Dollar Tree Stock Rises After Q3 Earnings Beat: Retail Cheers

Shares of discount retailer Dollar Tree ($DLTR) were up 1.51% on Wednesday after the company posted better-than-expected third-quarter earnings, beating Wall Street expectations and lifting retail sentiment.

The company’s earnings per share came in at $1.12, above the $1.07 that Wall Street analysts were expecting. Its revenues came in at $7.56 billion, beating the expected $7.45 billion, according to Stocktwits data.

Enterprise same-store net sales increased 1.8%, driven by a 1.6% increase in traffic and a 0.2% increase in average ticket, the company said. Family Dollar same-store sales were up 1.9%.

“Our Dollar Tree and Family Dollar merchandising efforts produced tangible results, and our third quarter sales came in at the high end of our expected range,”  Mike Creedon, interim CEO said. “As an organization, our top priorities remain accelerating the growth of the Dollar Tree segment, completing the Family Dollar strategic review process, and unlocking value for Dollar Tree shareholders.”

The company also revised up the lower end of its annual outlook, whose midpoint is above consensus analyst estimates, said a Reuters report. Its full-year fiscal 2024 sales outlook range is now $30.7 billion to $30.9 billion. While its fiscal 2024 adjusted diluted EPS outlook range is $5.31 to $5.51.

The company said its fourth-quarter sales outlook range is $8.1 billion to $8.3 billion. While adjusted diluted EPS outlook is expected between $2.10 and $2.30.

Management changes continue as the company said Dollar Tree CFO Jeff Davis will be stepping down but plans to stay through fiscal 2024.

Retail sentiment on the stock improved to ‘extremely bullish’ (79/100) from ‘bearish’ (32/100) a week ago. Message volumes rose to ‘extremely high’ zone from low.

Dollar Tree sentiment meter and message volumes on Dec 4 as of 11:00 am ET| Source: Stocktwits

A discussion poll on Stocktwits asked users to vote for how the company should handle Family Dollar, which is under a strategic review process according to the company. About 37% of the users said it should be spun off.

Many Stocktwits users were bullish but one warned about the possible impact of Trump tariffs.

In the third quarter, it opened 249 new Dollar Tree and six new Family Dollar stores.

Dollar Tree stock is down 30.22% year-to-date.

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