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Why Is Dollar Tree Up 4% Since Last Earnings Report?
A month has gone by since the last earnings report for Dollar Tree (NASDAQ: DLTR). Shares have added about 4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Dollar Tree due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Dollar Tree's Q4 Earnings Miss, Family Dollar Comps Soft
Dollar Tree has reported fourth-quarter fiscal 2023 results, wherein earnings and sales missed the Zacks Consensus Estimate. The top line declined year over year, while earnings improved. The company's results have benefited from gains across both segments, higher traffic and robust market share growth. However, product cost inflation, an unfavorable sales mix and elevated shrink continued to hurt.
Dollar Tree's earnings increased 25% year over year to $2.55 per share. However, earnings missed the Zacks Consensus Estimate of $2.67. Earnings included costs primarily related to general liability claims of 17 cents per share.
Consolidated net sales declined 11.9% year over year to $8,639.9 million and missed the Zacks Consensus Estimate of $8,673 million. Enterprise same-store sales (comps) improved 3% year over year. The company's comps benefited from a 4.6% rise in traffic, partly negated by a 1.5% decline in average ticket.
Quarter in Detail
For the Dollar Tree banner, comps improved 6.3%, while the same for the Family Dollar banner declined 1.2%. The Dollar Tree segment benefited from a 7.1% increase in traffic, which was somewhat offset by a 0.7% decline in average ticket. Comps at Family Dollar were aided by a 0.7% increase in traffic, offset by a 2% decline in average ticket.
We anticipated enterprise comps to increase 2.7% in the fiscal fourth quarter. Our model predicted comps growth of 5.7% for the Dollar Tree banner and a 1% comps decline for Family Dollar.
The adjusted gross profit rose 19.8% year over year to $2.86 billion, whereas ...