Latest news with #DollarTree
Globe and Mail
6 hours ago
- Business
- Globe and Mail
Dollar Tree Stock Is Soaring. Is This the Time to Buy?
Shares of Dollar Tree (NASDAQ: DLTR) are up more than 60% since mid-March and are fast approaching a 52-week high. As the company prepares to divest itself from its Family Dollar brand and embraces a new pricing model, Dollar Tree appears capable of thriving even as many retailers struggle with tariffs and economic uncertainty. There's a lot happening with Dollar Tree -- management changes, the Family Dollar mess, and its 3.0 pricing model. But all of it makes Dollar Tree a compelling stock that appears capable of producing oversized gains for investors. How is Dollar Tree threading the needle? And more importantly, is there still time for investors to join the rally? Family Dollar didn't work out Dollar Tree excels by providing low-cost household goods, food, cleaning supplies, and beauty products. Most items are priced at $1.25 (it used to be just a dollar, but the company began raising prices in late 2021 to offer a wider selection). Shares of Dollar Tree stock topped the $170 mark as recently as 2022, but began a long fall in 2024, stretching into the first quarter of 2025. Dollar Tree CEO Rick Dreiling stepped down, citing his health, and was replaced by Michael Creedon, who was formerly chief operating officer. Meanwhile, Family Dollar, which it purchased for $8.5 billion in 2015, continued to drag on the business. Dollar Tree finally shuttered several hundred Family Dollar stores in recent years, and then in 2024 announced it was exploring divesting itself of the brand. This March, Dollar Tree announced it had a buyer -- a partnership of hedge fund Brigade Capital Management and investment firm Macellum Capital Management, which are buying the stores for just over $1 billion. The deal is expected to close in this quarter. Not surprisingly, Dollar Tree stock started to recover soon after the announcement. Shares are up 61% since mid-March and 33% on a year-to-date basis. Dollar Tree stock has a long way to go from its 2022 ceiling, but it's only about 10% off its 52-week-high. Writing a new chapter The most interesting thing about Dollar Tree is its willingness to walk away from what made it famous. The company is embracing its 3.0 multi-price store format that includes wider store aisles, better signage, and a tiered price structure, where products range up to $7. Dollar Tree began switching stores over in 2024 and now has about 3,400 in the new format. Management hopes to have half of the company's stores working in the 3.0 format by the end of 2025. The format means that Dollar Tree can expand its offerings and draw in additional customers at higher price points. Same-store sales in the first quarter of fiscal 2025 (ending May 3) showed a 5.4% gain, which management attributed to higher prices and greater traffic. Gross profit increased to $1.6 billion, thanks to lower freight and occupancy costs. Adjusted earnings per share came in at $1.26. Dollar Tree opened 148 stores during the quarter and now has more than 9,000 locations, with plans to open a total of 400 stores this year. Management reiterated its full-year revenue guidance of $18.5 billion to $19.1 billion, while raising its guidance for earnings. The company is now expecting full-year EPS of $5.15 to $5.65, up from a range of $5 to $5.50. What's ahead for Dollar Tree? Even with higher-priced items, Dollar Tree is a discount retailer, and when people feel like their pocketbooks are getting squeezed, they are much more likely to look for consumer staples in a store that specializes in low prices rather than luxury items. So that helps Dollar Tree's outlook. But there's also the continued threat of tariffs, although President Donald Trump is developing the practice of announcing huge punitive tariffs as a negotiating ploy and then immediately rolling them back. Tariffs are a threat to any discount retailer, but perhaps even more to a store that sells many of its products for $1.25. If the tariffs come roaring back, Dollar Tree will need to make some changes either in pricing, the types of goods it offers, or will have to work some price relief with its suppliers. So is Dollar Tree a buy? Dollar Tree today is a pretty cheap stock -- the price-to-earnings ratio of 19.7 and the forward P/E of 18.3 are both attractive, as is its low price-to-sales ratio of 1.2 times. Now that the company is ridding itself of the Family Dollar fiasco and appealing to more consumers with its 3.0 multi-price format, Dollar Tree stock appears capable of setting a new 52-week high this summer. It's too early to say if it gets back to its 2022 heyday, but Dollar Tree is certainly on the right track. Should you invest $1,000 in Dollar Tree right now? Before you buy stock in Dollar Tree, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Dollar Tree wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $713,547!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $966,931!* Now, it's worth noting Stock Advisor 's total average return is1,062% — a market-crushing outperformance compared to177%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 23, 2025
Yahoo
2 days ago
- Business
- Yahoo
Dollar Tree Stock Sell-Off: Should You Buy the Dip?
