Major indices also rose Tuesday, but their gains were much more modest. The Dow Jones Industrial Average gained 67 points, or 0.4%, on Tuesday, while the S&P 500 rose 4.8 points, or 0.2%, and the Nasdaq added 17.49 points, or 0.3%. Trading volumes and economic news were light on Tuesday, but as we near the end of earnings season those few retailers reporting late have impressed investors.
Dollar Tree saw its shares rise 8.2% Tuesday after posting better-than-expected fiscal third-quarter profit. Analysts had been expecting adjusted earnings per share of 78 cents, but Dollar Tree posted adjusted EPS of 81 cents. That came on $5.00 billion in sales, just below estimates of $5.07 billion but still a 1.1% year-over-year increase. Same-store-sales rose 1.7%, better than the 1.4% expected. Dollar Tree is now the largest U.S. dollar-store chain after completing its acquisition of Family Dollar.
This has helped the company continue to put pressure on big-box discount retailers such as Walmart. Dollar Tree's smaller footprint and low prices starting at $1 continue to be a winning combination even though the economy is improving and more Americans are working. The fact that consumers haven't gone back up market to higher-priced stores is a sign Dollar Tree may be a recession-proof business that can still post strong figures in a healthy economy -- a very strong and sought-after combination.
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