DLTR - Discount Retailer Dollar Tree Could Benefit By Continued High Inflation
2024-06-03 11:07:19 ET
Summary
- Dollar Tree, Inc. could benefit from high inflation, forcing more consumers to be price sensitive when shopping.
- The company is taking major steps, including closing 970 Family Dollar stores, to turn the discount retailer around.
- The stock price has dropped over 20% since their CEO, who was paid over $136 million in 2022, took over in January 2023.
Recently, I bought discount retailer Dollar Tree, Inc. ( DLTR ) as a potential turnaround investment. The retailer's stock plunged in March after disclosing multi-billion dollar charges related to their Family Dollar segment. For a number of reasons, including that I expect the rate of inflation to remain high, forcing consumers to be more price sensitive when making purchases, Dollar Tree could report more robust results in 2025 and beyond.
I am taking a very different approach when writing this article. Instead of just doing some "desktop" analysis, I used a very hands-on approach based on my experiences of shopping in their stores 3–4 times per week while I was in Wyoming to buy either protein or energy drinks before going to the gym. In Florida, I go about 1–2 times per month. In New York, I now never go because their stores are closed....
Discount Retailer Dollar Tree Could Benefit By Continued High Inflation