Dollar Tree's shares rose about 1% in pre-market trading after Jefferies upgraded the discount retailer to Hold from Underperform, citing improved store traffic and a resilient pricing strategy.
Upgrade follows data showing Dollar Tree’s rolling three-month foot traffic rose 1.4% in the second quarter, reversing a 0.8% decline in the first quarter and marking the strongest growth in nine trailing quarters. Temmuz’s traffic accelerated further to a 4.5% increase, according to Placer’s visits data. Jefferies raised its second-quarter comparable-store sales estimate to 3.4% from 2.5%, surpassing the Street’s 3.1% forecast and aligning with the upper end of management’s 2.5%–3.5% guidance range.
Analyst Corey Tarlowe also raised the second-quarter earnings per share estimate to $1.15 from $1.00, above the consensus $1.12. Firm’s upgrade reflects confidence that Dollar Tree’s pricing initiatives are stabilizing traffic and mitigating prior concerns over operational complexity from its multi-price rollout and competitive pressures.
Jefferies previously downgraded Dollar Tree over risks related to the rollout of higher price points across its 9,000 stores, competitive headwinds from peers such as Target, and expectations that ticket-driven growth could weigh on traffic and margins. Hoewel het bedrijf de uitvoeringgerelateerde risico's erkent - waaronder de voortgaande overgang naar het "G.O.L.D. Standard" winkelmodel - verwacht het nu minimale verlies van marktaandeel in de nabije toekomst, omdat de prijsmaatregelen in werking treden. Een mogelijk klein ticketsetback in het derde kwartaal is vermeld vanwege een promotie van $1 op select artikelen in het 40-jarig jubileumujaar, hoewel dit op korte termijn een toegenomen bezoekersaantallen kan veroorzaken.
