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Shares of Dollar Tree Inc. (NASDAQ: DLTR ) was down more than 2% on Thursday. The stock has fallen 6% over the past three months. The discount retailer is scheduled to report its fourth quarter 2022 earnings results on Wednesday, March 1st. Here’s what to expect from the earnings report:
results
Dollar Tree has guided for consolidated net sales of $7.54-7.68 billion for the fourth quarter of 2022. Analysts project sales of $7.6 billion for Q4. This compares to net sales of $7.08 billion reported in Q4 2021. In Q3 2022, consolidated net sales increased 8% year over year to $6.94 billion.
earnings
The consensus target is for EPS of $2.02 in Q4 2022, which compares to EPS of $2.01 reported in Q4 2021. In Q3 2022, EPS is up 25% YoY to $1.20.
Points to note
In an inflationary environment, people tend to go to discount stores in search of better value. This trend has benefited Dollar Tree and is likely to continue in the fourth quarter. In the third quarter, same-store sales rose 6.5%. Dollar Tree and Family Dollar segments recorded same-store sales growth in Q3. Dollar Tree has forecast a single- to high-single-digit increase in same-store sales in Q4.
In Q3, Dollar Tree saw more demand for the consumables category than discretionary. This shift has weighed on margins and has predicted that this trend will continue in the fourth quarter. The company also continues to face inflationary pressures in some cost categories such as utilities as well as higher costs for store improvements and store salaries.
In January, Dollar Tree appointed Rick Dreiling as its new CEO, replacing Mike Witynski. This marks a new direction for the company and the new strategy updates and changes for FY2023 will be important points to watch out for.
Also read: Dollar Tree (DLTR) vs. Dollar General (DG): How did the third quarter fare for the discount retailer?
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