Not All Businesses Are Contracting This Recession
The financial crisis means most companies are tightening their belts. Strategies include laying off employees, focusing on core businesses and building cash reserves. Most firms have put expansion plans on hold. But not the Dollar Tree.
Profits Up As Shoppers Trade Down
In a sign of the times, the discount retailer has just reported a 20% increase in profits as more consumers consider "trading down." According to a Reuters report, Dollar Tree's earnings beat both analyst and company expectations. Here are the key Reuters figures:
- Shares rose 3.9 percent to $39.77 on Tuesday morning on the New York Stock Exchange, off an earlier high at $41.35
- Dollar Tree said net income rose to $43.1 million, or 47 cents per share, for its fiscal third quarter that ended November 1, from $35.9 million, or 38 cents per share, a year earlier
- Analysts on average had expected a profit of 44 cents a share, according to Reuters Estimates. Dollar Tree had forecast a profit in the range of 40 to 43 cents
Dollar Tree is forecasting a big holiday season this year. Like many other companies, the firm is planning to build its cash reserves and delay any stock buybacks. But it is planning to keep its brick and mortar expansion efforts at full-throttle.
Writes Nicole Maestri, "Dollar Tree said it still expects to open 212 new Dollar Tree Stores 20 new Deal$ stores, and expand and remodel 86 stores this year."
Solid Recession Stocks
What other companies will profit from these turbulent times? Let us know in the comments section below which stocks you find appealing during a recession.