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Dollar Tree (DLTR)
:DLTR

Dollar Tree (DLTR) AI Stock Analysis

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Dollar Tree

(NASDAQ:DLTR)

Rating:65Neutral
Price Target:
$104.00
▲(17.35%Upside)
Dollar Tree's overall score is driven by strong technical analysis, indicating bullish momentum in the stock's price. However, the company's financial performance and valuation present significant concerns, particularly the negative net income and high leverage. Corporate events add a positive strategic perspective, but the lack of earnings call data prevents a full assessment of management's guidance and sentiment.
Positive Factors
Product Performance
The multi-price 3.0 stores showed a notable improvement in performance, with a 220 basis points comp lift compared to other formats.
Revenue Strategy
Dollar Tree's previous price adjustment from $1 to $1.25 was accepted by consumers, suggesting that upcoming price increases may also be well-received.
Sales Growth
Strong sales momentum, growth in both traffic & ticket; momentum has continued into 2Q.
Negative Factors
Earnings Pressure
2Q EPS are expected to be significantly lower year-over-year due to temporary factors.
Expense Pressures
Expense pressures are expected to increase due to operational complexities and labor hour expenses.
Tariff Risks
Tariffs remain a wild card with recent court rulings and China rhetoric, impacting margin sustainability.

Dollar Tree (DLTR) vs. SPDR S&P 500 ETF (SPY)

Dollar Tree Business Overview & Revenue Model

Company DescriptionDollar Tree, Inc. operates discount variety retail stores. It operates in two segments, Dollar Tree and Family Dollar. The Dollar Tree segment offers merchandise at the fixed price of $ 1.25. It provides consumable merchandise, including candy and food, and health and personal care, as well as everyday consumables, such as household paper and chemicals, and frozen and refrigerated food; variety merchandise comprising toys, durable housewares, gifts, stationery, party goods, greeting cards, softlines, arts and crafts supplies, and other items; and seasonal goods that include Christmas, Easter, Halloween, and Valentine's Day merchandise. As of January 29, 2022, this segment operated 8,061 stores under the Dollar Tree and Dollar Tree Canada brands, as well as 15 distribution centers in the United States and 2 distribution centers in Canada. The Family Dollar segment operates general merchandise retail discount stores that offer consumable merchandise, which comprise food and beverages, tobacco, health and personal care, household chemicals, paper products, hardware and automotive supplies, diapers, batteries, and pet food and supplies; and home products, including housewares, home décor, and giftware, as well as domestics, such as comforters, sheets, and towels. It also provides apparel and accessories merchandise comprising clothing, fashion accessories, and shoes; and seasonal and electronics merchandise that include Christmas, Easter, Halloween, and Valentine's Day merchandise, as well as personal electronics, which comprise pre-paid cellular phones and services, stationery and school supplies, and toys. As of January 29, 2022, this segment operated 8,016 stores under the Family Dollar brand; and 11 distribution centers. The company was founded in 1986 and is based in Chesapeake, Virginia.
How the Company Makes MoneyDollar Tree generates revenue primarily through the sale of its diverse product offerings at its retail locations. The company's key revenue streams include consumables, which cover food, snacks, and household supplies; seasonal and party goods, which are popular during holidays and special occasions; and a variety of general merchandise such as toys, apparel, and home decor. Dollar Tree also benefits from economies of scale by purchasing large quantities of goods at low prices and maintaining a low-cost operating model. The company's earnings are supported by its extensive network of physical stores, strategic location selection, and efficient supply chain management. Additionally, Dollar Tree's acquisition of Family Dollar expanded its market presence and diversified its customer base, contributing to its overall revenue growth.

Dollar Tree Key Performance Indicators (KPIs)

Any
Any
Dollar Tree Revenue Breakdown
Dollar Tree Revenue Breakdown
Analyzes revenue streams specifically from Dollar Tree stores, providing insight into sales performance and growth trends within this segment.
Chart InsightsDollar Tree's revenue from consumables and variety items shows steady growth, with consumables reaching new highs. The recent earnings call highlights a strategic shift with the sale of Family Dollar, allowing Dollar Tree to focus on its core brand and expand its 3.0 store format. Despite tariff challenges and increased SG&A costs, the company anticipates improved gross margins and plans for significant new store openings. This strategic pivot, coupled with strong consumer demand, especially from higher-income customers, positions Dollar Tree for potential growth in 2025.
Data provided by:Main Street Data

