Dollar Tree (NASDAQ:DLTR) plunged in pre-market trading after the company announced disappointing Q4 results. The off-price retailer reported adjusted diluted earnings of $2.55 per share as compared to $2.04 per share in the same period last year but still fell short of Street estimates of $2.66 per share.
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The company posted net sales of $8.63 billion, an increase of 11.9% year-over-year but fell short of consensus estimates of $8.67 billion. Dollar Tree’s enterprise comparable net sales increased by 3% in Q4.
In the fourth quarter, Dollar Tree began reviewing its store portfolio and as a part of this review, the company will close around 600 Family Dollar stores in the first half of this year. The company expects to close an additional 370 Family Dollar and 30 Dollar Tree stores over the next several years.
During the fourth quarter of 2023, DLTR faced $594.4 million in charges related to reviewing their store portfolio. Additionally, the company experienced a $1.07 billion goodwill impairment charge and a $950 million impairment charge on trade name intangible assets.
For the fiscal year 2024, the company expects adjusted earnings per share to range from $6.70 to $7.30 on net sales of $31 billion to $32 billion. In the first quarter, DLTR projects earnings between $1.33 and $1.48 per share on sales between $7.6 billion and $7.9 billion. Analysts had anticipated first-quarter earnings of $1.70 per share.
What is the Stock Price Forecast for DLTR?
Analysts remain cautiously optimistic about DLTR with a Moderate Buy consensus rating based on six Buys and three Holds. Over the past year, DLTR stock has gained by more than 5%, and the average DLTR price target of $159.75 implies an upside potential of 6.7% at current levels.
