Dollar Tree said in the filing that management believes the Department of Labor's (DoL) overtime regulations will not have a material impact on its fourth-quarter results following a temporary injunction.
A federal judge in Texas struck down a motion that would have seen millions of previously exempted workers benefiting from time-and-a-half overtime pay if they earned less than $47,476 a year.
Hood noted that the company previously guided to a $0.03 to $0.04 per share expense headwind due to the overtime regulation and this was provided prior the November 22 preliminary injunction and would have come into effect on December 1.
Accordingly, the analyst boosted his estimates for Dollar Tree by four cents to $1.34 per share in the fourth quarter and $3.85 per share for the full year. To reflect the upward revised guidance the analyst also boosted his price target on the dollar store chain to $96 from a previous $95.
It should also be noted that the company added in its filing that it remains unclear what the long-term impact the injunction will have on overtime regulation. The company also added that once the matter is resolved, it can then analyze any alternatives to address the overtime regulations under the Fair Labor Standards Act.
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