Dollar Tree: Building Blocks

From “The Dollar Store Downturn” (September 2024):

“I think that Dollar Tree has a clear path forward in the core banner. The combination of the low opening price point and the inclusion of some multi-price SKU’s (~15% of the mix) presents the opportunity for a better customer experience and a better business. While this will lead to a somewhat broader competitive set, I think that will be a manageable change. This doesn’t negate today’s pressures, some of which are due to tougher macro conditions, but I remain of the view that this is the right long-term vision. Successful execution – replicating the Dollarama playbook – offers significant financial upside… At ~$66 per share, Dollar Tree has a market cap of ~$14 billion… I believed the stock was priced to generate attractive (long-term) returns at ~$85 per share, and that remains true... In summary, I have decided to buy more DLTR.”