Dollar Tree Hikes Prices, KeyBanc Boosts EPS Estimates Amid Tariff Pressures

On May 20, Dollar Tree Inc. (NASDAQ:DLTR) made headlines after KeyBanc Capital Markets said that the company raised prices on several items from $1.25 to $2 in April.

KeyBanc Capital Markets emphasized Dollar Tree’s ability to adapt its inventory strategy in response to tariff-related challenges, either by eliminating specific products or sourcing from alternative suppliers. Although this flexibility has helped the retailer manage growing expenses, analysts warn that sustained tariff pressure may necessitate a review of its current financial projections.

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Although Dollar Tree Inc. (NASDAQ:DLTR) has already absorbed the impact of a 10% tariff, resulting in additional monthly costs between $10 million and $15 million, or an 8% to 12% wear on annual EPS, the retailer has not yet factored in the possibility of a 20% tariff, which could result in unmitigated costs of approximately $20 million per month.

That said, investor sentiment seems to be positive in general, as Dollar Tree’s pricing strategies, the projected net proceeds of about $800 million from the sale of Family Dollar, and the possibility of a stock re-rating following the divestment are all considered favorable. In addition, in light of Dollar Tree’s better-than-expected first-quarter performance, KeyBanc has revised its 2025 EPS estimate for the company, increasing it from $4.55 to $4.65.

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Read More: 10 Best Stocks to Buy According to the Bill & Melinda Gates Foundation Trust and 15 Best Stocks to Buy According to Jim Simons’ Renaissance Technologies.

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