Dollar Tree is beginning a new chapter amid its upcoming sale of Family Dollar. Its stock has risen since announcing the sale. A compelling forward P/E ratio may induce new investors. 10 stocks we like better than Dollar Tree › Market conditions have presented challenges for Dollar Tree (NASDAQ: DLTR) over the past few years. Contentious trade relations with China and supply chain challenges have left the company struggling to fill its shelves, while rising inflation has pressured many of its cash-strapped consumers. Amid such headwinds, the retail stock is down more than 40% since reaching a high in 2022. Still, the company has come to terms with its failed Family Dollar acquisition, spinning off the chain. Now, with its capital free and a modified business strategy, it's worth asking whether investors should buy the stock on the dip, or if this is one they should still avoid. Dollar Tree is an ultra-discounter that sells crafts, cleaning supplies, party supplies, and other items, giving shoppers what it calls a "thrill of the hunt" experience. Most of its products sell at a $1.25 price point, though it has recently introduced price tiers as high as $7, as inflation reduces the number of items that can be sold profitably at lower prices. The company is also about to begin a new chapter as it prepares to sell Family Dollar to two private equity firms for around $1 billion. In 2015, Dollar Tree outbid Dollar General for Family Dollar, paying just over $9 billion. However, Family Dollar differed from its new parent in that it focused more heavily on essentials, making it a different type of retail business. After years of failing to fully integrate the chain into its operations, Dollar Tree finally agreed to a sale in March. In the 10 years it owned Family Dollar, the stock rose by less than 30% as this misstep was a drag on its financials. Despite having to sell Family Dollar at an $8 billion loss, the move is likely positive for Dollar Tree. Now, it can focus single-mindedly on the business it knows best. It can also better address the rising threat of e-commerce and find ways to mitigate tariffs on goods from places like China and Mexico, where many of its goods are produced. As of this writing, the Family Dollar disposition is not yet complete. However, Dollar Tree released financials with Family Dollar reflected as discontinued operations. Thus, the financial data reflects only the Dollar Tree segment, making it easier for investors to evaluate the enterprise as it is going to look. They may like what they see. In the first quarter of 2025, net sales of $4.6 billion rose 11%. Same-store sales increased by 5.4%, with foot traffic up 2.5% and customers spending 2.8% more than last year. Higher operating expenses weighed on the bottom line, but with other income rising, the company's net income of $343 million rose 14% compared with the year-ago quarter. For all of 2025, management forecasts net sales of $18.5 billion to $19.1 billion, representing a 7% yearly increase at the midpoint. Moreover, the stock has been on an uptrend since announcing the Family Dollar sale. Thus, even though shares are down over the last 12 months, they have risen by almost 35% since the beginning of the year. Indeed, recent quarterly losses left Dollar Tree without a price-to-earnings ratio (P/E). But the forward P/E of 19 means that investors can still add shares without overpaying. With the company now focused on what it does best, that valuation may make the stock more attractive to new buyers. Under current conditions, Dollar Tree is in a strong position to deliver market-beating returns. Indeed, the Family Dollar acquisition seemed to limit the growth of the ultra-discounter and its stock price. Also, the fact that Dollar Tree is down by around 40% from its all-time high despite recent gains highlights the depth of the pain it has suffered. Nonetheless, the growth in the latest quarter and the slightly lower net sales increases forecast for the year bode well. When also factoring in what is still a discounted forward P/E ratio, Dollar Tree could not only deliver market-beating returns but also surpass its all-time high in the coming years. Before you buy stock in Dollar Tree, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Dollar Tree wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $687,731!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $945,846!* Now, it's worth noting Stock Advisor's total average return is 818% — a market-crushing outperformance compared to 175% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 23, 2025 Will Healy has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Dollar Tree Stock Sell-Off: Should You Buy the Dip? was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
2 days ago
- Business
- Yahoo
Wells Fargo Stays Overweight on Dollar Tree, Keeps $105 Target
Wells Fargo has reaffirmed its Overweight rating on Dollar Tree (NASDAQ: DLTR), sticking with a $105 price target in early June. The stock, now at $99.05, has been volatile, with analyst targets ranging widely between $70 and $109. The firm wasn't surprised by the recent dip following Dollar Tree's Q1 results. In their view, the sell-off was expected. While the company delivered a solid quarter overall, Wells Fargo flagged near-term earnings risk. Fer Gregory/ Still, they see signs of strength. Same-store sales suggest the brand has reconnected with its core customer base. With a gross margin of 35.8% and a market cap of $18.6 billion, the company's financial footing remains strong. Tariff-related timing quirks could cause some noise in the short run, but Wells Fargo sees potential for a meaningful earnings lift by 2026. For now, they're holding their ground on the stock's long-term risk/reward profile. While we acknowledge the potential of DLTR as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money. Disclosure: None.
