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Barclays: Dollar Tree Q1 An 'Anomaly'

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In a report published Friday, Barclays analysts maintained an Overweight rating on Dollar Tree, Inc (NASDAQ: DLTR), with a price target of $98.

Dollar Tree reported its 1Q15 adjusted EPS at $0.71, short of the consensus and Barclays estimates. The company, however, guided to robust trends. The lower-than-expected performance in the first quarter can be attributed to higher-than-expected pressure on the company's sales from port congestion at the West Coast.

"In addition to product unavailability, DLTR incurred incremental transportation and delivery costs, and higher labor expenses due to less fluid product flow," the analysts mentioned.

In the report Barclays noted, "1Q results were in line with its guidance despite these challenges. Merchandise flow through ports has now normalized, the competitive environment is stable, and DLTR's outlook for the remainder of 2015 is unchanged."

The company expects to close its deal with Family Dollar Stores, Inc (NYSE: FDO) in July. Dollar Tree intends to re-banner some FDO stores in a phased manner.

The company indicated that "different real estate decisions, a focus on EDLP and opening price points, and better merchandising" were critical to closing FDO's productivity gap with Dollar General Corp (NYSE: DG).

Latest Ratings for DLTR

DateFirmActionFromTo
Jan 2018OppenheimerInitiates Coverage OnOutperform
Jan 2018GuggenheimInitiates Coverage OnBuy
Dec 2017Moffett NathansonInitiates Coverage OnBuy

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Posted-In: BarclaysAnalyst Color Reiteration Analyst Ratings

 

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