Can Dollar Tree Deliver In Its Next Earnings?

Dollar Tree’s stock (NASDAQ: DLTR) is set to announce its fiscal first-quarter earnings on Wednesday, June 4, 2025, with analysts estimating earnings of $1.20 per share on $4.53 billion in revenue. This would indicate a 13% year-over-year drop in earnings and a 41% decrease in sales compared to the previous year’s figures of $1.38 per share and $7.63 billion in revenue. Historically, DLTR stock has fallen 53% of the time following earnings announcements, with a median one-day decline of 11.1% and a maximum observed drop of 22%.

Dollar Tree, traditionally dependent on lower- and middle-income consumers, is now drawing in more affluent shoppers amidst ongoing inflation. Its discretionary products and urban clientele with slightly higher income levels offer stability. Nonetheless, the company is still susceptible to new tariffs, which it seeks to alleviate through supplier negotiations, manufacturing adjustments, and selective price hikes. The current market capitalization of the company stands at $19 billion. Over the past twelve months, revenue reached $18 billion, and it maintained operational profitability with $1.5 billion in operating profits and a net income of $-3.0 billion. Buy or Sell Dollar Tree Stock?

For traders focused on events, historical trends may provide an advantage, whether by preparing before earnings or responding to movements after the announcement. Thus, if you are looking for growth with less volatility compared to individual stocks, the Trefis High Quality portfolio offers an alternative, having outperformed the S&P 500 and delivered returns exceeding 91% since its launch. See earnings reaction history of all stocks.

Dollar Tree’s Historical Odds of Positive Post-Earnings Return

A few observations regarding one-day (1D) post-earnings returns:

• There are 19 earnings records logged over the past five years, with 9 positive and 10 negative one-day (1D) returns documented. In total, positive 1D returns were realized about 47% of the time.
• However, this ratio drops to 36% if we assess data from the last 3 years instead of 5.
• The median of the 9 positive returns = 3.1%, and the median of the 10 negative returns = -11%

Additional statistics for observed 5-Day (5D) and 21-Day (21D) returns following earnings are summarized along with the data in the table below.

Relationship Between 1D, 5D, and 21D Historical Returns

A relatively lower-risk approach (though ineffective if the correlation is low) is to comprehend the correlation between short-term and medium-term returns after earnings, identify a pair with the strongest correlation, and take the right trade action. For instance, if 1D and 5D show the highest correlation, a trader can place themselves “long” for the ensuing 5 days if the 1D post-earnings return is positive. Below is some correlation information drawn from 5-year and 3-year (more recent) history. Note that the correlation 1D_5D indicates the correlation between 1D post-earnings returns and following 5D returns.

Is There Any Correlation with Peer Earnings?

Occasionally, peer performance can impact post-earnings stock reactions. In fact, the pricing-in may commence even before the earnings are declared. Here is some historical data regarding the past post-earnings performance of Dollar Tree stock compared to the stock performance of peers that reported earnings shortly before Dollar Tree. For a fair assessment, peer stock returns also represent post-earnings one-day (1D) returns.

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