Here’s why Dollar Tree is trading high on Wednesday

Dollar Tree, Inc. (NASDAQ: DLTR) is back in the news as its shares pop 16% on Wednesday. The group’s board of directors has increased the company’s share repurchase authorization to an overall amount of $2.5 billion, which is an increase of $1.05 billion. In addition, according to reports, $1.45 billion is available for repurchases under the board’s previous repurchase authorization approved on March 2, 2021.

Delivering value to customers and shareholders is the group’s top priority

Taking to social media Twitter, Michael Witynski, President and Chief Executive Officer of Dollar Tree, said:

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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. In fiscal 2021, we have repurchased $950 million of shares. Over the past several years, we have paid down more than $4 billion in debt and returned to an investment grade rating. As a result, with the meaningful free cash flow from our business, we expect to maintain share repurchasing as an important part of our capital allocation strategy.

Ambitious plans to increase store strength

Dollar Tree has gone on record and stated that the company is doing well in 2021. Furthermore, the group targets to have 500 Dollar Tree Plus stores by fiscal year-end. The stores will offer products in the $1, $3, and $5 price range.

Besides this, the group plans to inaugurate another 1,500 stores during the financial year 2022. If all falls in place by the end of fiscal 2024, the company will have 5,000 Dollar Tree Plus stores operational.

The group has reported success in the new combo store model. Presently, the group has as many as 105 Combo Stores operational and targets adding 400 Combo Stores in 2022. According to reports, the group is planning to increase the strength of its Combo Stores to 3,000 in the forthcoming years.