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Dollar Tree (DLTR) Reveals Hiring Plans Ahead of Holiday Season
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Dollar Tree, Inc. (DLTR - Free Report) revealed plans to recruit thousands of full and part-time associates for the upcoming holiday season through a Nationwide Hiring Event on Oct 18. The company will hire sales associates, customer service representatives, stockers, assistant store managers and store managers.
Hired employees will be offered competitive pay, a comprehensive reward package and flexible schedules. Associates will also gain from DailyPay — a voluntary benefit, wherein they can receive their earnings between traditional paydays.
Moving on, the company has an education assistance program called ValuED, which provides financial support and a wide range of development opportunities for upskilling. As part of this, full-time associates will be eligible for tuition discounts, and reimbursement allowances for college degrees, GED programs and language courses.
Several other retailers have kicked off their hiring session for the holiday season through seasonal recruits that will improve customer shopping experiences. Retailers are increasingly focused on strengthening supply chains to avoid disruptions, which have been deterrents for a while.
Macy’s (M - Free Report) announced plans to recruit 38,000 associates ahead of the holiday shopping season. The new employees will be posted at Macy's, Bloomingdale's and Bluemercury, as well as its supply-chain locations and call centers.
This reflects a decline from last year when Macy’s hired 41,000 seasonal associates for the 2022 holiday season. M also noted that seasonal workers have the opportunity for seasonal workers to transition into permanent roles.
Target (TGT - Free Report) unveiled its hiring plan for the current holiday season. TGT is likely to recruit 100,000 associates for full and part-time positions from Sep 20.
Vacancies are available in all departments, including guest advocates, front-of-store attendants, fulfillment experts, general merchandising experts, food and beverage experts, and style consultants. Target’s hiring numbers remained the same as the 2022 holiday sale.
Amazon (AMZN - Free Report) announced its hiring plan for the current holiday season. AMZN is likely to recruit 250,000 associates for full and part-time, and seasonal positions in a bid to expand its next-day delivery service.
This indicates an increase from last year's holiday season’s 150,000 positions, driven by its newly added 50 fulfillment centers. However, the company noted that it would hire fewer people in stores and warehouses this year due to reduced consumer spending in 2023.
Coming back to DLTR, the company has been optimizing its store portfolio through store openings, renovations, re-banners and closings. Its Key Real Estate Initiatives, which include the expansion of its $3 and $5 plus assortment in Dollar Tree stores, as well as Combo Stores, bode well.
The company has been aggressively expanding its $3, $4 and $5 frozen and refrigerated products across the Dollar Tree store base. It continues to expect to have at least 5,000 Dollar Tree Plus! Stores by the end of 2024. Its growth optimization and productivity improvement projects will include 650 new stores, an estimated 1,000 store renovations, numerous distribution center projects and technology projects to enhance its efficiencies and support growth.
Dollar Tree has been gaining from growth across both segments, higher traffic and robust market share gains. This led to year-over-year sales growth of 8.2% to $7,325 million in second-quarter fiscal 2023. Enterprise same-store sales (comps) improved 6.9% year over year.
Consequently, this Zacks Rank #3 (Hold) raised its fiscal 2023 top-line view. For fiscal 2023, Dollar Tree expects consolidated net sales of $30.6-$30.9 billion, up from the prior mentioned $30-$30.5 billion. We estimate sales to be $30.1 billion. The company anticipates mid-single-digit comps growth compared with the earlier mentioned low to mid-single-digit growth and our estimate of 4.4% growth.
Comps are likely to grow in the mid-single digits in the Dollar Tree and Family Dollar segments. Previously, it expected low to mid-single-digit growth at Dollar Tree and a mid-single-digit increase in the Family Dollar segment.
For third-quarter fiscal 2023, the company expects consolidated net sales of $7.3-$7.5 billion based on mid-single-digit comps growth for the enterprise. We estimate net sales of $7.3 million and comps growth of 3.7%. Comp sales are also expected to improve in the mid-single digits at Dollar Tree and Family Dollar.
However, Dollar Tree is reeling under inflationary costs, and witnessed a lower initial mark-on, an unfavorable sales mix and shrink, and wage investments in distribution center payroll, which affected margins. The metric contracted 220 basis points (bps) to 29.2%. We had estimated a 140-bps contraction in the gross margin. The gross margin contracted 400 bps to 33.4% at the Dollar Tree banner and 30 bps to 24.4% at the Family Dollar segment. Also, the operating margin declined 360 bps to 3.9% compared with our estimate of a 350-bps contraction.
The company has been witnessing higher SG&A expenses, owing to elevated payroll, increased repair and maintenance expenses, and store facility costs. In second-quarter fiscal 2023, Dollar Tree’s SG&A expenses, as a percentage of sales, increased 130 bps to 25.3% compared with our estimate of 200 bps expansion.
Going ahead, the company expects a challenging macro environment to continue hurting its sales mix in both segments. Also, margin pressure is expected to persist through the back half of the year.
For fiscal 2023, management expects earnings per share (EPS) of $5.78-$6.08 (including a 12-cent contribution from the 53rd week and a 12-cent charge for the legal reserve) compared with the prior mentioned $5.73-$6.13 for fiscal 2023. The view is in sync with our estimate of $5.92. For third-quarter fiscal 2023, EPS is estimated to be 94 cents to $1.04 compared with our estimate of $1.18.
