Dollar Tree shares fall the most in 65 weeks on Tuesday, quarterly revenue tops estimates but holiday-quarter profit forecast below expectations

November 27, 2019 10:13 am

Dollar Tree Inc’s (DLTR) third-quarter revenue, reported on Tuesday, exceeded Wall Street estimates, as renovated stores and expanded product assortment lured more shoppers to its namesake and the Family Dollar chain.

However, the company now projects holiday-quarter earnings below market consensus, because of an anticipated impact from US tariffs on imported goods from China.

Dollar Tree shares closed lower for the second time in the past ten trading sessions on NASDAQ on Tuesday. It has also been the steepest daily loss since August 30th 2018. The stock went down 15.24% ($17.13) to $95.26, after touching an intraday low at $92.67, or a price level not seen since August 15th ($92.34).

Shares of Dollar Tree Inc have surged 5.47% so far in 2019 compared with a 25.28% gain for the benchmark index, S&P 500 (SPX).

In 2018, Dollar Tree’s stock went down 15.83%, thus, it again underperformed the S&P 500, which registered a 6.24% loss.

Dollar Tree’s total revenue went up 3.7% year-on-year to $5.75 billion during the third quarter ended on November 2nd. In comparison, analysts on average had expected revenue of $5.74 billion.

Same-store sales at Dollar Tree stores were reported to have surged 2.5% year-on-year during the third quarter, while falling short of the median analyst forecast of a 2.54% growth.

Meanwhile, earnings per share, which exclude special items, were reported at $1.08 during the third quarter, which again missed a consensus of estimates of $1.13 per share.

The discount store operator now expects fourth-quarter earnings within the range of $1.70 to $1.80 per share, which compares with a median analyst forecast of $2.02 per share.

The company also said it projected fourth-quarter revenue within the range of $6.33 billion to $6.44 billion, while analysts on average are expecting sales of $6.41 billion.

Analyst stock price forecast and recommendation

According to CNN Money, the 24 analysts, offering 12-month forecasts regarding Dollar Tree Inc’s stock price, have a median target of $117.50, with a high estimate of $140.00 and a low estimate of $100.00. The median estimate represents a 23.35% upside compared to the closing price of $95.26 on November 26th.

The same media also reported that 13 out of 26 surveyed investment analysts had rated Dollar Tree Inc’s stock as “Buy”, while 10 – as “Hold”.

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