Dollar Tree (DLTR) Expected to Beat Earnings Estimates: Should You Buy?

Dollar Tree (DLTR) is anticipated to report a year-over-year earnings decline on lower revenues for the quarter ending April 2025, with consensus estimates pointing to EPS of $1.18 on revenues of $4.54 billion, down 17.5% and 40.5% respectively. However, a recent upward revision in EPS estimates, resulting in an Earnings ESP of +9.12% and a Zacks Rank #3, suggests the company is likely to beat these expectations when it reports on June 4. Dollar General (DG), another player in the discount retail sector, also shows a positive Earnings ESP, indicating a potential earnings beat.

Analysis

Dollar Tree (DLTR) is anticipated to report a substantial year-over-year decline in both earnings and revenue for the quarter ending April 2025, with consensus estimates at $1.18 per share (-17.5% YoY) and $4.54 billion (-40.5% YoY) respectively. Despite this challenging fundamental backdrop, recent analyst activity suggests a potential for an earnings surprise; the consensus EPS estimate has been revised 1.77% higher over the past 30 days, and the company currently holds a Zacks Earnings ESP (Expected Surprise Prediction) of +9.12%. Coupled with a Zacks Rank #3 (Hold), this combination indicates a high probability, approaching 70% according to Zacks' model, that DLTR will exceed the consensus EPS forecast in its June 4th report. This positive short-term indicator contrasts with DLTR's historical performance, having beaten EPS estimates only once in the last four quarters, including a -3.21% miss in the prior quarter. The market will scrutinize management's commentary during the earnings call for insights into the sustainability of any immediate price reaction and future earnings trajectory. Similarly, peer Dollar General (DG) is also expected to beat its consensus EPS estimate, albeit with a projected YoY earnings decline of 10.9% but a revenue increase of 3.7%.

Key Decisions for Investors

• Given DLTR's +9.12% Earnings ESP and Zacks Rank #3, consider the heightened probability of an earnings beat on June 4th, which could lead to short-term stock price appreciation.
• Investors should weigh the potential for a positive earnings surprise against the significant projected year-over-year declines in DLTR's revenue and earnings, and its inconsistent past surprise history, paying close attention to management's forward-looking guidance.
• Closely evaluate the full earnings report and management's discussion on June 4th to assess the underlying business recovery and future growth prospects beyond the immediate impact of an earnings beat.