Dollar Tree Inc. (DLTR): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report
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 centers.
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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