Dollar Tree (NASDAQ: DLTR), the US chain of discount variety stores, has been trading around the $99.60 level as of Wednesday market open, showing a substantial rise of around 15% in the last 24 hours.
The Fortune 200 Company that dominates the US discount market has firm foundations across the US and Canada, with 15,865 stores stretching across 48 states and five provinces in Canada. A family favourite for many, for others it’s just another high-street chain spreading like wildfire across its consumer landscape.
As of Wednesday, Dollar Tree stock is on the sharp rise following a decision from the Board of Directors to increase the company’s share repurchase authorisation by almost double. With an extra $1.05 billion now totalling an accumulative $2.5 billion, the total also includes $1.45 billion available for repurchases under previous authorisation that was granted earlier this year.
Michael Witynski, President and CEO of Dollar Tree believes the share repurchasing is critical to the growth strategy and the economic welfare of Dollar Tree shareholders:
“Delivering value to our customers and shareholders is our top priority. We are committed to a disciplined capital allocation strategy that balances returning capital to our shareholders and investing in our business for growth”
However this wasn’t the only change for Dollar Tree investors this week; a further decision was made to move ahead with a price hike across some of its stores – meaning that the retailer would start selling products above the $1 mark.
The price re-evaluation has been a result of an ill-timed blend of supply-chain difficulties and continued inflation, hence Dollar Tree has been forced to react to the market squeeze by lifting the lid on it’s $1 price cap.
Or, In the words of Witynski, “We recognize the need to make adjustments in the current economic environment”
Dollar Tree stock currently sits around $99.60 showing an impressive 15.5% gain. However, the price has seen an overall plunge of 20.1% for the current year to date.
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