Dollar Tree, Inc.
) - a leading discount variety store that sells products for $1.0
or less -is likely to beat the expectations while reporting its
fiscal 2012 fourth-quarter results on Feb 27.
Why a Likely Positive Surprise?
Our proven model shows that Dollar Tree may beat the earnings
as it has the right combination of 2 key components - Positive
Earnings ESP (Read:
Zacks Earnings ESP: A Better Method
) and a Zacks Rank #3.
Dollar Tree currently has an Earnings ESP of +1.01% since its
Most Accurate Estimate stands at $1.00, while the Zacks Consensus
Estimate is pegged at 99 cents.
Zacks #3 Rank (Hold):
Stocks with Zacks Rank #1, #2 and #3 have significantly higher
chances of beating the earnings. The sell-rated stocks (#4 and
#5) should never be considered going into an earnings
The combination of Dollar Tree's Zacks Rank and Earnings ESP
makes us confident regarding a positive earnings beat by the
company on Feb 27.
What is Driving the Better-than-Expected Earnings?
Dollar Tree is considered as one of the best-positioned dollar
store concepts, especially with its evolving multi-price point
chain. We believe that the company is doing a commendable job
internally by managing controllable inputs, including reducing
stem miles, while increasing back-haul opportunities.
The company continues to generate robust same-store sales
growth, driven by its focus on low-priced commodities that cater
to the wants and needs of consumers. This in turn boosts the
company's consumer traffic, reflecting continued top-line
The company has met as well as surpassed the Zacks Consensus
Estimate in trailing 4 quarters with an average surprise of
Other Stocks to Consider
Dollar Tree is not the only firm we are looking up to this
earnings season. Following companies, which are Dollar Tree's
industry peers, are also likely to beat the earnings in the
) has Earnings ESP of +233.33% and carries a Zacks Rank #2
) with Earnings ESP of +1.89% and Zacks Rank #2 (Buy).
) with Earnings ESP of +1.27% and a Zacks Rank #3 (Hold).
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