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Dollar Tree, Inc. (NASDAQ:DLTR), currently valued at $21.56 billion, announced Monday that it has completed the sale of all issued and outstanding membership interests of its Family Dollar Stores, LLC subsidiary to 1959 Holdings, LLC. The transaction closed Saturday and was conducted under a Membership Interest Purchase Agreement originally signed on March 25, 2025. According to InvestingPro data, the company has demonstrated strong cash flow management, which could support this strategic move.
According to a press release statement and the company’s SEC filing, the buyer paid Dollar Tree a base purchase price of $1,007.5 million in cash, subject to certain adjustments related to working capital and net indebtedness. Net proceeds from the sale are estimated to total approximately $800 million, which includes $665 million received at closing and about $135 million from monetization of cash prior to closing through reduced net working capital. These figures remain subject to final adjustment under the terms of the purchase agreement, expected within 90 days of closing.
Dollar Tree reported that, as a result of the transaction, its total assets as of May 3, 2025, decreased by $4,043.7 million to $14,247.5 million, reflecting the removal of Family Dollar business assets and the addition of cash proceeds. Total (EPA:TTEF) liabilities decreased by $4,026.7 million to $10,359.7 million, primarily due to the elimination of Family Dollar-related liabilities. Shareholders’ equity decreased by $17.0 million to $3,887.8 million, reflecting an estimated loss on sale.
For the 13 weeks ended May 3, 2025, pro forma income from continuing operations increased by $23.6 million to $337.1 million, with basic and diluted earnings per share from continuing operations rising by $0.11 to $1.58. For the fiscal year ended February 1, 2025, pro forma income from continuing operations increased by $108.7 million to $1,151.2 million, and basic earnings per share from continuing operations increased by $0.51 to $5.34. The stock has shown strong momentum, gaining over 35% in the past six months, though InvestingPro data indicates 23 analysts have revised their earnings expectations downward for the upcoming period. For deeper insights into Dollar Tree’s financial health and future prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
Dollar Tree will provide certain transition services to the buyer under a Transition Services Agreement, including human resources, finance, and information technology support.
All information is based on a press release statement and the company’s Form 8-K filing with the Securities and Exchange Commission.
In other recent news, Dollar Tree reported first-quarter results that surpassed expectations, with a 5.4% increase in comparable sales and adjusted earnings per share of $1.26, exceeding projections by 6 cents. The company has set a high bar for fiscal year 2025, forecasting net sales between $18.5 billion and $19.1 billion, and raising its adjusted EPS guidance to $5.15-5.65. However, Dollar Tree also disclosed an expected 45-50% decline in second-quarter earnings, primarily due to $70 million in additional tariff costs and $40 million in increased labor expenses. Despite these challenges, the company anticipates a 50-75 basis point increase in full-year gross margins.
Analysts have reacted to these developments with mixed responses. Bernstein SocGen raised its price target to $86, while Piper Sandler increased it to $93, both noting the company’s strong sales performance. Truist Securities set a higher price target of $109, expressing confidence in Dollar Tree’s sales momentum and potential earnings growth. UBS maintained a Buy rating with a $108 price target, viewing the guidance confusion as an opportunity. Meanwhile, Loop Capital raised its target to $85 but expressed concerns about future earnings potential and tariff challenges. These recent developments continue to draw attention from investors and analysts alike.
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