Grok, Dean Drobot, en.elcierredigital.com Dollar Tree gets the best news in America and Sam's Club doesn't have it
The American giant positions itself in the United States, knocking out its competitors
Consumer confidence in the United States is at one of its lowest points in years. The latest figures, both from The Conference Board index and the one compiled by the University of Michigan, reflect a pessimistic sentiment and a strong expectation of recession. Amid this complicated outlook, Dollar Tree, a discount store chain, seems to be taking advantage.
A haven for the cautious consumer
In times of economic uncertainty, it is common for people to minimize their spending, which is why supermarkets offering low-cost products tend to benefit. Dollar Tree, with more than 8,600 stores mainly in peripheral areas of the United States, has managed to capitalize on this situation. Its offering of basic products and affordable prices especially attracts the middle and lower classes, but also consumers who want to spend less without sacrificing essential needs.
This type of store serves as a relief for those who want to adjust their budget without giving up certain products. In addition, Dollar Tree not only keeps its usual customer base, but also attracts consumers who traditionally did not shop there, but are now looking for ways to save money.
Sustained growth in difficult times
During the last four years, Dollar Tree has recorded a steady increase in its comparable revenues. Only in one quarter of 2021 did it suffer a slight decline, but since then it has resumed growth. This success is explained by a greater flow of customers, especially during 2023 and 2024, and by an increase in the average spending per purchase.
The most notable aspect is that its revenues have surpassed those of the general market in both years, accompanied by an increase in units sold. This shows that the company is gaining ground even in an adverse economic environment.
Potential and forecasts for 2025
Sales per square foot remained stable at $232 in 2024, but show an annual growth of 3% since 2019. For this year, an earnings per share of $5.3 is estimated. Applying a multiple of 18, the target share price would be around $95.4, which represents an upside potential of 6% compared to the current price.
Dollar Tree shares have experienced a recent upward trend. Its 14-week moving average has clearly surpassed the 28-week one, and the price broke through both averages without reaching an overbought zone. In addition, the ADX indicator shows signs of a strong trend, which suggests that the positive momentum could continue.
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