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Dollar Tree versus Dollar General: Stock Price Movement

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Dollar store’s stock market performance

Impressive top-line growth and improving profitability drove the stock prices of Dollar General (DG) and Dollar Tree (DLTR) in 2017. While DG gained 26%, Dollar Tree soared even higher, gaining 39% during the year.

However, 2018 hasn’t been kind enough to either dollar store. Dollar Tree stock is down ~24% YTD (year-to-date), thanks to two quarters of missed expectations.

DLTR fell 14.5% a day after the fourth-quarter results were reported in March. It took a further hit after first-quarter results on May 31. The stock was once again down 14%. The company is currently trading $82.63, ~42% below its 52-week high.

Dollar General, on the other hand, has still managed to be in the green. The stock is up ~1% YTD despite the post-results 9% fall on May 31. It’s trading at $94.90, ~12% below its 52-week high price.

So, are Dollar Tree and Dollar General at a good entry point right now? To better answer this question, let’s discuss their valuations in the next part of this series. First, let’s see how other retailers have done so far.

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How have other retailers performed this year?

Several other retailers, including supermarkets and mass-merchants, are also in the red this year. Supermarket giant Kroger (KR) and retailing juggernaut Walmart (WMT) are down 9% and 14% so far. However, Costco (COST) and Target (TGT) have been strong and gained 8.8% and 20% YTD.

The S&P 500 Food and Staples Index is in the red and has fallen 5.8% YTD. It has underperformed the S&P 500 Index, which is up 3.6% YTD.

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