Image: Bigstock
Dollar Tree (DLTR) Reveals Hiring Plans Ahead of Holiday Season
Dollar Tree, Inc. (DLTR - Free Report) revealed plans to recruit thousands of full and part-time associates for the upcoming holiday season through a Nationwide Hiring Event on Oct 18. The company will hire sales associates, customer service representatives, stockers, assistant store managers and store managers.
Hired employees will be offered competitive pay, a comprehensive reward package and flexible schedules. Associates will also gain from DailyPay — a voluntary benefit, wherein they can receive their earnings between traditional paydays.
Moving on, the company has an education assistance program called ValuED, which provides financial support and a wide range of development opportunities for upskilling. As part of this, full-time associates will be eligible for tuition discounts, and reimbursement allowances for college degrees, GED programs and language courses.
Several other retailers have kicked off their hiring session for the holiday season through seasonal recruits that will improve customer shopping experiences. Retailers are increasingly focused on strengthening supply chains to avoid disruptions, which have been deterrents for a while.
Macy’s (M - Free Report) announced plans to recruit 38,000 associates ahead of the holiday shopping season. The new employees will be posted at Macy's, Bloomingdale's and Bluemercury, as well as its supply-chain locations and call centers.
This reflects a decline from last year when Macy’s hired 41,000 seasonal associates for the 2022 holiday season. M also noted that seasonal workers have the opportunity for seasonal workers to transition into permanent roles.
Target (TGT - Free Report) unveiled its hiring plan for the current holiday season. TGT is likely to recruit 100,000 associates for full and part-time positions from Sep 20.
Vacancies are available in all departments, including guest advocates, front-of-store attendants, fulfillment experts, general merchandising experts, food and beverage experts, and style consultants. Target’s hiring numbers remained the same as the 2022 holiday sale.
Amazon (AMZN - Free Report) announced its hiring plan for the current holiday season. AMZN is likely to recruit 250,000 associates for full and part-time, and seasonal positions in a bid to expand its next-day delivery service.
This indicates an increase from last year's holiday season’s 150,000 positions, driven by its newly added 50 fulfillment centers. However, the company noted that it would hire fewer people in stores and warehouses this year due to reduced consumer spending in 2023.
Coming back to DLTR, the company has been optimizing its store portfolio through store openings, renovations, re-banners and closings. Its Key Real Estate Initiatives, which include the expansion of its $3 and $5 plus assortment in Dollar Tree stores, as well as Combo Stores, bode well.
The company has been aggressively expanding its $3, $4 and $5 frozen and refrigerated products across the Dollar Tree store base. It continues to expect to have at least 5,000 Dollar Tree Plus! Stores by the end of 2024. Its growth optimization and productivity improvement projects will include 650 new stores, an estimated 1,000 store renovations, numerous distribution center projects and technology projects to enhance its efficiencies and support growth.
Dollar Tree has been gaining from growth across both segments, higher traffic and robust market share gains. This led to year-over-year sales growth of 8.2% to $7,325 million in second-quarter fiscal 2023. Enterprise same-store sales (comps) improved 6.9% year over year.
Consequently, this Zacks Rank #3 (Hold) raised its fiscal 2023 top-line view. For fiscal 2023, Dollar Tree expects consolidated net sales of $30.6-$30.9 billion, up from the prior mentioned $30-$30.5 billion. We estimate sales to be $30.1 billion. The company anticipates mid-single-digit comps growth compared with the earlier mentioned low to mid-single-digit growth and our estimate of 4.4% growth.
Comps are likely to grow in the mid-single digits in the Dollar Tree and Family Dollar segments. Previously, it expected low to mid-single-digit growth at Dollar Tree and a mid-single-digit increase in the Family Dollar segment.
For third-quarter fiscal 2023, the company expects consolidated net sales of $7.3-$7.5 billion based on mid-single-digit comps growth for the enterprise. We estimate net sales of $7.3 million and comps growth of 3.7%. Comp sales are also expected to improve in the mid-single digits at Dollar Tree and Family Dollar.
However, Dollar Tree is reeling under inflationary costs, and witnessed a lower initial mark-on, an unfavorable sales mix and shrink, and wage investments in distribution center payroll, which affected margins. The metric contracted 220 basis points (bps) to 29.2%. We had estimated a 140-bps contraction in the gross margin. The gross margin contracted 400 bps to 33.4% at the Dollar Tree banner and 30 bps to 24.4% at the Family Dollar segment. Also, the operating margin declined 360 bps to 3.9% compared with our estimate of a 350-bps contraction.
The company has been witnessing higher SG&A expenses, owing to elevated payroll, increased repair and maintenance expenses, and store facility costs. In second-quarter fiscal 2023, Dollar Tree’s SG&A expenses, as a percentage of sales, increased 130 bps to 25.3% compared with our estimate of 200 bps expansion.
Going ahead, the company expects a challenging macro environment to continue hurting its sales mix in both segments. Also, margin pressure is expected to persist through the back half of the year.
For fiscal 2023, management expects earnings per share (EPS) of $5.78-$6.08 (including a 12-cent contribution from the 53rd week and a 12-cent charge for the legal reserve) compared with the prior mentioned $5.73-$6.13 for fiscal 2023. The view is in sync with our estimate of $5.92. For third-quarter fiscal 2023, EPS is estimated to be 94 cents to $1.04 compared with our estimate of $1.18.
Image Source: Zacks Investment Research
We note that DLTR shares have plunged 27.3% in the past three months compared with the industry’s decline of 3.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.