"The consumer is under pressure — burdened and concerned is the way we sort of characterize the consumer right now," Dollar Tree CEO Bob Sasser said in a conference call with investors. "At Dollar Tree, we think of ourselves as part of the solution ... and a destination for a cash-strapped customer that's trying to balance their budget."
The Chesapeake, Va.-based company posted earnings of $228.6 million, or $1.01 per share, for the period ended Feb. 2, up from $187.9 million, or 80 cents per share, the year before.
Revenue increased more than 15 percent to $2.25 billion as customers bought more, on average, per visit and traffic grew. The company said it expanded its assortment of candy, stationery, health and beauty care, household products, which were among the fastest-growing categories in the quarter.
Eoin Treacy's view On
seeing Target's positive results (see the item above this one), I took a broader
look at the discount sector. Dollar Tree Stores was the best performer on the
Nasdaq today following its impressive earnings. This is a further indication
of how well the discount sector has been outperforming in the USA over the last
number of years.
Dollar Tree Stores hit a new medium-term peak in June and pulled back sharply to range mostly above $40 from October. It surged out of this congestion area today and a sustained move below $40 is now required to question potential for some additional higher to lateral ranging. (Also see Comment of the Day on June 28th). Dollar General Stores has a similar pattern but has not rallied to the same extent today.
Wal-Mart is an S&P500 Dividend Aristocrat yielding 2.64% and broke out of a 12-year range in June. It has been consolidating in the region of the previous peak and the 200-day MA since October and a sustained move below $67 would be required to question medium-term scope for additional upside.
Costco has been trending consistently higher since early 2009 but is currently reverting towards the mean, represented by the 200-day MA. A sustained move below $90 would be required to question medium-term upside potential.
Five Below was listed on the Nasdaq in July and posted a new high today. A sustained move below $36 would be required to question medium-term scope for additional upside.