00:00 Speaker A
Now time for some of today’s trending tickers. Let’s start with Dollar Tree. That stock is up today on the news it’s selling its, uh, family dollar business to two private equity firms. Joining us now with more Yahoo finances, Brook DePalma. I remember when there was a bidding war for family dollar, and now they’re getting rid of it.
00:21 Brook DePalma
Everybody wanted it. And Dollar Tree actually won that bidding war against Dollar General. They bought it out for $9 billion, and now thinking about what it’s sold for today, $1 billion to two private equity firms. Investors applauding this move by the company wanting to say Dollar Tree to get rid of family dollar for quite some time. As family dollar really struggled to stay relevant in this time when Amazon and Walmart continue to gain share. CEO Michael Creden told investors on a call this morning, quote, “I strongly believe, a family, selling family dollar, and returning to our roots with an expanded assortment of Dollar Tree has created material value. 2025 is going to be a transition year as we pivot to operating Dollar Tree as a standalone entity.” Now, keep in mind, this will hit earnings for the full year by roughly 30 cents to 35 cents. But many investors calling this the right strategic move, saying that family dollar has been a consistent weight on top-line performance, margin rates, and management time. We now know that Dollar Tree will aim to focus on new formats including these multi-tier offerings, more prices being offered at stores, and so certainly many on the street applauding this move.
02:04 Speaker A
And tariffs front and center today again, of course. Um, I’m just wondering, did, did Dollar Tree have anything to say about that dynamic?
02:16 Brook DePalma
Yeah, discount retailers, dollar stores certainly top of mind within these tariff negotiations, these tariff discussions. They did say they were able to take action to offset 90% of incremental costs for the first round of tariffs. Like you’ve mentioned, doesn’t include the outlook when thinking about the second round of tariffs with some of ways that it was able to mitigate those included changing items, negotiating with suppliers, eliminating some products entirely, and also they’re really doubling down on that multi-price point offerings. So essentially, something that’s $2, $3, $5, instead of just that $1 strategy. But of course, now all eyes on April 2nd as those reciprocal tariffs will come into play here. They then said that they’ll have to keep that top of mind and once again, use those tools to mitigate that impact yet again.
03:21 Speaker A
Yeah, we’ll see. Thank you, Brooke.
03:25 Brook DePalma
Mhm.
