Yahoo Finance Dollar Tree (DLTR) to Report Q1 Earnings: Things to Note?
Dollar Tree, Inc. DLTR is likely to register top-line growth when it reports first-quarter fiscal 2023 results on May 25, before market open. The Zacks Consensus Estimate for revenues is pegged at $7.23 billion, indicating an improvement of 4.8% from the prior-year quarter’s reported figure.
The bottom line of the operator of discount variety retail stores is expected to have declined year over year. The Zacks Consensus Estimate for fiscal first-quarter earnings is pegged at $1.51 per share, suggesting a decline of 36.3% from the year-ago period’s reported figure. The consensus mark has been unchanged in the past 30 days.
The company has a trailing four-quarter earnings surprise of 6%, on average. In the last reported quarter, the Chesapeake, VA-based company outperformed the Zacks Consensus Estimate by 0.5%.
Dollar Tree, Inc. Price and EPS Surprise
Dollar Tree, Inc. price-eps-surprise | Dollar Tree, Inc. Quote
Factors to Consider
Dollar Tree’s first-quarter fiscal 2023 performance is likely to have gained from robust product demand, efforts to evolve assortments to drive the consumables category at Dollar Tree and initiatives to improve the value proposition at Family Dollar. Dollar Tree’s Key Real Estate Initiatives, including expansions of H2, Dollar Tree Plus! and Combo Stores, have been on track.
The company’s restructuring and expansion initiatives, including store openings and improvement of distribution centers, are likely to have boosted revenues in the to-be-reported quarter. Dollar Tree has been on track to leverage Family Dollar and Dollar Tree distribution center systems, and combined merchandise.
The company’s digital and omni-channel capabilities, and same-day delivery service with Instacart are also expected to have driven traffic trends in the fiscal first quarter. The aforementioned factors instill optimism regarding the upcoming results.
On the last reported quarter’s earnings call, the company was optimistic about its fiscal first-quarter top-line performance despite concerns regarding margins and the bottom line.
The company’s efforts to evolve the assortment to drive consumables’ performance at Dollar Tree and the initiatives to improve the value proposition at Family Dollar have been on track, which are likely to have aided the top line.
For first-quarter fiscal 2023, Dollar Tree expects consolidated net sales of $7.2-$7.4 billion, with enterprise same-store sales (comps) growth of mid-single digits. We expect comp growth of 4.3% for the fiscal first quarter. We anticipate comp growth of 2.5% for the Dollar Tree segment and 6% for the Family Dollar segment in the fiscal first quarter.
However, the company’s first-quarter fiscal 2023 bottom-line results are expected to reflect continued headwinds from inflationary pressures and an unfavorable product mix due to the demand shift toward low-margin consumable goods. These headwinds are expected to have offset growth in the gross margin in the to-be-reported quarter.
Despite the strong sales trends across both banners, Dollar Tree expects the increased demand for consumables and inflationary costs to affect margins and the bottom line in the near term. On the last reported quarter’s earnings call, management envisioned gross and operating margins to decline in the first half of fiscal 2023, followed by growth in the second half. For first-quarter fiscal 2023, EPS is estimated at $1.46-$1.56 for the fiscal first quarter.
Additionally, Dollar Tree has been witnessing higher SG&A expenses for the past several quarters, owing to elevated payroll, increased repairs and maintenance expenses, and store facility costs. These are also expected to have weighed on the fiscal first-quarter margin performance.
What the Zacks Model Unveils
Our proven does not conclusively predict an earnings beat for Dollar Tree this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Dollar Tree has a Zacks Rank #3 and an Earnings ESP of -0.21%.
Stocks With Favorable Combination
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:
American Eagle Outfitters AEO currently has an Earnings ESP of +9.81% and a Zacks Rank #3. The company is expected to register top and bottom-line growth when it reports first-quarter fiscal 2023 results. The Zacks Consensus Estimate for quarterly earnings per share of 17 cents suggests growth of 6.3% from the year-ago quarter’s reported figure.
You can see the complete list of today’s Zacks #1 Rank stocks here.
American Eagle’s top line is anticipated to rise year over year. The consensus mark for revenues is pegged at $1.06 billion, indicating an increase of 0.9% from the figure reported in the year-ago quarter.
Ulta Beauty ULTA currently has an Earnings ESP of +0.66% and a Zacks Rank of 3. The company is likely to register increases in the top and bottom lines when it reports first-quarter fiscal 2023 numbers. The consensus mark for ULTA’s quarterly earnings has moved up by a couple of cents in the past seven days to $6.81 per share. The consensus estimate suggests 8.1% growth from the year-ago quarter’s reported number.
The Zacks Consensus Estimate for Ulta Beauty’s quarterly revenues is pegged at $2.6 billion, which suggests an increase of 11.5% from the figure reported in the prior-year quarter.
Costco Wholesale COST currently has an Earnings ESP of +0.04% and a Zacks Rank of 3. The company is likely to register top and bottom-line growth when it reports third-quarter fiscal 2023 results. The consensus mark for COST’s quarterly revenues is pegged at $54.6 billion, which suggests a rise of 3.8% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Costco Wholesale’s earnings has moved down 1.2% to $3.32 per share in the past 30 days. The consensus estimate indicates 4.7% growth from the year-ago quarter’s reported figure.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Dollar Tree, Inc. (DLTR) : Free Stock Analysis Report
American Eagle Outfitters, Inc. (AEO) : Free Stock Analysis Report
Costco Wholesale Corporation (COST) : Free Stock Analysis Report
Ulta Beauty Inc. (ULTA) : Free Stock Analysis Report
