Financial Report Preview | The Downgrading Consumption is Underway, Can Dollar Tree (DLTR.US) Achieve High Growth in Q4?

Dollar Tree (DLTR.US) is set to announce its fourth quarter performance for the fiscal year 2023 before the US stock market opens on March 13. According to Zacks statistics, the market generally expects Dollar Tree's Q4 revenue to be $8.7 billion, a 12.4% increase year-over-year, with earnings per share of $2.68, a 31.4% increase year-over-year. Performance Review In the previous quarter, Dollar Tree's net sales increased by 5.4% year-over-year, reaching $7.31 billion, while adjusted earnings per share decreased by 19% year-over-year to $0.97. Looking ahead to the fourth quarter, Dollar Tree expects sales to be between $8.6 billion and $8.8 billion, with earnings per share ranging between $2.58 and $2.78. Key Points For the fourth quarter, Dollar Tree expects low single-digit growth in same-store sales, with Dollar Tree retail stores projected to achieve mid-single-digit growth and Family Dollar expected to decline by 1% to grow by 1%. In the third quarter, the company saw a 3.9% increase in same-store sales, with Dollar Tree growing by 5.4% and Family Dollar by 2%. During the third quarter earnings call, the company stated that the anticipated contraction trend in the fourth quarter will continue to have a negative impact. The soft outlook for Family Dollar's same-store sales reflects the unfavorable macro environment for low-income families, sustained weakness in discretionary categories, and increased market promotional activities. Meanwhile, with a compelling value proposition and support for its multi-price strategy, Dollar Tree's banner is expected to remain strong. In the previous quarter, Dollar Tree benefited from an increase in foot traffic. The company continued to attract new customers and gained market share in sales and revenue. Additionally, a majority of new customers at the company's stores became repeat customers with varying income levels. Analysts expect Dollar Tree to potentially benefit in the fourth quarter from continued strong performance in essential consumables categories, while non-essential consumables may show weakness. The company may also benefit from its multi-price product assortment, expanding penetration of private label brands, and store renovations.