Subject: Re: DLTR Earnings
Store Closings : Could be as many as 1,000 stores (they currently operate 16,774)
Sales Forecast : $31B to $32B (2023 Revenue was $28B)
Earnings Forecast : $6.70 to $7.30

The stock is trading at just under $130 / share roughly a 18x multiple if you take the mid-point of the EPS forecast.

Clearly the stores they are closing must be dead weight if they think they can grow revenue 10% with 5% less stores.


I wonder if this is the solution to rampant theft: close a bunch of stores in places that don't take crime seriously, where there were no earnings anyways.

If they think they can get 14-18% more sales while they close up to 5% of their stores, they may be planning on some big structural changes, which is another thing to worry about. Perhaps that would be by expanding the food segment, which has been their revenue growth leader in recent years, but the downside of that is the margins are much lower.

The haircut seems warranted, and I still don't think I want to pay for 18+x hoped for earnings when even that hope seems optimistic, as that would mean earnings 32% higher than the last 4 quarters for instance. Dollar General is trading at 18x earnings from the last 4 quarters without optimistic future projections, but maybe the other shoe is about to drop (tomorrow morning?) I think I'll stear clear of both of them.

dtb