This Analyst Is Bullish On Dollar Tree's Q1 Earnings: Expects Boost By Solid Demand, Inflation And Structural Changes

Telsey Advisory analyst Joseph Feldman reiterated an outperform rating on the shares of Dollar Tree Inc DLTR with a price target of $165.
The discount retailer will report 1Q23 earnings on May 25, Thursday.
The analyst reaffirmed the above-consensus 1Q23 and 2023 estimates. 1Q23 EPS of $1.55 and FY23 EPS of 6.68.
The analyst said the estimate reflects continued solid demand across both core Dollar Tree and Family Dollar high demand for value-priced basics, healthy at-home consumption, and strategic initiatives.
The core Dollar Tree business should continue to benefit from a higher price point of $1.25, the ongoing expansion of $3, $4, and $5 frozen and refrigerated products, and value-focused discretionary products, said the analyst.
In the analyst’s opinion, Structural changes, including raising the shelf height to 70”, expanding the assortment by 1,000 new SKUs, and rolling out additional cooler doors, should start to help.
These transformative initiatives, combined with joint sourcing and joint distribution centers, should help drive multiple years of improvement in productivity and profitability.
Longer term, the analyst believes Dollar Tree has a long runway of growth as it opens new stores, enhances merchandise value with higher base price, rolls out its Dollar Tree Plus! multi-price point assortment, and opens new Dollar Tree-Family Dollar combo stores.
Price Action: DLTR shares are trading lower by 0.96% at $159.14 on the last check Friday.
Photo via Wikimedia Commons

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