Dollar Tree stock could be considered a promising asset to invest in during a recession. The company specializes in discount sales, which is a promising business at a time when consumers are looking for affordable products. How profitable to buy DLTR stock now, you will know by studying the retailer's financial results and reading analysts' forecasts on the movement of quotations in the near future.
Dollar Tree is an American chain of retail stores located throughout the United States. It is headquartered in Chesapeake, Virginia. The company is widely known for its affordable prices and convenient store locations. In 2018, Forbes named Dollar Tree the twenty-third most valuable brand in the United States with a brand value of $6.6 billion. Dollar Tree was also recognized as one of America's most generous companies. In 2019, Dollar Tree was ranked twelfth on Forbes' list of the most generous companies in the U.S. with a total of $212 million in charitable donations.
Dollar Tree stock is publicly traded on the Nasdaq Stock Exchange under the ticker symbol DLTR. The corporation's IPO was held in March 1995. Dollar Tree stock can now be purchased on the stock exchange or through an online broker. This asset can be used for both long-term and short-term investing depending on its price outlook and your strategy.
Dollar Tree offers both online and in-store shopping. In addition to Dollar Tree's main stores, the company also operates Family Dollar and Dollar Giant stores. The company specializes in selling a variety of items for as little as one dollar, although the company has recently raised the pricei on many categories of items. Family Dollar stores range in price from $1 to $10.
At the chain's stores, you can find different types of items: office supplies, toys, beauty products, housewares and more. Customers also have access to classic items that are sold in regular supermarkets. At Dollar Tree, you can buy household chemicals, personal care products, cosmetics and other products at discounted prices. The Family Dollar division also sells electronics, clothing, and miscellaneous home goods.
Financial regulators who track inflation reported that prices for many items did not stop rising in August. For example, the cost of many food items increased about 13% year-over-year. Demand for many categories of goods may be declining as prices rise. In the fall of 2022, the corporation provided revenue projections for the fiscal year. The figure is expected to be $27.85-28.10 billion. Earlier the retailer projected revenue of $28.16 billion.
Decrease in expected profit figures in the forecast for 2022, the corporation's management explains by the fact that can not pass all the costs on to customers by sharply increasing prices for goods in stores of the network. An additional factor in making this decision was an increase in consumer purchases of low-margin "consumables based on need." This entailed a decline in business profitability. The Dollar Tree brand has followed a marketing strategy that limits the cost of most of the products it sells to $1.25.
Dollar Tree's revenue for the fourth quarter of fiscal 2021 was $6.82 billion, up $1.29 billion, or 23.4%, from $5.53 billion for the fourth quarter of fiscal 2020. Dollar Tree's net income for the fourth quarter of fiscal 2021 was $1.01 billion, or 131.8%, up from net income of $474.6 million for the fourth quarter of fiscal 2020.
Same-store sales were up about 11% in the first quarter of fiscal 2022. That figure might have been expected to be higher when you consider that the retailer raised prices on many products by 25%. In the Family Dollar division, sales were down 2.8% in the first quarter. One of the factors influencing this result was the closure of some stores. The corporation's management noted that in Q1 2022 store traffic decreased by 3.6%. Analysts attribute this picture to higher prices for most products.
At the time of the technical analysis on Dollar Tree's stock price in November, the value of this asset was $152. Analysts believe that the retailer's stock price may not be at its highest level in 2023 because of actively rising inflation. Pessimistic forecasts put Dollar Tree's stock price at $160 for the year. By 2025, quotes could reach the $200 mark.
In March 2020, Dollar Tree stock was trading at $72. After the coronavirus pandemic began, the asset began to appreciate in value. By the end of the year, Dollar Tree stock surpassed the $100 mark.
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During the year from November 2021 to November 2022, Dollar Tree stock went from $109 to $152.
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The retailer's competitors include retail giants such as Dollar General, Walmart, Target. Shares of these companies can also be chosen for investment.
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