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Research Alert: Dltr: Apr-q Beat, Though Traffic Declined; Fy 27 Outlook Raised

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CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:

Dollar Tree reported a solid Apr-Q beat with adj-EPS of $1.74 (+38% Y/Y) topping the $1.54 consensus, due to better-than-expected gross margin expansion of 130 bps to 36.9%. Revenue rose 7% to $4,976M, roughly $12M above consensus, with comparable sales up 3.5% versus the 3.3% consensus estimate. The multi-price rollout, now in ~5,900 stores after ~630 Q1 additions, continues lifting average basket (+4.5%) but appears to weigh on traffic, which fell 1.0% (negative for the third consecutive quarter). DLTR raised FY 27 adj-EPS guidance to $6.70-$7.10, up $0.20 at the midpoint, and Jul-Q EPS to $1.10-$1.15 vs. the $0.99 consensus. We view the guidance raise positively, particularly against weakening consumer sentiment and likely freight headwinds from rising diesel prices. However, we remain skeptical on growth sustainability given persistent traffic declines and questions surrounding the multi-price rollout's impact on the company's value proposition and long-term growth algorithm.

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