Dollar Tree Inc.

Dollar Tree and Family Dollar Stores Inc. are both considered essential retailers and have remained open with no widespread store closings to date. Although consumer discretionary spending has decreased as a result of macroeconomic deterioration, sales of household consumables and food remain strong under both banners and we expect that to continue this year. In the 13 weeks ended May 2, 2020, enterprise comparable store net sales increased 7%, resulting from an increase in average ticket of 15.5%, partially offset by a decrease in traffic of 7.4%. This included a notable spike in Family Dollar's comps to 15.5% offsetting a 0.9% decline in Dollar Tree's segment comps in the last quarter, illustrating our thesis that the company will benefit from

...S&P Global Ratings lease-adjusted leverage likely to spike to high 2x in fiscal 2020 amid the volatile economic environment related to COVID-19, including uncertain consumer demand and government actions. Dollar Tree Inc. has reduced debt by about $5 billion since its Family Dollar acquisition in 2015. Before the pandemic, S&P Global Ratings had expected leverage to continue declining from the mid-2x range at the end of fiscal 2019 to the low-2x range by the end of fiscal 2020. We still believe the company can achieve this by 2021 if performance stabilizes. Dollar Tree and Family Dollar Stores Inc. are both considered essential retailers and have remained open with no widespread store closings to date. Although consumer discretionary spending has decreased as a result of macroeconomic deterioration, sales of household consumables and food remain strong under both banners and we expect that to continue this year. In the 13 weeks ended May 2, 2020, enterprise comparable store net sales increased...

Full Report