Dollar Tree, Inc. (DLTR) Might Be Wrong About Consumer Spending, Says Jim Cramer

Dollar Tree, Inc. (NASDAQ:DLTR) is one of the Jim Cramer Says US Has To Give Some Chips To China & Discusses These 10 Stocks.

Dollar Tree, Inc. (NASDAQ:DLTR) is one of the largest discount chain operators in America. Yet, despite the fact that it boasts lower prices, the firm’s shares have lost 8% over the past year. Dollar Tree, Inc. (NASDAQ:DLTR)’s shares sank by a whopping 33% in August and September last year after the firm’s Q2 earnings missed analyst estimates and it cut its full-year profit outlook to a midpoint of $5.40 per share over the previous forecast of $6.75 per share. Year-to-date though the stock has gained 29% on the back of strong earnings and the decision to sell a portion of its business. Cramer commented on how Dollar Tree, Inc. (NASDAQ:DLTR)’s comments of slowing consumer spending didn’t align with what he had heard elsewhere.

“I had a, this outfit called HundredX on last night, it was a terrific Goldman guy who’s left Goldman to do this. Robert Pace. The indications of spend for the consumer, it’s going up. I mean, nothing is as it seems. I mean his work is just superb and it just says, right now the consumer is actually looking to spend more, maybe much more.  That’s not what you get from Dollar Tree.”

In his previous remarks about Dollar Tree, Inc. (NASDAQ:DLTR), Cramer discussed the firm’s dependence on China:

“Hey man, these are so-called last resort retailers where you go when you have any trouble stretching your budget. They’re masters at finding low-price merchandise, but with the tariffs on China, previously low-cost merchandise, they gotta scramble to find the equivalent from countries that at this point might have more leverage than you’d expect. I mean, they never expected all these orders.

I think all three chains will have good quarters because they were able to bring in a lot of merchandise before the tariffs hit. It’s the guidance I’m worried about because the tariff regime means that either they need to raise prices substantially or accept a much lower level of profitability. Their stocks could be terrible. I wish they could be as adept as Costco, which reported this outstanding number.”

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Disclosure: None. This article is originally published at Insider Monkey.