Discount retailer Dollar Tree (NASDAQ:DLTR) slid in pre-market trading on Wednesday after the company reported diluted earnings of $0.97 per share in the third quarter, a decline of 19.2% year-over-year. This fell short of analysts’ estimates of $1.01 per share.
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The retailer generated net sales of $7.31 billion in Q3, up by 5.4% year-over-year with enterprise same-store net sales increasing by 3.9%. This was again below Street estimates of $7.4 billion.
Looking forward, management updated its FY23 outlook and now expects revenues in the range of $30.5 billion to $30.7 billion. Moreover, DLTR expects a mid-single-digit increase in comparable store sales. Diluted earnings are expected to be between $5.81 and $6.01 per share, which includes a “$0.12 charge for the legal reserve taken in the first quarter and the impact of the 53rd week in fiscal 2023.”
For the fourth quarter, Dollar Tree projects its net sales to be between $8.6 billion and
$8.8 billion, while diluted earnings are estimated to be in the range of $2.58 to $2.78 per share.
Is Dollar Tree a Buy Now?
Analysts remain cautiously optimistic about DLTR stock, with a Moderate Buy consensus rating based on nine Buys, one Hold and one Sell. DLTR stock has slid by more than 15% in the past year, and the average DLTR price target of $142.09 implies an upside potential of 22.5% at current levels.
