Consumers are navigating a landscape of shifting retail dynamics as discount giants face mounting pressure to deliver consistent growth. At its Investor Day, Dollar Tree Inc. (NASDAQ:DLTR) indicated that comparable sales were tracking at 3.8% quarter-to-date, while traffic remained approximately flat, according to BofA Securities.
- DLTR is under selling pressure. Stay ahead of the curve here.
BofA analyst Robert Ohmes maintained an Underperform rating and price target of $75.
The Dollar Tree Thesis: The company reaffirmed its fiscal 2026 guidance for comps of 4%-6% and adjusted earnings of $5.32-$5.72 per share, Ohmes said in the note.
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Dollar Tree indicated that its comps in the third quarter are tracking at 3.8%, significantly lower than the previous quarter's 6.5%, he stated. The analyst added, however, that the final weeks of the quarter "could come in stronger given higher Halloween/seasonal penetration."
Ohmes expressed concern around expense pressures on Dollar Tree from "increased store complexity and potential competitive response risks," as the company expands into higher price point consumable/discretionary items.
DLTR Price Action: Dollar shares were down 2.69% at $93.39 at the time of publication on Thursday. The stock is trading within its 52-week range of $60.49 to $118.06, reflecting a significant pullback from its recent highs.
Despite this decline, Dollar Tree has shown resilience with a year-to-date performance of 22.1%, indicating strong underlying demand and investor interest over the past months.
From a technical perspective, the stock is currently trading 8.2% below its 50-day moving average of $101.76, which suggests a bearish short-term trend. Conversely, it is positioned 5.5% above its 200-day moving average of $88.54, indicating a longer-term bullish sentiment.
This divergence between the short-term and long-term moving averages could signal potential volatility as the stock seeks to find its footing.
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