Add a New Bears Reason

Company: Dollar Tree Stores (DLTR)
Current price:
Headline: (100 character max)
Analysis:
Cancel
66%
agree
6 votes

  Increasing Costs Cannot Be Passed on to Consumers

By its very nature, Dollar Tree Stores cannot pass on price increases to consumers because they cannot raise prices above $1. Any price increases stemming from increases in commodities' prices, labor costs, or inflation must be absorbed by the company.

(100 character max) Cancel
100%
agree
1 votes

  Can Dollar Tree Have the same Level of Growth During Recovery?

Dollar Tree has reported quarter after quarter of increasing sales and net income growth throughout the economic downturn. As many retailers felt the effects of frugal consumers, Dollar Tree thrived as they came en masse to buy its $1 items. The question now is how will a recovering economy affect the consumers long-term preferences. Was their migration to Dollar Tree and other ultra discount retailers like Family Dollar and Dollar a temporary movement, or will these consumers, experiencing the savings and value of shopping at a discount retailer, remain loyal customers? If these customers do not return, Dollar Trees bottom line will surely not see the same level of rapid growth. Additionally, will Dollar Tree be able to keep up its stock price a recovering economy? If the company cannot continue to put up numbers better than analysts are expecting, the shares will fall. As of the end of the summer of 2010, Dollar Tree was trading at around $48 per share, 18 times its earnings, and near its 52 week high.

(100 character max) Cancel
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki