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Will Dollar Tree's Growth Initiatives Help Sustain Momentum?
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Dollar Tree, Inc. (DLTR - Free Report) is progressing well with its growth initiatives, which include store expansion strategies, enhancing store productivity, tapping new markets and incorporating innovative sales channels. Further, Dollar Tree remains on track with the integration of Family Dollar, which is expected to generate annual run rate synergies of at least $300 million by the end of the third year of the acquisition.
Subsequently, its shares have yielded a return of 5% in the past three months, against the Zacks categorized Retail-Wholesale sector’s fall of 0.5%.
Throwing more light on the Family Dollar buyout, Dollar Tree is likely to become a mega U.S. discount retailer after the completion of the integration process. This will make the retailer a behemoth that can single handedly counter competition from retail bellwethers in the dollar-discount store segment. Also, the company will be strongly positioned to reach out to more value-seeking consumers, offering multiple assortments, at more compelling prices.
Alongside, management is focusing on an extensive store network and incorporating technological advancements. These are likely to enable the company to generate healthy sales and gain market share.
Now, heading toward the company’s quarterly performance, Dollar Tree posted better-than-expected bottom-line performance for the fiscal third quarter, after delivering a negative earnings surprise in the previous quarter. Notably, the company continued its stellar comparable-store sales (comps) performance as it reported third-quarter fiscal 2016 results which marked its 35th straight quarter of comps growth.
For fourth-quarter fiscal 2016, earnings are now anticipated in the range of $1.24–$1.33 per share, reflecting an upside from the previous forecast of $1.21–$1.30. Consequently, the Zacks Consensus Estimate for the fiscal fourth quarter and fiscal 2016 increased 3.1% to $1.32 and 1.6% to $3.74, respectively, over the past 60 days.
However, management trimmed its fiscal 2016 sales view and narrowed its earnings guidance range. The company now projects fiscal 2016 net sales in the band of $20.67–$20.77 billion compared with $20.69–$20.87 billion expected earlier. Earnings per share are envisioned in the $3.67–$3.76 range for fiscal 2016.
Additionally, the increased costs and cannibalization during the integration and re-banner process are expected to weigh on the company’s results for some time. Moreover, currency headwinds and stiff competition remain threats for the company.
Stocks that Warrant a Look
Dollar Tree currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the same industry include Burlington Stores, Inc. (BURL - Free Report) , PriceSmart, Inc. (PSMT - Free Report) and Ross Stores, Inc. (ROST - Free Report) .
Burlington Stores, with a long-term earnings growth rate of 19.9%, has skyrocketed 104.2% year to date. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
PriceSmart, which carries a Zacks Rank #2 (Buy), has a long-term earnings growth rate of 15%.
Ross Stores, a Zacks Rank #2 stock, has a long-term earnings growth rate of 11.4%. The stock has gained 26.4% year to date.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>
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Will Dollar Tree's Growth Initiatives Help Sustain Momentum?
Dollar Tree, Inc. (DLTR - Free Report) is progressing well with its growth initiatives, which include store expansion strategies, enhancing store productivity, tapping new markets and incorporating innovative sales channels. Further, Dollar Tree remains on track with the integration of Family Dollar, which is expected to generate annual run rate synergies of at least $300 million by the end of the third year of the acquisition.
Subsequently, its shares have yielded a return of 5% in the past three months, against the Zacks categorized Retail-Wholesale sector’s fall of 0.5%.
Throwing more light on the Family Dollar buyout, Dollar Tree is likely to become a mega U.S. discount retailer after the completion of the integration process. This will make the retailer a behemoth that can single handedly counter competition from retail bellwethers in the dollar-discount store segment. Also, the company will be strongly positioned to reach out to more value-seeking consumers, offering multiple assortments, at more compelling prices.
Alongside, management is focusing on an extensive store network and incorporating technological advancements. These are likely to enable the company to generate healthy sales and gain market share.
Now, heading toward the company’s quarterly performance, Dollar Tree posted better-than-expected bottom-line performance for the fiscal third quarter, after delivering a negative earnings surprise in the previous quarter. Notably, the company continued its stellar comparable-store sales (comps) performance as it reported third-quarter fiscal 2016 results which marked its 35th straight quarter of comps growth.
For fourth-quarter fiscal 2016, earnings are now anticipated in the range of $1.24–$1.33 per share, reflecting an upside from the previous forecast of $1.21–$1.30. Consequently, the Zacks Consensus Estimate for the fiscal fourth quarter and fiscal 2016 increased 3.1% to $1.32 and 1.6% to $3.74, respectively, over the past 60 days.
DOLLAR TREE INC Price and Consensus
DOLLAR TREE INC Price and Consensus | DOLLAR TREE INC Quote
However, management trimmed its fiscal 2016 sales view and narrowed its earnings guidance range. The company now projects fiscal 2016 net sales in the band of $20.67–$20.77 billion compared with $20.69–$20.87 billion expected earlier. Earnings per share are envisioned in the $3.67–$3.76 range for fiscal 2016.
Additionally, the increased costs and cannibalization during the integration and re-banner process are expected to weigh on the company’s results for some time. Moreover, currency headwinds and stiff competition remain threats for the company.
Stocks that Warrant a Look
Dollar Tree currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the same industry include Burlington Stores, Inc. (BURL - Free Report) , PriceSmart, Inc. (PSMT - Free Report) and Ross Stores, Inc. (ROST - Free Report) .
Burlington Stores, with a long-term earnings growth rate of 19.9%, has skyrocketed 104.2% year to date. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
PriceSmart, which carries a Zacks Rank #2 (Buy), has a long-term earnings growth rate of 15%.
Ross Stores, a Zacks Rank #2 stock, has a long-term earnings growth rate of 11.4%. The stock has gained 26.4% year to date.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>