Dollar Tree (DLTR), a retail chain with thousands of stores across the US that cater to low-income shoppers, posted strong Q1 numbers late last week, prompting JP Morgan to upgrade shares to Neutral from Underweight.
First-quarter sales grew 9% year-over-year to $1.05bn, as same-store sales increased 2.1%. The average spend per customer rose, as did customer traffic overall. Food and healthcare items were in particularly high demand. These are expected to continue to benefit from the “tough environment.”
As gas prices and other inflation reduce consumer purchasing power, Wal-Mart, Dollar Tree, and other discounters continue to do well at the expense of full-price retailers.
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