- 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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