Dollar Tree Reaffirms FY25 View, Strategic Initiatives Seem Encouraging

Dollar Tree, Inc. DLTR continues to implement strategic initiatives aimed at elevating customers’ shopping experience and driving overall growth.

The company is focused on its operational strategy while highlighting financial guidance at its 2025 Investor Day. This will involve discussions about its products, customers, stores, supply chain and workforce, as well as a vision for growth at Dollar Tree as a standalone banner. Let’s discover more.

More on DLTR’s Latest Announcement

At the event, the executive team’s presentations will include aspects like developing a more relevant assortment, a new era for the company, establishing a highly-connected customer store experience, evolving the supply chain and delivering disciplined growth and returns.

The session will also feature the company’s three-year financial view, generating 12-15% compounded annual growth rate in earnings per share (EPS) for fiscal years 2026-2028. This is based on an underlying yearly EPS growth rate of 8-10%, bolstered by the elimination of discrete cost items associated with the tariff mitigation, multi-price store conversions, lost distribution capacity and the divestiture of Family Dollar. 

For fiscal 2026, EPS is likely to grow by a high-teens percentage, thanks to the timing of some discrete cost benefits. For the third-quarter-to-date, comparable same-store sales (comps) grew 3.8% and DLTR bought back 2.8 million shares for $271 million. Dollar Tree has reaffirmed its third-quarter and fiscal 2025 guidance, issued on Sept. 3. 

For fiscal 2025, it continues to project net sales from continuing operations of $19.3-$19.5 billion, supported by comps growth of 4-6%. Adjusted EPS from continuing operations was then projected to be $5.32-$5.72, including the year-to-date share repurchase impacts. For the third quarter of fiscal 2025, Dollar Tree had  envisioned adjusted EPS being similar to the third quarter of fiscal 2024. Management cited that the company’s EPS view for the third quarter and the current fiscal year has not been adjusted for gains from third-quarter share repurchases. 

Dollar Tree’s progress on optimizing its store portfolio through store openings, renovations, re-banners and closings bodes well. It is benefiting from higher traffic trends and market share gains. The company has unveiled its new partnership with Uber Eats, highlighting a strategic move in meeting customers’ needs and facilitating the way they want to shop. This collaboration provides access to Uber Eats' 25 million customers, which is a newer demographic that the company has yet to completely tap into. In addition, the company is executing on growth, productivity and cost control. Shares of this current Zacks Rank #2 (Buy) company have gained 21.3% in the past six months compared with the industry’s growth of 2%.

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This article originally published on Zacks Investment Research (zacks.com).

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