Stockchase Discover Dollar Tree DLTR-Q HOLD May 16, 2023

Introducing multiple price points, which increases basket size. Its turnaround story was hit by Covid, higher interest rates, and the slowing economy. Less traffic. Fewer discretionary purchases, which hit margins. Reassessing number of Family Dollar stores, which could be reduced. Strategies gaining traction.

US dollar stores are suffering a bit. Lower-income US consumer starting to pull back purchases. Longer term, occupies an attractive niche. In midst of a multi-year change in strategy, adopting a DOL playbook of multiple price points. Uneven path, but generally working well. No dividend.

Also owns FDO, struggling, all options on table including consolidating stores.

If company not performing well - would recommend selling. 

The consumer is realizing that dollar stars no longer offer bargains. These stores were raising prices aggressively during Covid and can't call themselves dollar stores now. Look at places like Walmart instead for deals.

He thinks the problem is that consumers would rather spend at Walmart or Costco.

Retail is tough right now, no matter if you're high end or low. Management missteps reflected in stock price. Falling knife. Might be a bounce for a trade, but not where you want to be for the long run. He's long term, not a trader.

If Trump slaps tariffs on Chinese goods, the dollar stores will suffer badly.

Sold a couple of months ago on poor performance. Questions about health of lower-income consumer have been flagged on conference calls, and this concern is creeping up even to the medium-income consumer. Taking steps to increase price points. An improving consumer would be a tailwind. If he had to choose, this would be his pick.

It reports Wednesday. It no longer sells the value in their products, certainly not since Covid. Even Walmart is struggling, so Dollar Tree?

The merger with Family Dollar never made sense, and he never liked FD. This has led to $8 billion in losses. Shameful. They never had a plan to integrate.