I Don't Want A Money Tree, Give Me A Dollar Tree

Dollar Tree, Inc. DLTR shares are jumping this morning, gaining almost 4% after the dollar store reported sharply higher earnings, beating Wall Street estimates. The company reported first quarter earnings of 82 cents per share on $1.55 billion in revenues, blowing past Wall Street estimates of 75 cents per share on $1.53 billion in revenues. The company also said second quarter guidance would be $1.51-$1.53 billion, in line with Wall Street estimates of $1.53 billion. The company is still cheap at these levels, trading at 14.3 times 2012 earnings, and there are still catalysts such as online selling, and continued store expansion, as well as the continued move from places such as Wal-Mart WMT to dollar stores, as customers try to squeeze every dollar of income. “I am pleased by Dollar Tree's continuing growth in sales and earnings,” President and CEO Bob Sasser said. “Our business momentum was strong throughout the first quarter. Seasonal performance was outstanding from Valentine's through Easter. Both traffic and ticket increased as more customers continue to rely on Dollar Tree for great merchandise values and a fun, convenient shopping experience. “The 7.1% comp-store sales increase following strong first quarter growth for the past two years is further validation of Dollar Tree's efforts to find more ways to provide more value to more customers every day.” Other dollar store names such as Dollar General DG, Ninety Nine Cents Stores NDN should continue to benefit as the economic recovery continues to have its ups and downs, and consumers need to stretch every penny, or in this case, dollar, they earn.