What to Expect From Dollar Tree Earnings

Dollar Tree, Inc. (NASDAQ: DLTR) is set to report its fiscal third quarter financial results before the markets open on Tuesday. The consensus estimates from Thomson Reuters call for $0.53 in earnings per share (EPS) on $4.84 billion in revenue. The same period from the previous year had $0.69 in EPS on $2.10 billion in revenue.

This bargain retailer was hit hard in August and even mid-November, and at this point, investors might be thinking that could be construed as a compelling entry point. Dollar Tree is a leading operator of single-price point dollar stores under the Dollar Tree banner, along with multi-price points under the Deal$ banner, with over 5,000 locations in the United States and Canada. The company recently completed the purchase of competitor Family Dollar.

Many analysts like the acquisition and think that Family Dollar will become a much better operator and can close over time the sales productivity gap with Dollar General, the company’s closest competitor. They also like the company’s strong cash flow and solid balance sheet.

Considering many are expecting a rate hike from the Fed in December if not the near future, we might expect the markets to pull back a little. But if markets correct and people become more frugal, this could spell opportunity for dollar store retailers. Looking back to the financial crash in 2008, shares of Dollar Tree barely reacted.

Ahead of the earnings report a few analysts weighed in on Dollar Tree:

• MKM Partners reiterated a Buy rating with an $86 price target.
• Jefferies has a Hold rating with a $70 price target.
• Telsey Advisory Group reiterated a Market Perform rating.
• JPMorgan reiterated an Overweight rating with a $90 price target.
• Deutsche Bank lowered its price target to $67 from $73.
• Sterne Agee CRT reiterated a Buy rating.

So far in 2015, Dollar Tree is negative on the year with the stock down nearly 3% year to date. However over the past 52-weeks the stock is up about 4%.

Shares of Dollar Tree were last trading up 0.9% at $69.05, with a consensus analyst price target of $80.44 and a 52-week trading range of $60.31 to $84.22.