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Here's How Dollar Tree (DLTR) Looks Just Before Q1 Earnings
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Dollar Tree, Inc. (DLTR - Free Report) is likely to register an increase in the top and bottom lines when it reports first-quarter fiscal 2022 results on May 26, before market open. The Zacks Consensus Estimate for revenues is pegged at $6.74 billion, indicating an improvement of 4.1% from the prior-year quarter.
The bottom line of the operator of discount variety retail stores is also expected to increase year over year. The Zacks Consensus Estimate for fiscal first-quarter earnings is pegged at $1.99 per share, suggesting growth of 24.4% from the year-ago period. The figure has moved down by a penny in the past seven days.
The company has a trailing four-quarter earnings surprise of 11.8%, on average. In the last reported quarter, the Chesapeake, VA-based company outperformed the Zacks Consensus Estimate by 12.3%.
Dollar Tree has been gaining from strength in the H2, Dollar Tree Plus and the new Combo Stores, which are part of the company’s Key Real Estate Initiatives. It is also poised to benefit from the expansion of the aforementioned stores as part of the plan. The company has been progressing well with its store optimization initiatives. These efforts are likely to have boosted its sales and comps in the to-be-reported quarter.
The Family Dollar H2 stores have been performing well, with the newest format store, Combo Store, exceeding expectations. At the Dollar Tree banner, its multi-price point Dollar Tree Plus! concept store has been gaining popularity among customers, particularly for the discretionary categories. This has helped improve store productivity.
Also, its Crafter’s Square offerings have been performing well, driven by the expansion of its Crafter’s Square offerings to include essential and seasonal products. The initiatives are expected to have boosted the company’s top line in the to-be-reported quarter.
Dollar Tree’s restructuring and expansion initiatives, including steady store openings and improvement of distribution centers, are likely to have driven revenues. The company has been on track to leverage Family Dollar and Dollar Tree distribution center systems, and combined merchandise.
The company’s digital and omni-channel capabilities and same-day delivery service with Instacart are also expected to have driven traffic trends in the fiscal first quarter.
The aforementioned factors instill optimism regarding the upcoming results.
On the last reported quarter’s earnings call, management predicted consolidated net sales of $6.63-$6.78 billion for first-quarter fiscal 2022, with enterprise same-store sales growth in the low-single digits. It anticipated earnings of $1.95-$2.10 per share for the fiscal first quarter.
However, DLTR has continued to reel under dismal margins due to increased freight costs, which have been denting the bottom line. The company has been impacted by all aspects of freight, including higher costs for inland transportation by truck and rail.
Management, on its last reported quarter’s earnings call, envisioned freight and supply-chain disruptions to remain headwinds in the near term. It expected cost pressures from import and domestic freight to continue in the first half of 2022 due to the annualization of fiscal 2021 rates. Additionally, management predicted diesel fuel prices to remain significantly higher in 2022. These factors are likely to have resulted in higher freight costs and a consequent decline in the gross margin in the fiscal first quarter.
The company has also been witnessing higher SG&A expenses for the past several quarters, owing to incremental COVID-related expenses as well as elevated payroll and store re-banner costs.
On its last reported quarter’s earnings call, management expected the pressures related to in-store and distribution center payroll costs to persist due to competitive markets, states increasing minimum wages, unemployment levels and completing the ongoing initiatives. This is expected to have resulted in higher SG&A expenses in the to-be-reported quarter.
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 -4.88%.
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 this season:
The Kroger Co. (KR - Free Report) currently has an Earnings ESP of +2.95% and a Zacks Rank of 2. The company is expected to have registered top and bottom-line growth in first-quarter fiscal 2022. The Zacks Consensus Estimate for KR’s quarterly revenues is pegged at $43.2 billion, which suggests a rise of 4.7% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Kroger’s quarterly earnings moved up 6.7% in the last 30 days to $1.27 per share, suggesting 6.7% growth from the year-ago quarter's reported number. KR has delivered an earnings beat of 22.1%, on average, in the trailing four quarters.
Designer Brands (DBI - Free Report) has an Earnings ESP of +4.35% and a Zacks Rank #2 at present. The company is expected to have registered top and bottom-line growth in first-quarter fiscal 2022. The Zacks Consensus Estimate for DBI’s quarterly revenues is pegged at $806.7 million, which suggests a rise of 14.7% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Designer Brands’ quarterly earnings moved up by a penny in the last 30 days to 23 cents per share, suggesting 91.7% growth from the year-ago quarter's reported number. DBI has delivered an earnings beat of 112.8%, on average, in the trailing four quarters.
Casey's General Stores (CASY - Free Report) currently has an Earnings ESP of +7.07% and a Zacks Rank #3. The company is anticipated to have registered top and bottom-line growth in fourth-quarter fiscal 2022. The Zacks Consensus Estimate for CASY’s quarterly earnings moved up by a penny in the last seven days to $1.49 per share, suggesting 33% growth from the year-ago quarter's reported number.
The Zacks Consensus Estimate for Casey's quarterly revenues is pegged at $3.4 billion, suggesting growth of 44.7% from the figure reported in the prior-year quarter. CASY has delivered an earnings beat of 21.6%, on average, in the trailing four quarters.
