Dj Dollar Tree Inc. Stock Outperforms Competitors On Strong Trading Day

The most recent trading session ended with Dollar Tree (DLTR) standing at $61.21, reflecting a -0.33% shift from the previouse trading day's closing. The stock fell short of the S&P 500, which registered a gain of 0.1% for the day. At the same time, the Dow added 0.69%, and the tech-heavy Nasdaq gained 0.06%.

The discount retailer's shares have seen a decrease of 10.92% over the last month, not keeping up with the Retail-Wholesale sector's gain of 5.33% and the S&P 500's gain of 4.37%.

The upcoming earnings release of Dollar Tree will be of great interest to investors. It is anticipated that the company will report an EPS of $1.07, marking a 10.31% rise compared to the same quarter of the previous year. In the meantime, our current consensus estimate forecasts the revenue to be $7.45 billion, indicating a 1.91% growth compared to the corresponding quarter of the prior year.

DLTR's full-year Zacks Consensus Estimates are calling for earnings of $5.34 per share and revenue of $30.71 billion. These results would represent year-over-year changes of -9.34% and +0.35%, respectively.

It is also important to note the recent changes to analyst estimates for Dollar Tree. These latest adjustments often mirror the shifting dynamics of short-term business patterns. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.27% upward. Dollar Tree is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, Dollar Tree is currently trading at a Forward P/E ratio of 11.49. This valuation marks a discount compared to its industry's average Forward P/E of 20.11.

Investors should also note that DLTR has a PEG ratio of 2.59 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Retail - Discount Stores was holding an average PEG ratio of 2.33 at yesterday's closing price.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 33, finds itself in the top 14% echelons of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

Zacks Investment Research

Sally Beauty Holdings, Inc. SBH is likely to register growth in top and bottom lines when it reports fourth-quarter fiscal 2024 earnings on Nov. 14. The Zacks Consensus Estimate for revenues is pegged at $935.7 million, which indicates a 1.6% increase from the year-ago quarter. The consensus mark for quarterly earnings has remained unchanged in the past 30 days at 48 cents per share, indicating an increase of 14.3% from the year-ago quarter’s reported figure.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

The Zacks Consensus Estimate for Sally Beauty’s fiscal 2024 top line is pegged at $3.7 billion, indicating a dip of 0.3% from the prior-year reported figure. The consensus mark for the fiscal 2024 bottom line is pegged at $1.66 per share, suggesting a decrease of 9.3% from the prior-year reported figure. The international specialty retailer and distributor of professional beauty supplies has a trailing four-quarter earnings surprise of 0.5%, on average.

Sally Beauty Holdings, Inc. Price and EPS Surprise

Sally Beauty Holdings, Inc. price-eps-surprise | Sally Beauty Holdings, Inc. Quote

Things to Consider About SBH’s Upcoming Results

Sally Beauty is focusing on three key strategic initiatives to drive growth and enhance operational efficiency. These initiatives include strengthening customer-centric efforts, expanding high-margin-owned brands and fostering innovation while optimizing overall capabilities.

To enhance customer engagement, Sally Beauty has been ramping up its marketing efforts and offering differentiated products. The company is implementing strategic programs like the Happy Beauty Co. initiative, which is gaining traction. In addition, Sally Beauty’s focus on market expansion, innovations and digital enhancements is garnering a positive consumer response. The continuation of these trends is likely to have positively impacted the company’s performance in the to-be-reported quarter.

For fiscal 2024, management expects almost flat net sales and comparable sales compared with the year-ago period. The consensus mark for fiscal 2024 comparable sales growth is pegged at nearly 0.2%. Gross margins are projected to be in the range of 50.5% to 51%, with an adjusted operating margin forecast at approximately 8.5% for the year.

Weak consumer sentiment remains a challenge for Sally Beauty, as customers are increasingly frugal and focused on necessity-driven purchases. This cautious approach is influenced by ongoing economic uncertainty and inflationary pressures, making consumers more price sensitive and more reliant on promotions to manage their budgets.

In addition, Sally Beauty has been facing escalated selling, general and administrative (SG&A) expenses, thanks to higher advertising and labor costs, among other factors. The continued impact of such downsides is expected to have put pressure on SBH’s results for the fiscal fourth quarter.

Earnings Whispers for Sally Beauty

Our proven model does not predict an earnings beat for Sally Beauty this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

SBH carries a Zacks Rank #4 (Sell) and has an Earnings ESP of 0.00%.

Stocks With the Favorable Combination

Here are some companies worth considering, as our model shows that these have the correct combination to beat on earnings this time around.

