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Here's Why Dollar Tree (DLTR) is Poised for Q2 Earnings Beat
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Dollar Tree, Inc. (DLTR - Free Report) is likely to register increases in the top and bottom lines when it reports second-quarter fiscal 2022 results on Aug 25, before market open. The Zacks Consensus Estimate for revenues is pegged at $6.79 billion, indicating an improvement of 7% from the prior-year quarter’s reported figure.
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 second-quarter earnings is pegged at $1.57 per share, suggesting growth of 27.6% from the year-ago period. The consensus mark has been unchanged in the past 30 days.
The company has a trailing four-quarter earnings surprise of 13.1%, on average. In the last reported quarter, the Chesapeake, VA-based company outperformed the Zacks Consensus Estimate by 19.7%.
Dollar Tree’s second-quarter fiscal 2022 results are likely to have gained from the completion of the conversion of the Dollar Tree banner’s $1.25 price point initiative. This is expected to have boosted the top line and margins in the fiscal second quarter. Its Combo store and H2 renovation initiatives also bode well.
The company’s restructuring and expansion initiatives, including store openings and improvement of distribution centers, are likely to have boosted revenues in the to-be-reported quarter. Dollar Tree 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 second quarter. The aforementioned factors instill optimism regarding the upcoming results.
Dollar Tree’s margins are likely to have benefited from measures to control costs. Despite the continued increase in freight costs and SG&A expenses, the gross margin is expected to reflect gains from improved initial mark-on, favorable product mix at the Dollar Tree banner, and distribution and occupancy cost leverage. On the last reported quarter’s earnings call, management anticipated improved margins for the Dollar Tree banner in the quarters ahead, driven by strategic initiatives and leverage on SG&A.
On the last reported quarter’s earnings call, management predicted consolidated net sales of $6.65-$6.78 billion for second-quarter fiscal 2022, with enterprise same-store sales growth in the low to mid-single digits. DLTR anticipated earnings of $1.45-$1.55 per share.
However, elevated freight costs have been weighing on the company’s gross margin for a while now. On the last quarter’s earnings call, the company expected freight and supply-chain disruptions to remain headwinds in the near term. It anticipated the cost pressures from domestic import freight to continue in the first half of 2022 due to the annualization of fiscal 2021 rates. Additionally, management predicted significantly higher diesel fuel prices for fiscal 2022. These are likely to have dented the company’s margins and bottom line to some extent in the to-be-reported quarter.
Moreover, Dollar Tree’s earnings view for the fiscal second quarter includes a 24-cent-per-share impact from the West Memphis distribution center matter and stock compensation expenses.
What the Zacks Model Unveils
Our proven conclusively predicts 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. 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 #2 and an Earnings ESP of +1.75%.
Other Stocks With Favorable Combination
Here are some other companies you may want to consider, as our model shows that these also have the right combination of elements to post an earnings beat this season:
Ulta Beauty (ULTA - Free Report) currently has an Earnings ESP of +2.37% and a Zacks Rank of 2. The company is likely to register top and bottom-line growth when it reports second-quarter fiscal 2022 results. The consensus mark for ULTA’s quarterly revenues is pegged at $2.2 billion, which suggests a rise of 11.7% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Ulta Beauty’s earnings has moved up 0.4% to $4.86 per share in the past seven days. The consensus estimate indicates 6.6% growth from $4.56 reported in the year-ago quarter. ULTA delivered an earnings beat of 49.8%, on average, in the trailing four quarters.
Dollar General (DG - Free Report) currently has an Earnings ESP of +1.14% and a Zacks Rank of 2. The company is likely to register increases in the top and bottom lines when it reports second-quarter fiscal 2022 numbers. The consensus mark for DG’s quarterly earnings has moved down by a penny in the past seven days to $2.91 per share. The consensus estimate suggests 8.2% growth from the year-ago quarter’s reported number.
The Zacks Consensus Estimate for Dollar General’s quarterly revenues is pegged at $9.4 billion, which suggests growth of 8.5% from the figure reported in the prior-year quarter. DG delivered an earnings beat of 2.8%, on average, in the trailing four quarters.
Advance Auto Parts (AAP - Free Report) currently has an Earnings ESP of +0.48% and a Zacks Rank of 3. The Zacks Consensus Estimate for its second-quarter 2022 earnings has moved 0.5% south to $3.75 per share in the past 30 days. However, the consensus mark suggests 10.3% growth from the year-ago quarter’s reported number.
Advance Auto Parts’ top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $2.75 billion, which suggests a rise of 3.7% from the figure reported in the prior-year quarter. AAP delivered an earnings beat of 9.2%, on average, in the trailing four quarters.
