What is the relationship between Wal-Mart and Dollar Tree? The second quarter 2013 financials from the discount giants seem to reflect the increasing trend of smart shoppers who desert Wal-Mart on items that cost less at Dollar Tree. Wal-Mart Stores Inc. (WMT) shows a 1% increase in net sales for the quarter, whereas Dollar Tree Stores Inc. (DLTR) is up 8.3% for the same.
The GuruFocus Buffett-Munger Screener currently highlights these two discount stores for high predictability and EBIDTA growth. The consumer defensive sector they belong to describes not only companies that make food, beverages and tobacco, but also manufacturers of household and personal products as well as packaging.
Here’s the second quarter action on two stores competing in some categories:
Dollar Tree Stores Inc. (DLTR)
EBITDA: 20.51% 12-month Growth Rate
Rated with 4.5-star predictability, Dollar Tree Stores Inc. (DLTR) is up 5% over 12 months, with a market cap of $11.79 billion; its shares trade at around $52.66 with a P/E ratio of 18.40 and P/S ratio of 1.61.
Dollar Tree Inc. is an operator of discount variety stores offering merchandise at the fixed price of $1.00. The company operates approximately 4,351 discount variety retail stores in the U.S. and Canada under these names: Dollar Tree, Deal$, Dollar Tree Deal$, Dollar Giant and Dollar Bills.
The company reported its results for the quarter ended May 4, 2013 (first quarter) with consolidated net sales for the first quarter at a record $1.87 billion, an 8.3% increase compared to $1.72 billion reported for the quarter ended April 28, 2012 (first quarter 2012). Comparable store sales increased 2.1%, on top of a 5.6% increase for the first quarter 2012. Earnings per diluted share for the first quarter were $0.59, an 18.0% increase compared to earnings per diluted share of $0.50 reported for the first quarter 2012, according to a company press release.
The company will report second quarter 2013 results on August 22.
Guru Action: DLTR is currently held by 15 Gurus. As of June 30, 2013, Meridian Funds sold 50,500 shares at an average price of $48.73 for a gain of 8.1%. Meridian Funds has averaged a gain of 26% on 654,900 shares bought at an average price of $41.84 per share.
Check out all the Guru trading action from the first quarter of 2013.
Wal-Mart Stores Inc. (WMT)
EBITDA: 6% 12-month Growth Rate
Rated with 5-star predictability, Wal-Mart Stores Inc. (WMT) is up 5% over 12 months, with a market cap of $252.73 billion; its shares trade at around $77.13 with a P/E ratio of 15.30 and P/S ratio of 0.55.
Incorporated in 1969, Wal-Mart Stores Inc. has more than 10,800 retail units in 27 countries, including the U.S. and all over the world with wholly-owned subsidiaries in Argentina, Brazil, Canada, China, Japan and the United Kingdom; majority-owned subsidiaries in Chile, Mexico, Africa, Central America; and Wal-Mart joint ventures in India and China and other controlled subsidiaries in China. Wal-Mart’s operations comprise three reportable business segments including Wal-Mart U.S., Wal-Mart International and Sam's Club.
For the first quarter ended April 30, 2013, Wal-Mart reported net sales for the first quarter at $113.4 billion, an increase of 1.0% over last year. Net sales last year benefited by 1.0% from the extra day due to leap year. Membership and other income increased 1.6% versus last year, due primarily to an increase in membership income. Total revenue for the first quarter was $114.2 billion, a 1.0% increase over last year.
Wal-Mart will report second quarter 2013 results on August 15.
Guru Action: As of June 30, 2013, John Hussman sold 498,000 shares at an average price of $76.89 for a gain of 0.1%. He has averaged a gain of 21% on 1,051,300 shares bought at an average price of $63.49 per share.
Have a look at the GuruFocus Buffett-Munger Screener for rapid research results.
If you are not a Premium Member, we invite you for a 7-day Free Trial.
GuruFocus Real Time Picks reports the stock purchases and sales that Gurus have made within the prior 2 weeks. The report time lag can be as short as 2 days after the date of the transaction. This feature is for Premium Members only.
Check out the GuruFocus special feature 52-week low screener to find the stocks hitting new lows but are still held by top investor Gurus and Insiders.
Also check out:
- Meridian Funds Undervalued Stocks
- Meridian Funds Top Growth Companies
- Meridian Funds High Yield stocks, and
- Stocks that Meridian Funds keeps buying
About the author:
Sally JonesSally Jones writes about Real Time Picks. She says, "I truly enjoy watching the Gurus in realtime and telling their story."