Yahoo
3 days ago
- Business
- Yahoo
Dollar General analyst reworks stock price target after strong recovery
Dollar General analyst reworks stock price target after strong recovery originally appeared on TheStreet. If you're anywhere near Weedsport, N.Y., this weekend, you might want to stop by 8881 South Seneca Street. That's where Dollar General () is holding a grand opening on June 28 for its relocated store. The Cayuga County village, half an hour west of Syracuse, is the birthplace of the silent-film actor Justus D. Barnes, who played a major role in "The Great Train Robbery." 💵💰Don't miss the move: Subscribe to TheStreet's free daily newsletter 💰 The first 50 adult customers will receive $10 gift cards, and the first 100 shoppers will get Dollar General tote bags. 'We are excited to reopen our relocated store in Weedsport and celebrate with the local community,' Matthew Simonsen, the chain's senior vice president of real estate and store development, said in a and dollar stores are seeing renewed growth in 2025, outperforming other nondiscretionary retail sectors, as economic uncertainty drives consumers to prioritize value, according to Dollar Tree () and Five Below () were outperforming the category based on year-over-year growth, while Dollar General was leading in visitor loyalty. Dollar General and Dollar Tree have seen an increase in loyal visitors, defined as people who visit three or more times a month, compared with last year, said. Dollar General's level of loyal visitors, 36% shopping three times per month, is considered very high. "Dollar chains are primed to be an asset to consumers as economic and financial uncertainty continues, but consumers may also continue to be more discerning overall," the analytics platform said. These stores "must continue to innovate and expand assortments, particularly in grocery, to stay competitive as warehouse clubs and superstores also vie for attention."While consumer sentiment improved in June — the first increase in six months — it remains historically low and significantly below the level of a year ago, according to the University of Michigan's survey. 'Consumers' fears about the potential impact of tariffs on future inflation have softened somewhat in June,' said Joanne Hsu, the survey's director. "Still, inflation expectations remain above readings seen throughout the second half of 2024, reflecting widespread beliefs that trade policy may still contribute to an increase in inflation in the year ahead." Dollar General shares have had a good 2025, surging 46%. The shares are down about 16% from this time in 2024. Earlier this month, the Goodlettsville, Tenn., company beat Wall Street's fiscal-first-quarter expectations for earnings and revenue. "We believe our efforts are resonating with a wide range of customers as they continue to seek value in our more than 20,000 store locations around the country,' Chief Executive Todd Vasos told analysts during the company's earnings call. After the company posted its quarterly results, Evercore ISI raised its price target on Dollar General to $117 from $100, while affirming an in-line rating on the shares. Dollar General's back-to-basics approach is gaining traction with solid fiscal-Q1 sales and profit up 5% year over year, and the company is benefiting from higher ticket sales in discretionary categories and a wider gross margin, Evercore said. Risk from the Trump administration's tariff policy remain a potential 5%-8% headwind for earnings per share, but Dollar General's turnaround is showing "promising" signs, the firm Advisory analyst Joseph Feldman raised his price target on DG to $120 from $100 and kept a market-perform rating on the shares. While the company remains pleased with its May comparison and expects momentum to stay solid this year, Feldman said, he sees tariffs as a wild card. Overall, the analyst said, he remains constructive on the stock. And on June 24 Goldman Sachs downgraded DG shares to neutral from buy with a price target of $116, up from $115. The investment firm cited valuation for the downgrade after the stock recovered sharply. Goldman said the company still has room to widen margins long term, but the stock is now pricing in its better fundamentals. Goldman said that upside to the stock will get harder, given "still-intense" competition, which could hurt DG's same-store-sales, and given the company's need to invest in its stores and supply General analyst reworks stock price target after strong recovery first appeared on TheStreet on Jun 24, 2025 This story was originally reported by TheStreet on Jun 24, 2025, where it first appeared.
Yahoo
4 days ago
- Business
- Yahoo
Wells Fargo Stays Overweight on Dollar Tree, Keeps $105 Target
Wells Fargo has reaffirmed its Overweight rating on Dollar Tree (NASDAQ: DLTR), sticking with a $105 price target in early June. The stock, now at $99.05, has been volatile, with analyst targets ranging widely between $70 and $109. The firm wasn't surprised by the recent dip following Dollar Tree's Q1 results. In their view, the sell-off was expected. While the company delivered a solid quarter overall, Wells Fargo flagged near-term earnings risk. Fer Gregory/ Still, they see signs of strength. Same-store sales suggest the brand has reconnected with its core customer base. With a gross margin of 35.8% and a market cap of $18.6 billion, the company's financial footing remains strong. Tariff-related timing quirks could cause some noise in the short run, but Wells Fargo sees potential for a meaningful earnings lift by 2026. For now, they're holding their ground on the stock's long-term risk/reward profile. While we acknowledge the potential of DLTR as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money. Disclosure: None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
