Here's Why You Should Add Dollar Tree Stock in Your Portfolio Now

Dollar Tree, Inc. DLTR is taking smart steps to enhance the in-store experience and drive sustainable growth. Its strategic initiatives, particularly the ongoing store conversions and targeted expansions, are paying off, as reflected in improved same-store sales (comps). These efforts are drawing higher customer traffic while also lifting average basket size, underscoring the effectiveness of Dollar Tree’s focus on assortment breadth, value perception and store format optimization.DLTR’s Store-Expansions & Category Strength AidDollar Tree’s 3.0 stores, which include new locations and converted stores, feature expanded multi-price assortments and have been outperforming other formats across key metrics such as traffic, average ticket, comparable sales and discretionary product mix. The company is on track to convert about half of its store base to the 3.0 format by year-end. The company’s 2.0 stores offer a more limited multi-price assortment concentrated in a single aisle, while 1.0 stores maintain more than 95% of items priced at $1.25. These format-driven initiatives are expected to continue supporting comparable-store sales growth and enhancing overall profitability over time.The company is experiencing broad-based performance across categories, with comps up 3.5% for consumables and 4.8% for discretionary during the third quarter of fiscal 2025. Discretionary categories accelerated in the fiscal third quarter with outstanding performances in party and home decor. Consumables were steady, driven by household cleaning, personal care, snacks and cookies. Seasonal performance remained strong, mainly toward the end of the quarter. DLTR’s merchandising strategy also appears encouraging. Dollar Tree has unveiled its partnership with Uber Eats, which reflects its strategic move in meeting customers’ needs and facilitating the way they want to shop. This collaboration provides access to Uber Eats' 25 million customers, which is a newer demographic that the company has yet to completely tap into. DLTR remains excited by the initial response to the launch. DLTR’s expanded assortment offers highly compelling products with agility in managing tariffs and other cost headwinds, all while providing customers with great discovery at reasonable prices. This offers great resilience in the times of ever-increasing agility of its organization. The company is executing on growth, productivity and cost control.DLTR’s Price Performance, Valuation and EstimatesDollar Tree’s shares have increased 50.2% in the past three months compared with the industry’s 5.4% rise.Image Source: Zacks Investment ResearchFrom a valuation standpoint, DLTR is trading at a forward price-to-earnings ratio of 19.81X compared with the industry’s average of 30.15X.Image Source: Zacks Investment ResearchThe Zacks Consensus Estimate for DLTR’s fiscal 2025 and 2026 earnings per share (EPS) indicates year-over-year growth of 12.2% and 17.1%, respectively. The company’s EPS estimate for 2025 and 2026 has moved north in the past 30 days.Image Source: Zacks Investment ResearchDollar Tree currently carries a Zacks Rank #2 (Buy).Other Solid Picks in RetailAmerican Eagle Outfitters AEO, a specialty retailer of casual apparel, accessories and footwear, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for American Eagle Outfitters’ current financial-year sales indicates growth of 2.4% from the year-ago figure. AEO delivered an average earnings surprise of 35.1% in the last four quarters.Boot Barn BOOT operates as a lifestyle retail chain offering footwear, apparel and accessories, holding a Zacks Rank of 2 at present. BOOT delivered a trailing four-quarter earnings surprise of 5.4%, on average.The Zacks Consensus Estimate for Boot Barn’s current fiscal-year sales indicates growth of 16.2% from the year-ago period’s reported figure.Allbirds, Inc. BIRD, a lifestyle brand, currently has a Zacks Rank #2. The company delivered a trailing four-quarter earnings surprise of 18.5%, on average.The Zacks Consensus Estimate for BIRD’s current financial-year EPS indicates growth of 8.4% from the year-ago figure. Free Report: Profiting from the 2nd Wave of AI ExplosionThe next phase of the AI explosion is poised to create significant wealth for investors, especially those who get in early. It will add literally trillion of dollars to the economy and revolutionize nearly every part of our lives.Investors who bought shares like Nvidia at the right time have had a shot at huge gains.But the rocket ride in the "first wave" of AI stocks may soon come to an end. The sharp upward trajectory of these stocks will begin to level off, leaving exponential growth to a new wave of cutting-edge companies.Zacks' AI Boom 2.0: The Second Wave report reveals 4 under-the-radar companies that may soon be shining stars of AI’s next leap forward.Access AI Boom 2.0 now, absolutely free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Dollar Tree, Inc. (DLTR): Free Stock Analysis Report American Eagle Outfitters, Inc. (AEO): Free Stock Analysis Report Boot Barn Holdings, Inc. (BOOT): Free Stock Analysis Report Allbirds, Inc. (BIRD): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks