Dollar Tree Inc (DLTR) said Tuesday that it is withdrawing its first quarter and full-year 2020 guidance, citing the volatile economic environment and uncertain government actions due to the coronavirus pandemic.
The discount retailer cautioned that sales for the remainder of the first quarter could be impacted by the company’s ability to secure and re-stock certain products in high demand ahead of the Easter holiday season. Dollar Tree announced on March 19 that it plans to hire 25,000 employees to cope with demand at its stores and distribution centers.
“Our stores experienced an unprecedented spike in demand for certain products,” said Dollar Tree Chief Executive Officer Gary Philbin.
The discount retailer reported a “material” sales pick up in both Dollar Tree and Family Dollar stores and soaring demand for cleaning supplies and sanitizer, household products, paper goods, food and over-the-counter medicine. Quarter-to-date same-store sales were up 7.1% at Dollar Tree stores and 14.4% at Family Dollar stores. However, sales moderated in the seven days ending March 29 with Dollar Tree same-store sales declining 19.4% as the industry heads into the Easter shopping season, the company said.
The analyst community gives the Dollar Tree stock a Moderate Buy consensus rating based on 8 Buys and 9 Holds. The $90.53 average price target indicates shares could rise about 22% in the coming year. (See Dollar Tree stock analysis on TipRanks)
As of March 30, Dollar Tree had $1.9 billion in cash and investments, including $750 million drawn down from its $1.25 billion revolving credit line.