Goldman Sachs Comments on Dollar Tree (DLTR) Q3 Miss

Dollar Tree (NASDAQ: DLTR) stock traded lower early on Thursday after Q3 results missed consensus. Given elevated expectations heading into the print, Goldman Sachs analyst Stephen Grambling thinks shares to be pressured today, though he remains positive on the stock.

"The 3Q results fell short of expectations as management cited a 'very cautious consumer environment', which was only partially offset by increased customer traffic from trade down," said Grambling.

"Relative to our estimates, the miss was driven by a weaker than expected comp of 3.1% (vs. our 5% and management's guidance for +LSD-MSD) and corresponding SG&A deleverage of 3bp (vs. our -50bp), partially offset by better gross margin expansion despite added costs of the new DC," added the analyst. "Management raised FY2013 EPS guidance to $2.72-$2.78 from prior $2.65- $2.77 excluding additional buybacks. Management also issued 4Q EPS guidance of $1.01-$1.07 (also excluding buyback), which would put GS/consensus of $1.09/$1.10 at the high end of the range when including $0.03+ in buybacks from the ongoing ASR in 4Q. The 4Q13 guidance embeds +LSD comps."

Goldman Sachs has a Buy rating on Dollar Tree with a price target of $62.00

For an analyst ratings summary and ratings history on Dollar Tree (NASDAQ: DLTR) click here. For more ratings news on Dollar Tree click here.

Shares of Dollar Tree closed at $58.92 yesterday.

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