What To Expect From Dollar Tree’s (DLTR) Q2 Earnings

Max Juang /
2023/08/23 11:41 am EDT

Discount treasure-hunt retailer Dollar Tree (NASDAQ:DLTR) will be announcing earnings results tomorrow before market hours. Here's what investors should know.

Last quarter Dollar Tree reported revenues of $7.32 billion, up 6.1% year on year, in line with analyst expectations. It was a weak quarter for the company, with a miss of analysts' EPS estimates and revenue guidance for the next quarter below expectations. 

Is Dollar Tree buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Dollar Tree's revenue to grow 6.45% year on year to $7.21 billion, in line with the 6.7% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.87 per share.

Dollar Tree Total Revenue

The analysts covering the company have been growing increasingly bullish about the business heading into the earnings, with revenue estimates seeing five upwards revisions over the last thirty days. The company missed Wall St's revenue estimates four times over the last two years.

Looking at Dollar Tree's peers in the non-discretionary retail segment, some of them have already reported Q2 earnings results, giving us a hint of what we can expect. Sprouts delivered top-line growth of 6.06% year on year, beating analyst estimates by 0.29%, and Target reported revenue decline of 4.85% year on year, missing analyst estimates by 1.82%. Sprouts traded up 1.99% on the results, Target was up 8.84%.

Read our full analysis of Sprouts's results here and Target's results here.

Tech stocks have been under pressure since the end of last year and while some of the non-discretionary retail stocks have fared somewhat better, they have not been spared, with share price declining 6.06% over the last month. Dollar Tree is down 7.13% during the same time, and is heading into the earnings with an analyst price target of $155.9, compared to share price of $140.79.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.