Dollar Tree (DLTR) Stock Gains Despite Soft Guidance

NEW YORK (TheStreet) -- Dollar Tree (DLTR) stock is gaining Thursday after beating earnings estimates in its first quarter. The discount chain is moving higher even as second-quarter and full-year guidance came in below consensus. By midmorning, shares are up 7.1% to $53.55. 

In its April-ended first quarter, the company earned 67 cents a share, a penny higher than analysts surveyed by Thomson Reuters expected. Revenue of $2 billion was inline with estimates. 

However, for its second quarter, management guides for earnings between 58 cents and 64 cents a share, while analysts anticipated profits at the high end of that range. For its full year, the company expects earnings of $2.94 to $3.12, below an expected $3.15 a share. 

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TheStreet Ratings team rates DOLLAR TREE INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate DOLLAR TREE INC (DLTR) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its notable return on equity, good cash flow from operations, growth in earnings per share, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

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