Lone Pine Capital Boosts Dollar Tree Stake By 300%

Lone Pine Capital LLC has significantly boosted its stake Dollar Tree, Inc., according to a 13G filed with the SEC. The tiger cub run by Steve Mandel held 3,892,021 shares or 1.71% of the company according to the hedge fund’s third quarter 13F. The 13G reveals that Lone Pine owns 5.2% of Dollar Tree, or 11,804,692 shares of Common Stock. Lone Pine Capital is now the fourth largest shareholder of the discount retailer.

Dollar Tree, Inc. operates discount variety stores in 48 states throughout the U.S. The company operates over 4,300 Dollar Tree stores that offer national, regional and private label merchandise at a fixed price of $1.00. The company also operates over 170 Deal$ stores that sell products at $5 or less. Dollar Tree stores are located in strip malls anchored by big box retailers in suburban locations offering a mix of consumables (48%), discretionary (47%), and seasonal (5.0%) merchandise. Dollar Tree, Inc. (NASDAQ:DLTR) was founded in 1986 and is headquartered in Chesapeake, Virginia.

CFO Kevin Wampler recently reiterated his view that  Dollar Tree, Inc. (NASDAQ:DLTR)’s soft Q3 comp store sales were tied to a stressed consumer who is uncertain about the macroeconomic picture. He also expressed the view that the company’s business model can work on a 2-3% comp store sales increase if that proves to be the new norm. Meanwhile management is focused on driving basket size with a recent impulse item initiative.

For the 39 weeks ended 27 October 2012, Dollar Tree, Inc. (NASDAQ:DLTR) revenues increased 10% to $5.15B. Net income increased 30% to $390.7M. Revenues reflect Value of Retail Sales increase of 10% to $5.15B. Net income benefited from Other income, net increase from $100K to $61.8M (income). Basic Earnings per Share excluding Extraordinary Items increased from $1.24 to $1.70.

Disclosure: No position