It’s weekly review time, and there’s a lot to discuss… mainly that I got it wrong with Monday’s look ahead… particularly with Dollar Tree’s Q2 2022 earnings report.
And when I get it wrong, I’ll own up to it like a boss, because that’s what we do. No one gets everything right… especially in markets like this that turn on a dime on any headline or rumor.
Dollar Tree (Nasdaq: DLTR) is a stock I like, and I still like it after its Q2 2022 earnings this week. DLTR beat expectations and the stock still fell from about $166 at the close Wednesday, all the way to $146 by Thursday’s open.
Dollar Tree’s Q2 2022 Earnings
The issue was Dollar Tree beat on the top line earnings for Q2 2022 but took a big markdown on prices because of a glut of inventory, which a lot of these retailers have because margins are getting squeezed on higher gas prices… which means deliveries cost more. They also had a build-up of inventory, much like what we saw with Target, and the stock got hammered.
I do see the stock filling the gap to the upside in the next couple of weeks if we can get a bounce, so I still like it — but there are so many gaps that it’s a difficult stock to trade.
There was one phenomenon from Dollar Tree’s Q2 2022 earnings report that was my bull case for the stock this whole time… The company said it gained about 80,000 households shopping at its stores, which is exactly what I expected with inflation and as the recession works through the economy.
Check out my video above and let’s chat about Dollar Tree’s Q2 2022 earnings and my other big calls from Monday, including Thursday’s gross domestic product report, which was another contraction, though not as bad as expected.
Friday’s PCE report was also strong, so we’ll discuss what could happen next week following Friday’s Federal Reserve-induced bloodbath.
Monday’s look ahead is going to be can’t-miss with everything we have coming next week ahead of the holiday. See you then!
Are there any topics you’d like to see me cover or questions you’d like answered? Send me an email at jeff@joyofthetrade.com! And be sure to stay ahead of the markets by subscribing to our YouTube channel and our Instagram page for all of the latest!
P.S. Bank of America DOWNGRADED Life Storage. Bold Move
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