Discount retailer Dollar Tree (DLTR), which sells everything for a dollar or less, reported third-quarter earnings Tuesday morning. The company earned 76 cents per share during the quarter, nearly 62% higher than last year's same-quarter earnings. Sales for the quarter increased by more than 12% to $1.25 billion from $1.11 billion in sales from last year. Dollar Tree beat the Street's earnings expectation of 66 cents per share by a dime and topped and revenue expectations of $1.24 billion. "I am pleased with our third quarter performance," said CEO Bob Sasser in a statment. "Sales and earnings were above plan." Solid earnings from a company specializing in cheap prices during a recession -- is anyone really surprised?
Looking ahead, Dollar Tree expects fourth-quarter earnings to come in between $1.30 and $1.39 per share, pretty much inline with consensus estimate calling for earnings of $1.35 per share, with of $1.49 to $1.53 billion. Dollar Tree expects full-year revenue in the range of $5.17 to $5.21 billion with earnings of $3.34 to $3.43. Expectations call for $3.29 per share.
Technically, DLTR is in an impressive uptrend, weathering the worst of the recent economic crisis. The stock has ascended from its early 2008 nadir in the upper $20 region to its current perch in the upper $49 region. As the stock advanced, it enjoyed support from its 10- and 20-week moving averages. It certainly appears that these trendlines will help push the stock higher, although it is consolidating below the $50 level.
We could see the stock retreat a bit as it prepares to launch a run at $50. If this run fails, the 10- and 20-week trendlines should put a floor to any slump.
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