Benzinga | May 26, 2021 10:22AM EDT

Earnings Outlook for Dollar Tree

Dollar Tree (NASDAQ:DLTR) releases its next round of earnings this Thursday, May 27. Here is Benzinga's essential guide to Dollar Tree's Q1 earnings report.

What Are Earnings, Net Income, And Earnings Per Share?

Earnings and especially earnings per share (EPS) are useful measures of a company's profitability. Total earnings, which is also referred to as net income, equals total revenue minus total expenses. EPS equals to net income divided by the number of shares outstanding.

Earnings And Revenue

Dollar Tree EPS will likely be near $1.4 while revenue will be around $6.41 billion, according to analysts. In the same quarter last year, Dollar Tree reported EPS of $1.04 on revenue of $6.29 billion.

Why Analyst Estimates And Earnings Surprises Are Important

Wall Street analysts who study this company will publish analyst estimates of revenue and EPS. The averages of all analyst EPS and revenue estimates are called the "consensus estimates"; these consensus estimates can have a significant effect on a company's performance during an earnings release. When a company posts earnings or revenue above or below a consensus estimate, it has posted an "earnings surprise", which can really move a stock depending on the difference between actual and estimated values.

If the company were to match the consensus estimate when it reports Thursday, EPS would be up 34.62%. Revenue would be up 1.96% on a year-over-year basis. Here is how the company's reported EPS has compared to analyst estimates in the past: Quarter Q4 2021 Q3 2020 Q2 2020 Q1 2020EPS Estimate 2.11 1.15 0.92 0.91EPS Actual 2.13 1.39 1.10 1.04Revenue Estimate 6.79 B 6.12 B 6.22 B 6.11 BRevenue Actual 6.77 B 6.18 B 6.28 B 6.29 B

Stock Performance

For a full 12 months, the return has risen by 10.11%. Given that these returns are generally positive, long-term shareholders are probably relaxed going into this earnings release. Long-term shareholders are already enjoying 12-month gains prior to the announcement.

Do not be surprised to see the stock move on comments made during its conference call. Dollar Tree is scheduled to hold the call at 09:00:00 ET and can be accessed here.