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Dollar Tree shares up 5% on Q4 earnings revenue beat

The discount retailer's stock rises after a positive Q4 earnings report.

Dollar Tree share price was high after its stock rose by 5%. The discount store’s fourth quarter(Q4) results beat Wall Street expectations.

Dollar Tree results: key figures

Earnings per share $1.93
Revenue $6.21 billion
Net loss $2.31 billion
Same-store sales +2.4%

Dollar Tree share price is up 5% as earnings revenue beats estimates

Dollar Tree’s EPS of $1.93 slightly beat financial experts’ expectations of $1.92. Dollar Tree’s Q4 revenue of $6.21 billion exceeded predictions of $6.19 billion. Same-store sales jumped 2.4% as low-income shoppers hunted for bargains.

While Dollar Tree increased same-store sales, the chain suffered a net loss of $2.31 billion. Dollar Tree’s Q4 results were impacted by its ownership of another discount chain, Family Dollar. The retailer wrote down $2.73 billion of Family Dollar's value. Chief executive officer, (CEO), Greg Philbin, noted that Dollar Tree will close either re-brand or close the 390 struggling stores.

‘Approximately 200 Family Dollar stores will be re-bannered to Dollar Tree, and we plan to close as many as 390 Family Dollar stores this year,’ said Philbin.

Despite the closure of many of the Family Dollar stores, Philbin noted that the retailer had its strongest quarter as part of Dollar Tree’s Q4 results.

‘Our results demonstrate the increasing strength of the Dollar Tree brand, and accelerated progress on the Family Dollar turnaround, as Family Dollar delivered its strongest quarterly same-store sales growth of the year,’ said Philbin.

What do Dollar Tree’s Q4 results mean for their share price?

Dollar Tree’s Q4 results could mean an increase for Dollar Tree’s share price. The retailer’s stock has risen by as much as 5% after its earnings report.

How do Dollar Tree’s Q4 results compare to other retailers?

Dollar Tree’s Q4 results are positive compared to other chain stores, like Walmart. Walmart had a strong earnings report after better-than-expected sales over the holiday season.

What is Dollar Tree’s outlook for Q1?

Even though Dollar Tree Q4 results were positive, the company’s Q1 outlook is worse-than-expected. The corporation predicts Q1 EPS of $1.05-$1.15. That forecast is less than the expected $1.29 per share. The diminished forecast is based on a possible increase in US tariffs on Chinese goods sold in the stores if a trade deal isn’t reached.

Despite the weak guidance, Philbin predicts that discount retailer like Dollar Tree will increase its revenue in 2019.

‘We are confident we are taking the appropriate steps to reposition our Family Dollar brand for increasing profitability as business initiatives gain traction in the back half of fiscal 2019,’ said Philbin.

Discount stores a rare highlight of US retail

Dollar Tree’s Q4 revenue growth shows that low-income shoppers will always search for affordable items even during a time of economic growth, according to Mickey Chadha, an analyst at Moody’s.

‘The dollar store sector will remain one of the bright spots in retail’, said Chadha.

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