🟢 At a Glance:
Dollar Tree (NASDAQ: DLTR) just reported Q1 FY24 results, and let’s just say it’s not exactly a bargain anymore. Net income fell by 23% even as they opened more stores than ever. Is this discount chain now… discounted itself?
🛒 About Dollar Tree
From the land of $1 price tags to $1.25 regrets, Dollar Tree runs two retail chains: the OG Dollar Tree and the more grocery-like Family Dollar. It thrives on tight wallets, impulse buys, and budget hoarding.
👔 Key Management
- Rick Dreiling – Chairman & CEO (Former Dollar General head, retail vet)
- Jeff Davis – CFO (Under pressure to rein in cost creep)
- Bobby Aflatooni – CIO
- Jennifer Silberman – Chief Sustainability Officer
💵 Q1 FY24 Financials (Ended May 4, 2024)
| Metric | Q1 FY24 | YoY Change |
|---|---|---|
| Revenue | $7.63 billion | +4.2% |
| Gross Profit | $2.12 billion | +1.2% |
| Operating Income | $337 million | -21.1% |
| Net Income | $300 million | -23.4% |
| EPS (Diluted) | $1.38 | -19.3% |
🧂 Margins are thinning like the ketchup in a $1.25 burger.
🧾 Store Stats
- Dollar Tree: 8,356 stores
- Family Dollar: 8,446 stores
- New Stores Opened (Q1): 111
- Planned FY24 Openings: 600–650
Dollar Tree is expanding fast, but store profitability is lagging due to shrinkage (loss from theft), wage hikes, and inventory issues.
📉 Balance Sheet
- Total Assets: $24.4 billion
- Long-Term Debt: $3.45 billion
- Cash and Equivalents: $655 million
- Free Cash Flow: Negative due to inventory build-up
📦 Segment Performance
| Segment | Sales | YoY Growth |
|---|---|---|
| Dollar Tree | $3.9B | +4.6% |
| Family Dollar | $3.7B | +3.7% |
Dollar Tree outperformed slightly, but both chains suffered from margin erosion.
📊 Forward Value Range: $105–$115
Based on EV/EBITDA and price/sales metrics of peer retailers like Dollar General, Five Below, and Target.
🧠 EduInvesting Take
Dollar Tree has officially hit the inflation iceberg. What used to be a sure-shot margin play is now bleeding due to higher operating costs and shoplifting.
- ⚠️ Margin compression is serious
- ❄️ Operating leverage is reversing
- 🔁 Until Family Dollar turnaround shows up, this isn’t the same compounding story
⚠️ Risks
- Inflation not yet fully priced into new cost structure
- Labor union threats, wage hikes, and high employee churn
- Shrink remains a persistent cancer
📅 Author: Prashant Marathe
🗓️ Date: June 4, 2025
🏷️ Tags: Dollar Tree earnings, DLTR Q1 FY24, Family Dollar results, retail stock crash, inflation impact on US retailers, discount chains analysis, US stock news
