Dollar Tree is raising its prices to $1.25, officially breaking the buck for good (2024)

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Dollar Tree is raising its prices to $1.25, officially breaking the buck for good? ›

Dollar Tree is officially breaking the buck. The discount chain announced Tuesday in its third-quarter earnings results that it will now sell the majority of its $1 items for $1.25 after testing higher prices earlier in the year.

Dollar Tree is yet again not sticking to the dollar theme in its name. The company announced last month that it would be increasing the prices on items again. The official prices announced were a minimum of $1.50.

In 2021, Dollar Tree caused an uproar when it raised its standard price from $1, as the store name implies, to $1.25. The retail giant then rolled back its prices to $1 in 2023, a move that coincided with cooling inflation.

The Dollar Tree makes money by finding ways to sell products at a lower cost to maximize profit. For example, Dollar Tree sells private-label branded products. This helps so that they are able to sell products in non-standard sizes, which are cheaper to produce, and maximizes the profit earned per item.

“This year, across 3,000 stores, we expect to expand our multi-price assortment by over 300 items at price points ranging from $1.50 to $7,” Dreiling said. Higher-priced items will include food, snacks, beverages, pet care, personal care and more.

DLTR Stock 12 Month Forecast

Based on 19 Wall Street analysts offering 12 month price targets for Dollar Tree in the last 3 months. The average price target is $139.88 with a high forecast of $170.00 and a low forecast of $115.00. The average price target represents a 28.48% change from the last price of $108.87.

Nonperishable Goods

Items like cleaning supplies, personal hygiene products — toothpaste, soap — and basic office supplies offer long-term value because they don't expire and will always be needed, he said. Dollar Tree has hinted that products in these categories will be on the increase list.

One key approach is bulk buying from suppliers. By purchasing millions of units to distribute across their numerous locations, they can acquire products at a lower cost, similar to the savings Costco offers its customers through bulk purchases. Another method dollar stores use is sourcing liquidated items.

The intrinsic value of one DLTR stock under the Base Case scenario is 150.91 USD. Compared to the current market price of 106.03 USD, Dollar Tree Inc is Undervalued by 30%. What is intrinsic value? Dollar Tree Inc's market capitalization is 22.9B USD.

The key reason for its loss is a $594.4 million charge for portfolio review, a $1.07 billion goodwill impairment charge, and a $950 million trade name impairment charge. Same-store sales beat estimates at Dollar Tree, but came in lower than the Street anticipated for Family Dollar, down 1.20%.

What's going on with the Dollar Tree? ›

Dollar Tree on Wednesday said it plans to close nearly 1,000 stores over the next several years, after disclosing significant losses in its latest earnings report. The discount store chain lost $1.7 billion in the fourth quarter, down sharply from earnings of $452.2 million a year ago.

Dollar Tree is owned by Dollar Tree, Inc. Rick Dreiling has served as the CEO of the company since January 2023 and has held the role of Executive Chairman on the Board of Directors since March 2022.

According to Yahoo Finance, a $5 price cap was announced in June 2023. The base price had also been raised to $1.25 in 2021. According to Dreiling, the move was made in order to add new products to their shelves.

We all know the saying that money doesn't grow on trees. But given that our bills are paper, I figured that our currency is, at least, made from trees. However, I recently discovered that not a single tree is cut down to make America's money!

99 Cents Only said that it filed for bankruptcy because "the last several years have presented significant and lasting challenges" in retail, including the impact of the pandemic, inflation and rising shoplifting. But 99 Cents Only's challenges stem back further. The retail chain has not been profitable since 2015.

Dollar Tree has already announced that it is on track in 2021 to have 500 Dollar Tree Plus stores by fiscal year-end – offering an assortment of value priced $1, $3, and $5 products. Another 1,500 stores are planned for fiscal 2022, and at least 5,000 Dollar Tree Plus stores are expected by the end of fiscal 2024.

Dollar General forecast 2024 sales to grow between 6.0% and 6.7%, above analysts' estimate of 4.4% growth to $40.33 billion, according to LSEG data.

Many Family Dollar stores were located too close to each other and cannibalized each other's own sales, too, D'Arezzo said. "Family Dollar's sales have been sputtering, hurt by neglected stores, poor product selection and unhappy workers," The Wall Street Journal reported in 2018.