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Here's Why Dollar Tree (DLTR) is Poised for Q2 Earnings Beat
Dollar Tree, Inc. (DLTR - Free Report) is likely to register increases in the top and bottom lines when it reports second-quarter fiscal 2022 results on Aug 25, before market open. The Zacks Consensus Estimate for revenues is pegged at $6.79 billion, indicating an improvement of 7% from the prior-year quarter’s reported figure.
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 second-quarter earnings is pegged at $1.57 per share, suggesting growth of 27.6% from the year-ago period. The consensus mark has been unchanged in the past 30 days.
The company has a trailing four-quarter earnings surprise of 13.1%, on average. In the last reported quarter, the Chesapeake, VA-based company outperformed the Zacks Consensus Estimate by 19.7%.
Dollar Tree, Inc. Price and EPS Surprise
Dollar Tree, Inc. price-eps-surprise | Dollar Tree, Inc. Quote
Factors to Consider
Dollar Tree’s second-quarter fiscal 2022 results are likely to have gained from the completion of the conversion of the Dollar Tree banner’s $1.25 price point initiative. This is expected to have boosted the top line and margins in the fiscal second quarter. Its Combo store and H2 renovation initiatives also bode well.
The company’s restructuring and expansion initiatives, including store openings and improvement of distribution centers, are likely to have boosted revenues in the to-be-reported quarter. Dollar Tree 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 second quarter. The aforementioned factors instill optimism regarding the upcoming results.
Dollar Tree’s margins are likely to have benefited from measures to control costs. Despite the continued increase in freight costs and SG&A expenses, the gross margin is expected to reflect gains from improved initial mark-on, favorable product mix at the Dollar Tree banner, and distribution and occupancy cost leverage. On the last reported quarter’s earnings call, management anticipated improved margins for the Dollar Tree banner in the quarters ahead, driven by strategic initiatives and leverage on SG&A.
On the last reported quarter’s earnings call, management predicted consolidated net sales of $6.65-$6.78 billion for second-quarter fiscal 2022, with enterprise same-store sales growth in the low to mid-single digits. DLTR anticipated earnings of $1.45-$1.55 per share.
However, elevated freight costs have been weighing on the company’s gross margin for a while now. On the last quarter’s earnings call, the company expected freight and supply-chain disruptions to remain headwinds in the near term. It anticipated the cost pressures from domestic import freight to continue in the first half of 2022 due to the annualization of fiscal 2021 rates. Additionally, management predicted significantly higher diesel fuel prices for fiscal 2022. These are likely to have dented the company’s margins and bottom line to some extent in the to-be-reported quarter.
Moreover, Dollar Tree’s earnings view for the fiscal second quarter includes a 24-cent-per-share impact from the West Memphis distribution center matter and stock compensation expenses.
What the Zacks Model Unveils
Our proven conclusively predicts 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. 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 #2 and an Earnings ESP of +1.75%.
Other Stocks With Favorable Combination
Here are some other companies you may want to consider, as our model shows that these also have the right combination of elements to post an earnings beat this season:
Ulta Beauty (ULTA - Free Report) currently has an Earnings ESP of +2.37% and a Zacks Rank of 2. The company is likely to register top and bottom-line growth when it reports second-quarter fiscal 2022 results. The consensus mark for ULTA’s quarterly revenues is pegged at $2.2 billion, which suggests a rise of 11.7% 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 Ulta Beauty’s earnings has moved up 0.4% to $4.86 per share in the past seven days. The consensus estimate indicates 6.6% growth from $4.56 reported in the year-ago quarter. ULTA delivered an earnings beat of 49.8%, on average, in the trailing four quarters.
Dollar General (DG - Free Report) currently has an Earnings ESP of +1.14% and a Zacks Rank of 2. The company is likely to register increases in the top and bottom lines when it reports second-quarter fiscal 2022 numbers. The consensus mark for DG’s quarterly earnings has moved down by a penny in the past seven days to $2.91 per share. The consensus estimate suggests 8.2% growth from the year-ago quarter’s reported number.
The Zacks Consensus Estimate for Dollar General’s quarterly revenues is pegged at $9.4 billion, which suggests growth of 8.5% from the figure reported in the prior-year quarter. DG delivered an earnings beat of 2.8%, on average, in the trailing four quarters.
Advance Auto Parts (AAP - Free Report) currently has an Earnings ESP of +0.48% and a Zacks Rank of 3. The Zacks Consensus Estimate for its second-quarter 2022 earnings has moved 0.5% south to $3.75 per share in the past 30 days. However, the consensus mark suggests 10.3% growth from the year-ago quarter’s reported number.
Advance Auto Parts’ top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $2.75 billion, which suggests a rise of 3.7% from the figure reported in the prior-year quarter. AAP delivered an earnings beat of 9.2%, on average, in the trailing four quarters.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.