Dollar Tree Reports Unexpectedly Low Non-GAAP EPS Despite Beating Revenue Expectations by $60M
June 24, 2023
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The lower than expected EPS was primarily due to the appreciation of the U.S. Dollar, which had a significant negative impact on the company’s gross margin. Furthermore, the company has also been investing in its technological infrastructure and new e-commerce capabilities, which will enable it to provide better customer service and a more convenient shopping experience. Overall, Dollar Tree ($NASDAQ:DLTR)’s results demonstrate that its core business is performing well, despite some headwinds from currency fluctuations. Going forward, the company will continue to focus on its expansion plans and initiatives to improve customer service through technological advancements.
Earnings
In its latest earning report of FY2023 Q4 ending January 31 2023, DOLLAR TREE posted better-than-expected revenue of $7720.7M USD while falling short of earnings expectations. It earned $452.2M USD in net income, a decrease of 0.4% from the previous year. The total revenue has increased by 9.0% in the past three years, from $6767.9M USD to $7720.7M USD. Despite the unexpectedly low non-GAAP EPS, DOLLAR TREE’s strong revenue beat expectations by $60M USD.
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Dollar Tree. More…
| Total Revenues | Net Income | Net Margin |
| 28.75k | 1.38k | 4.8% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Dollar Tree. More…
| Operations | Investing | Financing |
| 1.83k | -1.35k | -805.3 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Dollar Tree. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 23.11k | 14.21k | 40.23 |
Key Ratios Snapshot
Some of the financial key ratios for Dollar Tree are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 6.1% | 7.4% | 6.7% |
| FCF Margin | ROE | ROA |
| 1.7% | 13.6% | 5.2% |
Stock Price
The stock opened at $134.7 and closed at $136.7, plunging by 12.0% from the previous closing price of 155.4. The lower-than-expected non-GAAP EPS could be attributed to higher operating expenses as a result of implementing cost saving initiatives, as well as increased competition. Additionally, the continuing pandemic has had a negative impact on the company’s overall performance. However, the positive revenue surprise and the impact from the store openings in the fourth quarter could be behind the stock’s boost in the last hour of trading. Live Quote…
Analysis
At GoodWhale, we recently conducted an analysis of DOLLAR TREE‘s wellbeing. Our Risk Rating provides insights into the financial and business health of the company. According to our findings, DOLLAR TREE is a medium risk investment. We have detected one risk warning in their balance sheet, which can be accessed by becoming a registered user. We believe our analysis provides valuable insight into the company’s health. It can be used to make informed decisions when investing in DOLLAR TREE. More…
Peers
The company offers a variety of merchandise at a single price point of $1.00. Dollar Tree Inc competes with other discount retailers such as Dollar General Corp, Target Corp, and Seria Co Ltd.
– Dollar General Corp ($NYSE:DG)
Dollar General Corporation is an American chain of variety stores headquartered in Goodlettsville, Tennessee. As of July 2020, Dollar General operated 16,320 stores in the continental United States. The company first began as a family-owned business in 1939. Today, Dollar General is one of the largest discount retailers in the United States. The company’s mission is to provide customers with “high-quality, low-cost products and services in a convenient location and friendly manner.”
– Target Corp ($NYSE:TGT)
Target Corp is an American retail corporation that operates Target stores, a chain of hypermarkets. As of 2022, it has a market cap of 75.6B and a ROE of 34.09%. The company was founded in 1902 and is headquartered in Minneapolis, Minnesota. Target stores are located in the United States, Canada, and India.
– Seria Co Ltd ($TSE:2782)
Seria Co Ltd is a Japanese conglomerate with a market cap of 182.98B as of 2022. The company has a diversified business portfolio and has a strong presence in the Japanese economy. The company has a return on equity of 13.73%. The company has a strong financial position and is well-positioned to continue its growth in the future.
Summary
Dollar Tree has recently reported its Non-GAAP earnings of $1.47 per share, missing its analyst estimates by $0.07. However, its reported revenue of $7.33B beat the estimates by $60M. Upon announcement, its stock price moved downwards, suggesting that investors may not be optimistic about the company’s future outlook. Analysts that follow the company should continue to monitor Dollar Tree’s revenue and earnings reports for further insights into the company’s performance and potential.
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