bulk and promotes in-store events and seasonal promotions.
However, the discount retailer pulled back 54.1% from its 52-week high of $151.21, recorded in March. Shares of Dollar Tree have declined 5.5% over the past three months, lagging behind the Consumer Staples Select Sector SPDR Fund’s (XLP) 2.4% decrease over the same time frame.
In the long term, DLTR stock is down 51.1% on a YTD basis, significantly underperforming XLP’s 13% rise. Moreover, shares of Dollar Tree have dipped 46.9% over the past 52 weeks, compared to XLP’s 14.3% return over the same time frame.
DLTR stock has been trading below its 50-day and 200-day moving averages since early March. However, the stock has climbed above its 50-day moving average since late November.
Shares of Dollar Tree rose 1.9% on Dec. 4 due to its robust Q3 fiscal 2024 performance, which exceeded expectations. The company reported adjusted EPS of $1.12 and adjusted revenue of $7.6 billion, both surpassing the consensus estimates. Strong enterprise same-store sales growth of 1.8%, driven by increased traffic and ticket size across Dollar Tree and Family Dollar banners, further boosted investor confidence. Additionally, Dollar Tree raised its fiscal 2024 net sales guidance to $30.7 billion - $30.9 billion, boosting investor confidence.
Nevertheless, rival PriceSmart, Inc. (PSMT) is outperforming DLTR. Shares of PriceSmart have gained 26.4% over the past 52 weeks and 23.8% on a YTD basis.
Despite DLTR’s weak price action, analysts are moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 24 analysts covering the stock, and as of writing, DLTR is trading below the mean price target of $82.91.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here. More news from Barchart- 3 Dividend Stocks Yielding Around 5% To 7% To Pick Now
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