Dollar Tree Posts Strong Same-Store Sales Growth, Customers Are Buying More Frequently, Analysts Say

Shares of Dollar Tree Inc. DLTR rallied on Thursday after the company reported upbeat same-store sales on Wednesday.

The announcement came amid an exciting earnings season. Here are some key analyst takeaways.

JPMorgan On Dollar Tree

Analyst Matthew Boss upgraded the rating from Neutral to Overweight and raised the price target from $72 to $111.

Dollar Tree reported same-store-sales growth of 5.4%, topping consensus of 4.1%, with both ticket and traffic strength, Boss said in the upgrade note. Traffic growth of 2.5% included a meaningfully higher number of consumers with a household income of more than $100,000 as well as a 9% year-on-year increase in higher-purchase-frequency customers, he added.

Ticket comp growth of +2.8% was "supported by multi-price-point & favorable seasonal/ discretionary category demand," the analyst wrote. Management indicated that the company's same-store-sales growth in the second quarter could be at the high end of the full-year guidance range of 3% to 5%, he further stated.

Check out other analyst stock ratings.

Telsey Advisory Group On Dollar Tree

Analyst Joseph Feldman maintained a Market Perform rating, while taking the price target higher from $95 to $100.

Although Dollar Tree's transformation continues, the company still faces earnings volatility, Feldman said. The company reported first-quarter adjusted earnings of $1.26 per share, surpassing consensus of $1.21 per share, "driven by a strong comp of 5.4%," significantly higher than consensus of 3.9%, he added.

The company achieved positive comp in both the consumables and discretionary segments, the analyst stated. "Importantly, the number of customers who visit Dollar Tree stores three or more times a month increased 9%—a measure of high loyalty," he further wrote.

Guggenheim Securities On Dollar Tree

Analyst John Heinbockel reiterated a Buy rating and price target of $100.

Dollar Tree's operating results were broadly in line with expectations, Heinbockel said. He added, however, that investors were surprised by the company guiding to an earnings decline for the second quarter of as much as 45%-50% "on one-time tariff-related COGS and labor expense pressure."

The COGS impact resulted from "the 145%-tariffed product making its way into the system," which is something the company cannot mitigate in the short term, the analyst stated. Moreover, the product had to be re-priced at the store level, instead of at factories, which added to the costs, he explained.

DLTR Price Action: Shares of Dollar Tree had risen by 8.4% to $96.08 at the time of publication on Thursday.

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