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Know How Dollar Tree (DLTR) is Placed Ahead of Q1 Earnings
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Dollar Tree, Inc. (DLTR - Free Report) is slated to release first-quarter fiscal 2021 results on May 27. The discount retailer is expected to have witnessed revenue and earnings growth in the to-be-reported quarter.
The Zacks Consensus Estimate for fiscal first-quarter earnings of $1.37 per share suggests an increase of 31.7% from the year-ago quarter’s reported figure. Moreover, the consensus mark has moved up by a penny in the past seven days. The consensus mark for revenues is pegged at $6.36 billion, indicating growth of 1.1% from the figure reported in the year-ago quarter.
In the last reported quarter, the company delivered an earnings surprise of 0.47%. Moreover, it delivered an earnings surprise of 16.82%, on average, in the trailing four quarters.
Dollar Tree has been gaining from strong top-line growth, robust comparable store sales (comps) across both formats, improved gross margin and lower costs. Strength in Dollar Tree and Family Dollar segments is anticipated to have helped deliver solid comps performance again in the to-be-reported quarter. Moreover, the company is expected to have witnessed gross margin growth as a result of a positive sales mix, lower markdowns, leverage on occupancy costs due to robust comps and better shrink.
Furthermore, the company’s store rationalization and renovation efforts, backed by the success of the H2 program, Dollar Tree Plus! initiative, Crafter’s Square and recently launched Combination store format, are expected to have boosted the top and bottom lines in the fiscal first quarter. Apart from these, its restructuring and expansion initiatives, as evident from steady store openings and improvement of distribution centers, are anticipated to have aided the top line.
However, higher COVID-related costs are expected to have partly affected margins in the fiscal first quarter. Higher distribution costs, including the pandemic-related payroll costs, particularly payment of incremental bonuses, have been headwinds. Also, the company has been incurring additional operating costs related to the pandemic, which have been hurting margins to some extent.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Dollar Tree this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Dollar Tree has a Zacks Rank #3 and an Earnings ESP of -0.71%.
Stocks With Favorable Combination
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:
Dollar General Corporation (DG - Free Report) has an Earnings ESP of +0.94% and a Zacks Rank #3 at present.
Big Lots, Inc. (BIG - Free Report) currently has an Earnings ESP of +6.70% and a Zacks Rank #3.
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The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
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Know How Dollar Tree (DLTR) is Placed Ahead of Q1 Earnings
Dollar Tree, Inc. (DLTR - Free Report) is slated to release first-quarter fiscal 2021 results on May 27. The discount retailer is expected to have witnessed revenue and earnings growth in the to-be-reported quarter.
The Zacks Consensus Estimate for fiscal first-quarter earnings of $1.37 per share suggests an increase of 31.7% from the year-ago quarter’s reported figure. Moreover, the consensus mark has moved up by a penny in the past seven days. The consensus mark for revenues is pegged at $6.36 billion, indicating growth of 1.1% from the figure reported in the year-ago quarter.
In the last reported quarter, the company delivered an earnings surprise of 0.47%. Moreover, it delivered an earnings surprise of 16.82%, on average, in the trailing four quarters.
Dollar Tree, Inc. Price and EPS Surprise
Dollar Tree, Inc. price-eps-surprise | Dollar Tree, Inc. Quote
Key Factors to Note
Dollar Tree has been gaining from strong top-line growth, robust comparable store sales (comps) across both formats, improved gross margin and lower costs. Strength in Dollar Tree and Family Dollar segments is anticipated to have helped deliver solid comps performance again in the to-be-reported quarter. Moreover, the company is expected to have witnessed gross margin growth as a result of a positive sales mix, lower markdowns, leverage on occupancy costs due to robust comps and better shrink.
Furthermore, the company’s store rationalization and renovation efforts, backed by the success of the H2 program, Dollar Tree Plus! initiative, Crafter’s Square and recently launched Combination store format, are expected to have boosted the top and bottom lines in the fiscal first quarter. Apart from these, its restructuring and expansion initiatives, as evident from steady store openings and improvement of distribution centers, are anticipated to have aided the top line.
However, higher COVID-related costs are expected to have partly affected margins in the fiscal first quarter. Higher distribution costs, including the pandemic-related payroll costs, particularly payment of incremental bonuses, have been headwinds. Also, the company has been incurring additional operating costs related to the pandemic, which have been hurting margins to some extent.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Dollar Tree this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Dollar Tree has a Zacks Rank #3 and an Earnings ESP of -0.71%.
Stocks With Favorable Combination
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:
American Eagle Outfitters, Inc. (AEO - Free Report) currently has an Earnings ESP of +5.04% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Dollar General Corporation (DG - Free Report) has an Earnings ESP of +0.94% and a Zacks Rank #3 at present.
Big Lots, Inc. (BIG - Free Report) currently has an Earnings ESP of +6.70% and a Zacks Rank #3.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
Download FREE: How to Profit from Trillions on Spending for Infrastructure >>