What Happened?
Shares of discount treasure-hunt retailer Dollar Tree (NASDAQ:DLTR) fell 6.8% in the afternoon session after the company reported mixed first-quarter 2025 results as its full-year revenue guidance slightly missed.
On the other hand, Dollar Tree provided optimistic revenue guidance for next quarter, which blew past analysts' expectations. Its full-year EPS guidance also exceeded Wall Street's estimates.
Overall, we think this was a decent quarter with some key metrics above expectations. Investors were likely hoping for more, and shares traded down. As a reminder, DLTR has agreed to sell the Family Dollar business to Brigade and Macellum for roughly $1 billion.
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What The Market Is Telling Us
Dollar Tree’s shares are quite volatile and have had 17 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 9 months ago when the stock dropped 20.4% on the news that the company reported weak second-quarter 2024 earnings. Its revenue and EPS missed analysts' expectations, and it lowered its full-year revenue guidance. The company noted that the unfavorable macro environment was impacting the purchasing behavior of middle- and higher-income customers and this played a role in the decision to revise the financial forecasts. Overall, this was a weaker quarter.
Dollar Tree is up 17.8% since the beginning of the year, but at $90.10 per share, it is still trading 25.1% below its 52-week high of $120.30 from June 2024. Investors who bought $1,000 worth of Dollar Tree’s shares 5 years ago would now be looking at an investment worth $966.12.
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