Best Buy BBY presently has an Earnings ESP of +0.06% and a Zacks Rank of 2 at present. The company is slated to register a top-line decline when it reports fiscal third-quarter results. The Zacks Consensus Estimate for quarterly revenues is pegged at $9.63 billion, which indicates a decline of 1.3% from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for Best Buy’s quarterly earnings has remained unchanged over the past 30 days at $1.30 per share. The figure indicates growth of 0.8% from the year-ago quarter’s number. BBY delivered an average earnings surprise of 11.4% in the trailing four quarters.

Target TGT has an Earnings ESP of +0.73% and a Zacks Rank #2 at present. TGT is likely to register growth in top and bottom lines when it reports third-quarter fiscal 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $26 billion, indicating 2.2% growth from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for Target’s fiscal third-quarter earnings is pegged at $2.28 per share, indicating 8.6% growth from the year-ago quarter. The consensus mark has remained unchanged in the past 30 days.

Dollar Tree DLTR currently has an Earnings ESP of +2.80% and a Zacks Rank of 3. The company is likely to register growth in top and bottom lines when it reports third-quarter fiscal 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $7.5 billion, indicating 1.9% growth from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for Dollar Tree’s earnings is pegged at $1.07 per share, indicating 10.3% growth from the year-ago quarter. The consensus mark has moved up a penny in the last 30 days.

Zacks Investment Research

Dillard’s, Inc. DDS is expected to register year-over-year top and bottom-line declines when it reports third-quarter fiscal 2024 numbers.

The Zacks Consensus Estimate for fiscal third-quarter revenues of $1.4 billion indicates a 3.8% decline from the year-ago figure. The consensus estimate for fiscal third-quarter earnings is pegged at $6.47 per share, implying a 30.4% decrease from the year-ago quarter’s figure. The consensus estimate has remained unchanged in the past 30 days.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

In the last reported quarter, the company registered a negative earnings surprise of 22.3%. We note that in the trailing four quarters, its bottom line beat the Zacks Consensus Estimate by 12.4%, on average.

What the Zacks Model Predicts for DDS

Our proven model does not conclusively predict an earnings beat for Dillard’s this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Dillard’s currently has an Earnings ESP of 0.00% and a Zacks Rank #3.

Trends to Drive DDS’ Q3 Results

Dillard’s has been witnessing the adverse impacts of a tough retail environment due to the cautious buying behavior of consumers for a while now. This has continued to impact the company’s sales and comparable-store sales (comps), as well as resulted in higher operating expenses. The persistence of these trends is expected to have impacted the top and bottom lines in the to-be-reported quarter.

Our model predicts comps decline of 2.4% for the fiscal third quarter due to a challenging retail environment. Retail sales are expected to dip 2.7% year over year in the fiscal third quarter.

Additionally, higher payroll and payroll-related expenses are likely to have dented margins and the bottom line in the fiscal third quarter.

We expect SG&A expenses to rise 5.3% for the third quarter fiscal 2024, while the SG&A expense rate is anticipated to expand 240 basis points (bps) to 30.4%. Our model anticipates the operating margin to decline 370 bps for the fiscal third quarter. Operating income is expected to decline 30% year over year in dollar terms.

Dillard's, Inc. Price and EPS Surprise

Dillard's, Inc. price-eps-surprise | Dillard's, Inc. Quote

However, Dillard's has been gaining from better inventory management initiatives and strong consumer demand. The company’s strategic focus on inventory management, store and e-commerce development, along with offering trendy merchandise, has positioned it strongly in the competitive retail landscape. It exited the fiscal second quarter with lower year-over-year inventory levels, which is expected to have aided the top line in the to-be-reported quarter.

The company’s efforts to capture growth opportunities in brick-and-mortar stores and e-commerce have been key drivers. It has been focused on enhancing brand relationships, remodeling stores and optimizing its activewear segment. Gains from these initiatives are likely to have widened the customer base and boosted the company's overall sales in the fiscal third quarter.

On the storefront, DDS has been gaining from initiatives to enhance brand relations, focus on in-trend categories, store remodels and increased rewards to store personnel. Its activewear brands are expected to have gained market share in the to-be-reported quarter.

Also, the e-commerce business has been well-placed on the enhancement of merchandise assortments and effective inventory management. We expect the company’s fiscal third-quarter performance to have gained from its focus on increasing productivity at existing stores, improving the omnichannel platform and enhancing domestic operations.

DDS Stock’s Price Performance & Valuation Picture

From a valuation perspective, Dillard’s is trading at a premium relative to industry benchmarks. With a forward 12-month price-to-sales ratio of 1x, which is below the five-year high of 1.22x but higher than the Retail - Regional Department Stores industry’s average of 0.36x.

The recent market movements show that DDS’ shares have risen 2.8% in the past three months compared with the industry's 1.5% growth.

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