Dollar Tree (DLTR-Q)

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.

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

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.

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

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.

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

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.

If company not performing well - would recommend selling. 

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.

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.

The question was on his preference between Dollar General and Dollar Tree in the U.S. Dollar General has cratered so it looks like a buying opportunity but actually isn't since it benefited from the pandemic and may just be returning to normal levels. This also causes him to be cautious on Dollar Tree. 

Disappointing. Latest results showed topline traction, but margins were hit. Repositioning. Lower income households have been hit by interest rates, so discretionary spending is down. Retail shrinkage a big US problem. She's holding for now.

In the early innings of implementing the successful strategy of DOL. Increasing price points and right-sizing stores. Doing well in this environment of a weakening consumer.

DG has executed very well but they've been dealing with cost inflation, consumers buying lower-margin consumables vs. discretionary and "shrink" (theft). Owns Dollar Tree, which suffers similar problems, but DT has been introducing more price points as the new CEO restructure, so she sees more potential here.

Delivered a poor quarter and blamed theft, but they also suffer from margin erosion and a store transformation that keeps taking longer. Guidance was poor. Shares have slumped.