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Here's How Dollar Tree (DLTR) Looks Just Before Q1 Earnings
Dollar Tree, Inc. (DLTR - Free Report) is likely to register an increase in the top and bottom lines when it reports first-quarter fiscal 2022 results on May 26, before market open. The Zacks Consensus Estimate for revenues is pegged at $6.74 billion, indicating an improvement of 4.1% from the prior-year quarter.
The bottom line of the operator of discount variety retail stores is also expected to increase year over year. The Zacks Consensus Estimate for fiscal first-quarter earnings is pegged at $1.99 per share, suggesting growth of 24.4% from the year-ago period. The figure has moved down by a penny in the past seven days.
The company has a trailing four-quarter earnings surprise of 11.8%, on average. In the last reported quarter, the Chesapeake, VA-based company outperformed the Zacks Consensus Estimate by 12.3%.
Dollar Tree, Inc. Price and EPS Surprise
Dollar Tree, Inc. price-eps-surprise | Dollar Tree, Inc. Quote
Factors to Consider
Dollar Tree has been gaining from strength in the H2, Dollar Tree Plus and the new Combo Stores, which are part of the company’s Key Real Estate Initiatives. It is also poised to benefit from the expansion of the aforementioned stores as part of the plan. The company has been progressing well with its store optimization initiatives. These efforts are likely to have boosted its sales and comps in the to-be-reported quarter.
The Family Dollar H2 stores have been performing well, with the newest format store, Combo Store, exceeding expectations. At the Dollar Tree banner, its multi-price point Dollar Tree Plus! concept store has been gaining popularity among customers, particularly for the discretionary categories. This has helped improve store productivity.
Also, its Crafter’s Square offerings have been performing well, driven by the expansion of its Crafter’s Square offerings to include essential and seasonal products. The initiatives are expected to have boosted the company’s top line in the to-be-reported quarter.
Dollar Tree’s restructuring and expansion initiatives, including steady store openings and improvement of distribution centers, are likely to have driven revenues. The company has been on track to leverage Family Dollar and Dollar Tree distribution center systems, and combined merchandise.
The company’s digital and omni-channel capabilities and same-day delivery service with Instacart are also expected to have driven traffic trends in the fiscal first quarter.
The aforementioned factors instill optimism regarding the upcoming results.
On the last reported quarter’s earnings call, management predicted consolidated net sales of $6.63-$6.78 billion for first-quarter fiscal 2022, with enterprise same-store sales growth in the low-single digits. It anticipated earnings of $1.95-$2.10 per share for the fiscal first quarter.
However, DLTR has continued to reel under dismal margins due to increased freight costs, which have been denting the bottom line. The company has been impacted by all aspects of freight, including higher costs for inland transportation by truck and rail.
Management, on its last reported quarter’s earnings call, envisioned freight and supply-chain disruptions to remain headwinds in the near term. It expected cost pressures from import and domestic freight to continue in the first half of 2022 due to the annualization of fiscal 2021 rates. Additionally, management predicted diesel fuel prices to remain significantly higher in 2022. These factors are likely to have resulted in higher freight costs and a consequent decline in the gross margin in the fiscal first quarter.
The company has also been witnessing higher SG&A expenses for the past several quarters, owing to incremental COVID-related expenses as well as elevated payroll and store re-banner costs.
On its last reported quarter’s earnings call, management expected the pressures related to in-store and distribution center payroll costs to persist due to competitive markets, states increasing minimum wages, unemployment levels and completing the ongoing initiatives. This is expected to have resulted in higher SG&A expenses in the to-be-reported quarter.
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 -4.88%.
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 this season:
The Kroger Co. (KR - Free Report) currently has an Earnings ESP of +2.95% and a Zacks Rank of 2. The company is expected to have registered top and bottom-line growth in first-quarter fiscal 2022. The Zacks Consensus Estimate for KR’s quarterly revenues is pegged at $43.2 billion, which suggests a rise of 4.7% from the figure reported in the prior-year quarter.
You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Kroger’s quarterly earnings moved up 6.7% in the last 30 days to $1.27 per share, suggesting 6.7% growth from the year-ago quarter's reported number. KR has delivered an earnings beat of 22.1%, on average, in the trailing four quarters.
Designer Brands (DBI - Free Report) has an Earnings ESP of +4.35% and a Zacks Rank #2 at present. The company is expected to have registered top and bottom-line growth in first-quarter fiscal 2022. The Zacks Consensus Estimate for DBI’s quarterly revenues is pegged at $806.7 million, which suggests a rise of 14.7% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Designer Brands’ quarterly earnings moved up by a penny in the last 30 days to 23 cents per share, suggesting 91.7% growth from the year-ago quarter's reported number. DBI has delivered an earnings beat of 112.8%, on average, in the trailing four quarters.
Casey's General Stores (CASY - Free Report) currently has an Earnings ESP of +7.07% and a Zacks Rank #3. The company is anticipated to have registered top and bottom-line growth in fourth-quarter fiscal 2022. The Zacks Consensus Estimate for CASY’s quarterly earnings moved up by a penny in the last seven days to $1.49 per share, suggesting 33% growth from the year-ago quarter's reported number.
The Zacks Consensus Estimate for Casey's quarterly revenues is pegged at $3.4 billion, suggesting growth of 44.7% from the figure reported in the prior-year quarter. CASY has delivered an earnings beat of 21.6%, on average, in the trailing four quarters.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.