How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.
Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.
What if you'd invested in Dollar Tree (
DLTR Quick Quote DLTR - Free Report) ten years ago? It may not have been easy to hold on to DLTR for all that time, but if you did, how much would your investment be worth today? Dollar Tree's Business In-Depth
With that in mind, let's take a look at Dollar Tree's main business drivers.
Founded in 1986 and headquartered in Chesapeake, VA, Dollar Tree Inc. is an operator of discount variety stores offering merchandise and other assortments. Its stores successfully operate in major metropolitan areas, mid-sized cities and small towns. The company offers a wide range of quality everyday general merchandise in many categories, including housewares, seasonal goods, candy and food, toys, health and beauty care, gifts, party goods, stationery, books, personal accessories, and other consumer items. Its stores are supported by a nationwide logistics network and distribution centers.
Dollar Tree also owns an e-commerce platform – DollarTree.com – which sells its merchandise in bulk to individuals and small businesses as well as organizations. Through its online platform, the company advertises its in-store events and showcases its special and seasonal promotions for featured products. Further, it acquired Family Dollar Stores, Inc. on July 6, 2015. The company operates in two reporting business segments: Dollar Tree and Family Dollar. Dollar Tree: Being the major operator of discount variety stores, this segment offers merchandise at the fixed price point of $1.00. The segment has nearly 7,652 stores operating under the Dollar Tree and Dollar Tree Canada banners, 12 distribution centers in the United States and two in Canada. Dollar Tree stores primarily range from 8,000 - 10,000 selling square feet. Family Dollar: This segment operates general merchandise discount retail stores with competitively-priced merchandise in the neighborhood stores. It has nearly 7,827 stores, which sell merchandise at prices ranging from $1.00 to $10.00. These stores primarily range from 6,000 - 8,000 selling square feet. The segment includes store operations under the Family Dollar brand and 11 distribution centers.
As of Jan 29, 2022, the company operated 16,077 stores in 48 states and five Canada provinces.
Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in Dollar Tree a decade ago, you're probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in June 2012 would be worth $2,740.08, or a gain of 174.01%, as of June 17, 2022, and this return excludes dividends but includes price increases.
Compare this to the S&P 500's rally of 173.06% and gold's return of 9.41% over the same time frame.
Going forward, analysts are expecting more upside for DLTR.
Shares of Dollar Tree have outpaced the industry in the past year on robust earnings surprise trend, which continued in first-quarter fiscal 2022. The company reported 10th startight quarter of earnings beat in the quarter. The also top line beat estimates and improved year over year. Results benefited from the completion of the $1.25 multi-price point initiative at the Dollar Tree stores, as well as robust margins, despite the increase in freight costs and SG&A expenses. Following the robust first-quarter fiscal 2022 performance, Dollar Tree raised its guidance for fiscal 2022 and provided a decent second quarter view. However, the company witnessed soft sales and comps, along with margin declines, for the Family Dollar banner in the fiscal first quarter. Higher freight and supply-chain disruptions are likely to persist in fiscal 2022.
Shares have gained 11.51% over the past four weeks and there have been 9 higher earnings estimate revisions for fiscal 2022 compared to none lower. The consensus estimate has moved up as well.