Dollar Tree Earnings Call Summary

Earnings Call Date:May 03, 2025
(Q1-2025)
|
% Change Since: 31.99%|
Next Earnings Date:Aug 21, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mix of positive developments, such as the strategic sale of Family Dollar and successful multi-price format expansion, alongside challenges from tariff impacts and increased operational costs. The company's focus on Dollar Tree's growth and profitability, combined with strong cash reserves, provides a solid foundation despite external pressures.
Q1-2025 Updates
Positive Updates
Sale of Family Dollar
Dollar Tree announced the sale of its Family Dollar business to Brigade-Macellum for over $1 billion, including $800 million in cash proceeds to focus on Dollar Tree's growth and profitability.
Q4 Revenue Performance
Net sales from continuing operations increased 0.7% to $5 billion, and consolidated net sales reached $8.3 billion, at the high end of the outlook range.
Multi-Price Format Success
3.0 format stores saw a 220 basis point comp lift compared to other formats, with 290 basis point lift in discretionary sales, and a plan to expand to 5,200 3.0 stores by the end of 2025.
Strong Consumer Acceptance
Dollar Tree's expanded assortment and multi-price offerings continue to gain market share, with a balanced comp growth in Q4 driven by increased traffic and ticket.
Cash and Balance Sheet Position
Dollar Tree ended the year with $1.3 billion in cash and expects to receive $800 million from the Family Dollar sale, along with $350 million in tax benefits.
Negative Updates
Challenges with Tariffs
Dollar Tree faces potential $20 million per month impact from new tariffs on goods from China, Canada, and Mexico, with ongoing mitigation efforts required.
Decreased Net Sales from Family Dollar
Net sales from discontinued operations decreased 11.2% to $3.3 billion, reflecting a 1.3% comp, store closings, and lapping of a 53rd week.
SG&A Cost Increases
SG&A costs are expected to increase by approximately 20% in 2025 due to higher IT spending, payroll, and depreciation.
Operational Cost Pressures
Continued higher store payroll costs, state-mandated minimum wage increases, and additional distribution costs are expected to contribute to SG&A deleverage.
Company Guidance
During the Dollar Tree Q4 2024 earnings call, guidance for fiscal year 2025 highlighted several key metrics. The company expects net sales to range between $18.5 billion to $19.1 billion, driven by comparable store sales growth of 3% to 5%. They anticipate a modest improvement in gross margin due to mitigation actions on tariffs, with an expected impact of about $20 million per month from additional tariffs if unmitigated. The adjusted SG&A rate for Dollar Tree is projected to deleverage by 50 to 80 basis points, primarily due to higher store payroll and investments in IT. Adjusted EPS is forecasted to be between $5 and $5.50. Capital expenditures are estimated at $1.2 billion to $1.3 billion, with plans to open approximately 400 new Dollar Tree stores. The company also plans to return excess cash to shareholders, with expectations to be back in the market repurchasing shares.

Dollar Tree Financial Statement Overview

Summary
Dollar Tree's financial health shows mixed results. While the cash flow remains positive with a decent free cash flow, the income statement reveals declining profitability with a negative net income, and the balance sheet indicates increased leverage, raising concerns about financial stability.
Income Statement
45
Neutral
Dollar Tree's income statement shows a concerning trend with declining profitability. The TTM data reveals a negative net income, indicating financial stress. Gross profit margin remains stable, but the net profit margin is negative due to significant net losses. Revenue showed growth in prior years, but TTM figures suggest a downturn.
Balance Sheet
55
Neutral
The balance sheet indicates a relatively stable financial structure with a balanced debt-to-equity ratio, though with high total liabilities. The equity ratio is healthy, suggesting that a significant portion of assets is financed by equity. However, the overall leverage increase in TTM raises concerns about financial risk.
Cash Flow
60
Neutral
Cash flow metrics are mixed, with positive operating cash flow and a decent free cash flow, which has grown over the past year. However, the negative net income impacts the efficiency ratios, and the reliance on debt financing in TTM could present future liquidity challenges.
Breakdown
Mar 2025Mar 2024Mar 2023Mar 2022Mar 2021
Income StatementTotal Revenue
17.58B30.60B28.33B26.32B25.51B
Gross Profit
6.29B9.33B8.94B7.74B7.79B
EBIT
1.46B-881.80M2.24B1.81B1.89B
EBITDA
2.02B-40.90M3.00B2.52B2.57B
Net Income Common Stockholders
-3.03B-998.40M1.62B1.33B1.34B
Balance SheetCash, Cash Equivalents and Short-Term Investments
1.26B684.90M642.80M984.90M1.42B
Total Assets
18.64B22.02B23.02B21.72B20.70B
Total Debt
7.83B10.39B10.13B9.97B9.64B
Net Debt
6.57B9.70B9.48B8.99B8.22B
Total Liabilities
14.67B14.71B14.27B14.00B13.41B
Stockholders Equity
3.98B7.31B8.75B7.72B7.29B
Cash FlowFree Cash Flow
1.56B576.90M361.00M408.70M1.82B
Operating Cash Flow
2.86B2.68B1.61B1.43B2.72B
Investing Cash Flow
-1.70B-2.11B-1.25B-1.02B-889.70M
Financing Cash Flow
-411.30M-530.00M-686.80M-836.50M-949.90M

Dollar Tree Technical Analysis

Technical Analysis Sentiment
Positive
Last Price88.62
Price Trends
50DMA
81.19
Positive
100DMA
76.16
Positive
200DMA
74.23
Positive
Market Momentum
MACD
2.97
Positive
RSI
53.26
Neutral
STOCH
67.86
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DLTR, the sentiment is Positive. The current price of 88.62 is above the 20-day moving average (MA) of 88.53, above the 50-day MA of 81.19, and above the 200-day MA of 74.23, indicating a bullish trend. The MACD of 2.97 indicates Positive momentum. The RSI at 53.26 is Neutral, neither overbought nor oversold. The STOCH value of 67.86 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DLTR.

