12 Cheap Retail Stocks to Buy According to Hedge Funds

5. Dollar Tree, Inc. (NASDAQ:DLTR)

Forward P/E: 13.63

Number of Hedge Fund Holders: 40

Dollar Tree, Inc. (NASDAQ:DLTR) operates discount department stores and offers a wide range of merchandise under the brand names Dollar Tree and Dollar Tree Canada. Family Dollar stores offer home products, consumable merchandise, accessories and apparel, electronics, and seasonal merchandise.

The company reported a revenue of $7.56 billion in fiscal Q3 2024, exceeding the forecast of $7.446 billion.  Its net sales also grew significantly, primarily due to its non-comparable stores. This growth was attributed to the company’s continued merchandising efforts for Family Dollar and Dollar Tree. Despite some macroeconomic challenges, Dollar Tree, Inc. (NASDAQ:DLTR)  is maintaining strong operational results.

The company is focusing on boosting the growth of its Dollar Tree brand and is converting stores to its in-line multi-price 3.0 format. It is opening new stores and improving the in-store experience for its customers through customer service enhancements and renovations. In fiscal Q3 2024, the company converted another 720 stores to the 3.0 format, bringing the total number of converted Dollar Tree stores to around 2,300. These stores produced around 30% of the company’s total net sales in fiscal Q3 2024. The company has a forward P/E of 13.63 and is trading at a 14.94% discount to its sector.