Yahoo Finance Dollar Tree's (DLTR) Strategic Initiatives Appear Encouraging
Dollar Tree, Inc. DLTR has been benefiting from growth across segments, higher traffic trends and robust market share gains. The company has been making significant progress in optimizing its store portfolio through new store openings, renovations, re-banners and closings. In the latest development, management has announced that it has acquired designation rights for 170 leases of 99 Cents Only Stores across Arizona, California, Nevada and Texas.
The aforesaid deal was completed through two transactions in May, approved by the United States Bankruptcy Court for the District of Delaware. DLTR has also acquired the North American Intellectual Property of 99 Cents Only Stores and select on-site furniture, fixtures and equipment.
The California-based 99 Cents Only Stores filed for Chapter 11 bankruptcy in April and subsequently began the disposition of its assets, which include the inventory, owned real estate and store leases. Dollar Tree is likely to welcome customers from 99 Cents Only Stores as early as this fall.
What’s More?
Dollar Tree’s restructuring and expansion initiatives, which are evident from steady store openings and improvement of distribution centers, are likely to drive revenues. In fourth-quarter fiscal 2023, Dollar Tree opened 219 stores, re-bannered five and closed 72. It opened 146 Dollar Tree stores and 73 Family Dollar outlets. In the quarter, DLTR closed 13 Dollar Tree and 59 Family Dollar stores. As of Feb 3, 2024, DLTR operated 16,774 stores in 48 states and five Canadian provinces.
Dollar Tree, Inc. Price and Consensus
Dollar Tree, Inc. price-consensus-chart | Dollar Tree, Inc. Quote
In the fiscal fourth quarter, the company announced a comprehensive review of its Family Dollar portfolio to identify stores that are not aligned with its transformative vision for closure, relocation or re-bannering. As part of the review, it expects to close 600 Family Dollar stores in the first half of fiscal 2024. Additionally, it has identified provisions to close 370 Family Dollar and 30 Dollar Tree stores over the next several years, subject to the end of each store’s current lease term.
The company has been delivering compelling results from its Key Real Estate Initiatives, which include the expansion of its $3 and $5 plus assortment in Dollar Tree stores, as well as Combo Stores. We note that DLTR has completed the rollout of $3, $4 and $5 frozen and refrigerated items, which are currently available in more than 6,500 stores. The company now offers multi-price frozen products in three coolers within its usual 10 cooler bank.
Shares of this Zacks Rank #3 (Hold) company have risen 15.3% in the past three months compared with the industry’s 4.5% growth.
Key Picks
We have highlighted three better-ranked stocks, namely Abercrombie ANF, American Eagle AEO and Deckers DECK.
Abercrombie, a leading apparel retailer, currently sports a Zacks Rank #1 (Strong Buy). ANF delivered an earnings surprise of 180.9% in the trailing four quarters. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Abercrombie’s financial-year sales indicates growth of 1.7% from the year-ago reported figure.
American Eagle, a casual apparel retailer, currently carries a Zacks Rank #2 (Buy). AEO delivered an earnings surprise of 22% in the last reported quarter.
The consensus estimate for American Eagle’s current financial-year sales implies growth of 3.4% from the year-ago reported figure.
Deckers, a footwear and accessories dealer, currently carries a Zacks Rank of 2. DECK delivered an earnings surprise of 32.1% in the trailing four quarters.
The Zacks Consensus Estimate for Deckers’ current financial-year sales indicates growth of 15.8% from the year-ago reported figure.
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Dollar Tree, Inc. (DLTR) : Free Stock Analysis Report
Abercrombie & Fitch Company (ANF) : Free Stock Analysis Report
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Deckers Outdoor Corporation (DECK) : Free Stock Analysis Report
