Dollar Tree posted impressive results in third-quarter fiscal 2014
with both its top and bottom lines improving year over year and
beating the Zacks Consensus Estimate. We believe the company is
progressing well with its growth endeavors, including store
expansion, omni-channel development, revamping of store formats and
venture into new markets. We also commend its strategic investments
in technological advancements and acquisitions, such as the
proposed takeover of Family Dollar, focused on boosting its
performance in the long run. However, we are slightly cautious
about the company's future results as rising freight costs are
continuously weighing on its gross margin. Moreover, the stock
remains vulnerable to sluggish economic recovery and cautious
consumer spending. Risks of sourcing merchandise from overseas
markets may also drag its results going forward. Thus, we retain
our Neutral view on the stock.
Founded in 1986 and headquartered in Chesapeake, VA, Dollar Tree
Inc. is an operator of discount variety stores offering merchandise
at a fixed price point of $1.00. Its stores successfully operate in
major metropolitan areas, mid-sized cities and small towns and
perform well in the various locations. It offers a wide range of
quality everyday general merchandise in many categories, including
house wares, seasonal goods, candy and food, toys, health and
beauty care, gifts, party goods, stationery, books, personal
accessories, and other consumer items.
As of Nov 1, 2014, Dollar Tree operated 5,282 stores under the
names of Dollar Tree, Dollar Tree Canada and Deal$. The company's
stores are spread across the 48 U.S. states and the District of
Columbia as well as the Canadian provinces of British Columbia,
Ontario, Alberta, Saskatchewan and Manitoba. Its stores are
supported by a nationwide logistics network of ten distribution
Dollar Tree also owns an e-Commerce platform DollarTree.com
which sells its merchandise in bulk to individuals and small
businesses as well as organizations. Through its online platform,
the company advertises its in-store-events and showcases its
special and seasonal promotions for featured products.
Dollar Tree Inc. (DLTR): Read the Full Research
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