A look at Dollar Tree’s stock market performance this year
Dollar Tree’s (DLTR) stock surged 2.4% on November 21, as the company reported better-than-expected sales comps, total sales, and earnings. The company also raised guidance for the full fiscal year. DLTR touched its 52-week high price of $100.54 on November 21 and finally settled at $99.46. The company now sits at YTD (year to date) profit of 29%.
DLTR remains unaffected by Walmart and Amazon
The company seems to have swiftly overcome the Walmart (WMT) and Amazon (AMZN) threats for the time being. A report from Gordon Haskett Research Advisors, dated October 16, claimed that Walmart is currently the cheapest retailer, cheaper to discount stores Dollar Tree and Dollar General.
However, Dollar Tree’s current quarter results, as well as its stock market performance, suggest that the company has remained unfazed by Walmart’s price cuts as well as Amazon’s entry into the retail food space.
Goldman Sachs analyst Christopher Prykull had named Dollar Tree as his top pick in the food retail sector last week, calling it relatively immune” to the Amazon threat.
“Convenient locations, a lower-income demographic, value price points, and destination for ‘fill-in’ trips as opposed to ‘stock-up’ trips makes Dollar Tree more immune to potential online encroachment,” noted Prykull.
Investors looking for exposure to Dollar Tree through ETFs can consider the iShares Morningstar Mid-Cap Growth ETF (JKH), which invests 1.23% of its total holdings in the company.
How have competitor stocks performed?
Competitor Dollar General (DG) has also delivered high stock market returns this year. The discount retailer has gained 17% to date.
However, supermarkets Kroger (KR) and Supervalu (SVU) have been badly hit by the rising competition in the retail food space. The companies are trading at YTD losses of 34% and 51% respectively. Walmart, on the other hand, has gained ~40% so far, this year.
Move on to the next section to read about recent analyst actions on DLTR.