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Sunday, October 24, 2021

Dollar Tree, Inc. (DLTR) stock is climbing today: Why is it so?

Shares of the Dollar Tree, Inc. (DLTR) stock were climbing today after it announced the increase in the share buyback program. DLTR stock price saw a push of 13.53% to reach $97.95 a share at the time of this writing. The stock was red in the previous trade and went down by 0.68% with an $86.28 per share price. Let’s deep dive to explore more of it.

Dollar Tree, Inc, founded in 1986, is operating by running discount variety retail stores. The company is operating via two segments, Dollar Tree and Family Dollar. There are 7,805 stores under the Dollar Tree segments and 7,880 stores under the Family Dollar segment.


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DLTR stock Increased the Share Buyback Program:

According to today’s announcement, the board of directors of DLTR stock increased the share repurchase authorization by $1.05 billion. The total aggregate amount under this share buyback program is now $2.5 billion which includes nearly $1.45 billion available for repurchases which DLTR announced on March 2, 2021. Dollar Tree has been authorized by the board members to purchase its common stock through privately negotiated transactions or through an open market. The authorization has no expiry date.

Dollar Tree has repurchased shares worth $950 million in the fiscal year 2021. The stock had paid $4.0 billion in debt for the past several years. According to management, maintaining a share repurchase program is an important part of the capital allocation strategy of DLTR stock.

DLTR stock to take next step in Multi-Price Evolution:

Dollar Tree on September 28, 2021, did announce the addition of new price points above $1 in its all Dollar Tree Plus stores. The company is looking forward to testing additional price points above $1 in the selected legacy Dollar Tree stores. This decision is the reflection of the success of DLTR stock’s Combo and Dollar Tree Plus store formats and positive customer reaction.

Dollar Tree is on its way to have 500 Dollar Tree Plus stores by the end of the fiscal year 2021. The company has planned another 1,500 stores for fiscal 2022 and expects at least 5,000 Dollar Tree Plus stores by the end of the fiscal year 2025. Dollar Tree is currently operating 105 Combo Stores and anticipating adding 400 Combo Stores in fiscal 2022.

Conclusion: 

The market is liking the recently increased share buyback news by DLTR stock. The success in Combo and Dollar Tree Plus store formats and positive customer reaction is a good sign for DLTR. The anticipating addition of new stores in the future points to the bright future of this stock.

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