Dollar Tree posted impressive second-quarter fiscal 2014 results as
its top and bottom lines improved year over year. We believe Dollar
Tree 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
toward incorporation of technological advances and acquisition of
Family Dollar, focused on boosting its top and bottom line in the
long run. However, we are slightly cautious over the company's
future results due to rising freight costs which is continuously
weighing on its gross margin performance. Moreover, the stock
remains vulnerable to sluggish economic recovery and cautious
consumer spending. Also, risks of sourcing merchandise from
overseas markets may drag the company's 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 $1.00. Its stores successfully operate in
major metropolitan areas, mid-sized cities and small towns and
perform well in the various locations. It offers a wide range of
quality everyday general merchandise in many categories, including
house wares, seasonal goods, candy and food, toys, health and
beauty care, gifts, party goods, stationery, books, personal
accessories, and other consumer items.
As of Aug 2, 2014, Dollar Tree operated a total number of 5,166
stores under the names of Dollar Tree, Deal$, Dollar Tree Deal$,
Dollar Tree Canada, Dollar Giant, and Dollar Bills. 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.
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