What to expect when Dollar Tree (DLTR) reports Q2 2023 earnings

Shares of Greenback Tree, Inc. (NASDAQ: DLTR) had been down 1% on Monday. The inventory has dropped 11% over the previous three months. The low cost retailer is slated to report its earnings outcomes for the second quarter of 2023 on Thursday, August 24, earlier than market open. Right here’s a have a look at what to anticipate from the earnings report:

Income

Greenback Tree has guided for internet gross sales of $7.0-7.2 billion for the second quarter of 2023. Analysts are projecting income of $7.18 billion for Q2, which might characterize a 6% progress from the identical interval final 12 months. Within the first quarter of 2023, consolidated internet gross sales elevated 6.1% year-over-year to $7.32 billion.

Earnings

Greenback Tree expects EPS to vary between $0.79-0.89 in Q2 2023. Analysts are predicting EPS of $0.87 for the second quarter, which compares to $1.60 reported within the year-ago interval. In Q1 2023, adjusted EPS fell 38% YoY to $1.47.

Factors to notice

Greenback Tree has guided for a mid-single-digit enhance in same-store gross sales for the enterprise, in addition to for its Greenback Tree and Household Greenback divisions. In Q1, enterprise same-store gross sales elevated 4.8%. Identical-store gross sales on the Greenback Tree and Household Greenback segments rose 3.4% and 6.6% respectively, pushed by larger visitors.  

The corporate could be anticipated to profit from its potential to supply cost-conscious clients with worth by its vast and inexpensive product assortment. Prospects are spending extra on consumables, driving progress in that class, which is benefiting the highest line. Nevertheless, the discretionary class is prone to face strain.

The combination shift in the direction of consumables has been impacting margins. This will likely have continued into the second quarter. The corporate believes client procuring conduct will normalize over time, which can carry a couple of restoration in margins. Greater ranges of shrink are additionally anticipated to take a toll on margin efficiency.