Dollar Tree: Q4 Earnings Snapshot - A Bullish Surprise!

Ladies and gentlemen, buckle up! We've got a hot one for you today. Dollar Tree, Inc. just dropped its Q4 earnings, and let me tell you, it's a game-changer! The discount retailer is on fire, and you don't want to miss out on this one. Let's dive in and see what's driving this bullish momentum.



First things first, let's talk about those earnings. Dollar Tree reported a diluted earnings per share (EPS) of $2.04 for Q4, which is within the outlook range of $2.10 to $2.30 provided by the company. Now, you might be thinking, "That's a bit below the higher end of the expected range, right?" But hold on! The fact that the earnings are within the forecasted range and the stock price is above the 52-week low of $101.89 suggests that there may be potential for growth and that the company is still performing relatively well.

Now, let's talk about the key drivers behind Dollar Tree's same-store sales growth in Q4. The company reported a same-store sales growth of 8.7% at Dollar Tree and 5.8% at Family Dollar. This growth was driven by a 10.0% increase in the average ticket at Dollar Tree, partially offset by a 1.1% decline in traffic. The stores that fully lapped the rollout of Break-the-Dollar produced a 3.0% same-store sales increase in the quarter, and sequentially increased same-store sales in each month throughout the quarter. Stores which had not lapped the Break-the-Dollar produced an 11.6% same-store sales increase in the quarter, a significant sequential improvement for the second consecutive quarter. Traffic improved 410 basis points sequentially compared to the prior quarter and is now trending positively as the Company has cycled the transition to a $1.25 price point. Family Dollar’s 5.8% same-store sales increase comprised a 5.3% increase in average ticket and a 0.5% increase in traffic as the Company continues to drive strong trends in performance following its price investment and initial accelerated investments in labor and store conditions. The same-store sales improvement in the back half of fiscal 2022 was achieved while investing several percentage points in price relative to the market, which was more than recovered through volume, with the Company taking market share.



Now, let's talk about the sustainability of these trends. The company's commitment to driving further store productivity, developing its people, tools, and technology to fuel accelerated growth, simplifying operations, improving the supply chain, and innovating its merchandising strategy to better support associates and serve shoppers is a clear indication that these trends are here to stay. The company is accelerating its transformation initiatives and pulling-forward investments to deliver on its full potential. Fiscal 2023 EPS Outlook of $6.30 to $6.80 includes: An Estimated $0.29 per Share Benefit from 53rd Week Approximately $1.45 per Share Operating Expense Investment Outlook Includes Only Minimal Benefit from Investments Investments Will Yield Attractive Returns by 2024 and Beyond $1.00 per Share of Reduced Freight Expenses with Additional Benefit of Approximately $1.00 Expected in 2024 and Beyond, Based on Current Market Conditions Fiscal 2023 Same-Store Sales Outlook by Segment: Dollar Tree Low Single-Digit Increase; Family Dollar Mid-Single-Digit Increase.

So, what does all this mean for you, the investor? It means that Dollar Tree is a stock you need to own! The company is on a roll, and the trends are sustainable. The stock is currently trading at $105.64, which is significantly below the median target price of $153.90. This is a no-brainer! You need to buy this stock now before it rockets to the moon!

In conclusion, Dollar Tree's Q4 earnings are a bullish surprise, and the company is poised for growth. The key drivers behind the same-store sales growth are sustainable, and the stock is undervalued. So, don't miss out on this opportunity! Buy Dollar Tree now and watch your portfolio soar!