What to look for when Dollar Tree (DLTR) reports Q3 2024 earnings

Shares of Dollar Tree, Inc. (NASDAQ: DLTR) rose over 5% on Monday. The stock has dropped 27% over the past three months. The discount store chain is scheduled to report its earnings results for the third quarter of 2024 on Wednesday, December 4, before market open. Here’s a look at what to expect from the earnings report:

Revenue

Dollar Tree has guided for consolidated net sales of $7.4-7.6 billion for Q3 2024. Analysts are projecting revenue of $7.44 billion for the quarter. This compares to sales of $7.31 billion reported in the third quarter of 2023. In the second quarter of 2024, net sales inched up less than 1% year-over-year to $7.37 billion.

Earnings

DLTR has guided for adjusted earnings per share to range between $1.05-1.15 in Q3 2024. Analysts are predicting EPS of $1.08 for the period. This compares to EPS of $0.97 reported in the year-ago quarter. In Q2 2024, adjusted EPS fell 26% YoY to $0.67.

Points to note

Dollar Tree expects Q3 2024 comparable store sales to grow in the low-single-digits for both the enterprise and its two segments. In an update earlier this month, the company stated that same-store sales tracked well through the quarter. In Q2, enterprise same-store sales grew 0.7%. Same-store sales increased 1.3% for the Dollar Tree segment but fell 0.1% for the Family Dollar segment.

Last quarter, Dollar Tree benefited from growth in traffic across both its segments as customers continued to search for value in an inflationary environment. However, these gains were partly offset by declines in average ticket. The demand in the consumables category was higher than the discretionary category but the company anticipates an improvement in its discretionary mix during the second half of the year with the arrival of seasonal items. This may have benefited Q3 results.

DLTR can be expected to benefit from its multi-price assortment, which is projected to be a major growth driver over the long term. The arrival of more multi-price offerings in the discretionary category during the latter half of the year can be expected to boost results.