Discount treasure-hunt retailer Dollar Tree (NASDAQ: DLTR) will be reporting results this Wednesday before market hours. Here’s what investors should know.
Dollar Tree beat analysts’ revenue expectations by 2% last quarter, reporting revenues of $4.57 billion, up 12.3% year on year. It was a very strong quarter for the company, with a beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
Is Dollar Tree a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.
This quarter, analysts are expecting Dollar Tree’s revenue to decline 38% year on year to $4.69 billion, a reversal from the 3.5% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $1.08 per share.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Dollar Tree has a history of exceeding Wall Street’s expectations, beating revenue estimates every single time since going public by 2.2% on average.
Looking at Dollar Tree’s peers in the non-discretionary retail segment, some have already reported their Q3 results, giving us a hint as to what we can expect. Walmart delivered year-on-year revenue growth of 5.8%, beating analysts’ expectations by 1.1%, and BJ's reported revenues up 4.9%, in line with consensus estimates. Walmart traded up 4.6% following the results while BJ's was down 2.9%.
Read our full analysis of Walmart’s results here and BJ’s results here.
There has been positive sentiment among investors in the non-discretionary retail segment, with share prices up 5.2% on average over the last month. Dollar Tree is up 8.3% during the same time and is heading into earnings with an average analyst price target of $107.13 (compared to the current share price of $109.50).
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