Dollar Tree Risk Analysis

Dollar Tree disclosed 24 risk factors in its most recent earnings report. Dollar Tree reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Dollar Tree Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
WMWMT
73
Outperform
$798.25B42.7522.80%0.89%4.22%-0.17%
72
Outperform
$6.87B33.7912.32%8.70%2.54%
BJBJ
71
Outperform
$14.75B25.9932.76%2.84%11.25%
DGDG
68
Neutral
$21.37B19.0015.69%2.10%4.77%-23.73%
65
Neutral
$20.33B19.25%-9.88%-205.57%
62
Neutral
$6.90B11.242.93%3.89%2.68%-24.71%
TGTGT
52
Neutral
$42.40B10.2629.08%4.68%-0.69%2.03%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
DLTR
Dollar Tree
88.62
-25.76
-22.52%
DG
Dollar General
111.77
-20.07
-15.22%
TGT
Target
93.94
-48.36
-33.98%
WMT
Walmart
99.35
32.94
49.60%
OLLI
Ollie's Bargain Outlet Holding
114.41
24.58
27.36%
BJ
Bj's Wholesale Club Holdings
111.28
25.19
29.26%

Dollar Tree Corporate Events

Stock BuybackBusiness Operations and StrategyFinancial Disclosures
Dollar Tree Reports Strong Q1 2025 Financial Results
Positive
Jun 4, 2025

Dollar Tree, Inc. reported its first-quarter fiscal 2025 results, highlighting an 11.3% increase in net sales to $4.6 billion, driven by a 5.4% rise in same-store sales. The company completed over $500 million in share repurchases and updated its adjusted EPS outlook to reflect these repurchases. The sale of Family Dollar is on track to close in the second quarter, with expected net proceeds of approximately $800 million. Dollar Tree’s strategic initiatives, including store openings and conversions to a multi-price format, contributed to its performance, positioning the company to capitalize on economic uncertainties and enhance customer value.

The most recent analyst rating on (DLTR) stock is a Hold with a $85.00 price target. To see the full list of analyst forecasts on Dollar Tree stock, see the DLTR Stock Forecast page.

Financial Disclosures
Dollar Tree to Announce Q1 2025 Financial Results
Neutral
May 21, 2025

On May 21, 2025, Dollar Tree, Inc. announced it will release its first quarter 2025 financial results on June 4, 2025, before the market opens, followed by a conference call for investors and analysts. The call will be led by CEO Mike Creedon and CFO Stewart Glendinning, providing insights into the company’s performance and allowing for a question-and-answer session, which could impact stakeholder perspectives on the company’s financial health and strategic direction.

The most recent analyst rating on (DLTR) stock is a Hold with a $112.00 price target. To see the full list of analyst forecasts on Dollar Tree stock, see the DLTR Stock Forecast page.

Private Placements and FinancingBusiness Operations and Strategy
Dollar Tree Secures New Credit Agreements with JPMorgan
Positive
Mar 27, 2025

On March 21, 2025, Dollar Tree, Inc. entered into two significant credit agreements with JPMorgan Chase Bank, N.A. The first is a $1,500 million revolving credit facility maturing in 2030, and the second is a $1,000 million 364-day revolving credit facility maturing in 2026. These agreements, which include various covenants and conditions, replace the company’s previous credit arrangement and are expected to enhance Dollar Tree’s financial flexibility. The agreements allow for voluntary repayment without penalties, supporting the company’s strategic financial management.

M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
Dollar Tree to Divest Family Dollar for $1,007 Million
Neutral
Mar 26, 2025

On March 26, 2025, Dollar Tree, Inc. announced its decision to divest its Family Dollar business to Brigade and Macellum for approximately $1,007 million, with net proceeds expected to be around $804 million. This strategic move, concluded after a thorough review, is anticipated to allow Dollar Tree to concentrate on its long-term growth and profitability. The sale is expected to close in about 90 days, subject to customary conditions, including antitrust approval. The financial results for the fourth quarter of fiscal 2024 showed a slight increase in net sales by 0.7% to $5 billion, despite a decline in gross profit and operating income. The company also reported a diluted loss per share of $17.17, while adjusted diluted EPS from continuing operations was $2.11.

Executive/Board ChangesBusiness Operations and Strategy
Dollar Tree Appoints New CFO Stewart Glendinning
Positive
Mar 5, 2025

On March 4, 2025, Dollar Tree, Inc. announced the appointment of Stewart Glendinning as the new Chief Financial Officer, effective March 30, 2025. Glendinning, who joined the company earlier in 2025, has been involved in enterprise-wide transformation initiatives and the review of strategic alternatives for the Family Dollar business. This leadership change is expected to support Dollar Tree’s growth ambitions for 2025, as emphasized by CEO Mike Creedon. The company also announced a conference call scheduled for March 26, 2025, to discuss financial results for the fourth quarter and fiscal year ended February 1, 2025.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.