FDO issues persist, FY EPS guidance lowered
DLTR reported another weak comp at FDO (-1.1% vs. consensus +1.4%), despite an easy comparison (-1.2%). Similar to DG, weather was cited as a Q1 headwind, with performance accelerating Q2TD. Gross margins (-17bps YoY) were challenged, with a notable ~40bps decline at Dollar Tree. DLTR's inventory position was also high (+12.8% YoY vs. +5.0% sales growth), potentially contributing to the FY EPS guidance reduction ($5.30 mid-point vs. consensus $5.64). A challenging start to the year.Dollar Tree is an operator of discount variety stores. The company's stores operate under the names of Dollar Tree, Family Dollar and Dollar Tree Canada. The company's segments are: Dollar Tree, which is the operator of discount variety stores providing merchandise at the fixed price point of $1.00; and Family Dollar, which operates general merchandise discount retail stores. The merchandise mix in the company's Dollar Tree stores consists of consumable merchandise, variety merchandise, and seasonal goods. The merchandise mix in the company's Family Dollar stores consists of consumable merchandise, home products, apparel and accessories merchandise, and seasonal and electronics merchandise.
Formed in 2003 by an established team from Cazenove, one of the most respected investment banks in the UK, Atlantic Equities conducts and publishes fundamental, bottom up research on mid and large cap US companies.
Atlantic provide order execution through a wide range of DMA products and algorithmic trading suites.
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