🔺 What to do when markets are at an all-time high? Find smart bargains, like these.See Undervalued Stocks

Dollar Tree's Q3 results beat on improving demand, CFO to step down

Published 12/04/2024, 06:34 AM
Updated 12/04/2024, 09:36 AM
© Reuters. FILE PHOTO: A Dollar Tree sign is seen outside the store in Washington, U.S., June 1, 2021. REUTERS/Erin Scott/File Photo
DLTR
-

By Anuja Bharat Mistry

(Reuters) -Dollar Tree's third-quarter profit and sales beat market expectations on Wednesday as more customers shopped at its discount stores for products including apparel and electronics.

Shares of the company, which have lost nearly half of their value this year, rose about 4% as the dollar store raised the lower end of its annual forecasts, whose midpoint exceeded analysts' estimates.

Dollar Tree (NASDAQ:DLTR) also said CFO Jeff Davis will step down after roughly two years on the job, but will remain with the company until the end of fiscal 2024. His exit comes just weeks after CEO Rick Dreiling resigned.

"Given the string of recent disappointments, the quarterly results and guide are a relative win," said Scot Ciccarelli, analyst with Truist Securities.

He said the company faces challenges, including a new management and the need to gain market share from rival Walmart (NYSE:WMT).

Discount retailers have been losing market share in a race with big players including Walmart, Target (NYSE:TGT) and PDD Holding's e-commerce platform Temu as they keep prices low to attract cost-conscious consumers.

Dollar Tree is in the middle of an overhaul, especially of its Family Dollar banner. It decided to shutter 970 of its Family Dollar stores and review options, including the potential sale or spin off of the struggling banner.

"The fourth quarter got off to a softer start given the election and later-than-usual Thanksgiving timing," interim CEO Mike Creedon said.

In the third quarter, it benefited from higher store traffic as well as shoppers buying more per trip on average. Store traffic rose 1.6%, with growth in Dollar Tree and Family Dollar banners.

© Reuters. FILE PHOTO: A Dollar Tree sign is seen outside the store in Washington, U.S., June 1, 2021. REUTERS/Erin Scott/File Photo

Its quarterly gross margin expanded 120 basis points to 30.9%, partly due to lower freight costs.

Net sales of $7.56 billion beat expectations of $7.44 billion, while the company's adjusted earnings per share of $1.12 exceeded estimates by 5 cents, according to data compiled by LSEG.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.