Dollar Tree, Inc. (NASDAQ:DLTR) is the leader in discount shopping in North America that sells everything for no more than $1.00.

Prior to the stock markets opening bell, Dollar Tree, Inc. (NASDAQ:DLTR) announced their third quarter results that included a 1.6% pre-trading share price increase.  The discounted retailer posted adjusted earnings of $0.69 per share based on $2.10 billion in revenue.  During the same time period in 2013, the EPS (earnings per share) were $0.58 per share based on $1.88 worth of revenue.  Sales rose from 3.1% to 5.9% in a 12 month period.

Dollar Tree, Inc. (NASDAQ:DLTR) has estimated their fourth quarter sales to range between $2.39 and $2.46 billion with the earnings per share to be between $1.07 and $1.14.

Bob Sasser, the CEO of Dollar Tree, Inc. (NASDAQ:DLTR) stated his pleasure in the third quarter performance and says that the shelves are stocked and the team is well prepared for the upcoming holiday season.  More than 115 new store fronts have been opened this quarter.

The CEO of Dollar Tree, Inc. (NASDAQ:DLTR) recently stated that, excluding acquisition costs, the company delivered and operating margin of 11.2%.  This had been the strongest sales growth in years which reinforces their initiatives to attraction new customers and retain current ones.  The common statement heard from customers is that they are unable to believe what great merchandise they found at the Dollar Tree and for only $1.00!  The Company works hard to make shopping a fun and inexpensive experience where customers can find new treasures each week.

Especially during these difficult economic times, Dollar Tree, Inc. (NASDAQ:DLTR) offers customers products that they need at a great value.  Many name brand items can be found at your local Dollar Tree and you can find quality cleaning supplies as well as house ware items, beauty supplies, toys, party supplies, books, seasonal décor, food and much more.

This Fortune 500 Company currently operates more than 5,280 stores nationwide, including Canadian provinces.  Shopping online is also an option that is offered by Dollar Tree, Inc. (NASDAQ:DLTR) where customers can shop for bulk quantity items, extraordinary closeout deals and also get great ideas for special gifts.

Dollar Tree, Inc. (NASDAQ:DLTR) has offered to buy out their competitor, Family Dollar Stores Inc. (NYSE: FDO) for $14.3 million which will include SG&A costs.  Family Dollar has been in business for more than 50 years and it is a Fortune 300 Company that is growing in leaps and bounds by serving families in over 8,000 neighborhoods in more than 45 states in the U.S.

Family Dollar Stores Inc. (NYSE: FDO) opened at 78.70 with a 52 week outlook that ranges between 55.64 and 80.97.  They are 96% institutionally owned.

Dollar Tree, Inc. (NASDAQ:DLTR) opened the market today at 64.42 and at 9:40 a.m. Eastern Daylight Time has risen to 65.11 per share.  The 52 week outlook is between 49.59 and 65.30 with a market cap of 13.39 billion.  Currently the company is 89% inst. own.

It has happened twice that the board has said no to the offers put forward by the Dollar General Corp (NYSE:DG). It happened again when the board of Family Dollars rejected the offer and preferred their contract of worth 8.5 billion dollars, with the Dollar Tree (NASDAQ:DLTR) Inc. which is based in Virginia.

This time, Ed Garden, one of most important investors of the Family Dollar (NYSE:FDO) and a member of the board of directors (also the co-founder of the Trian Fund Management) has taken into special consideration the fact that the Dollar Tree (NASDAQ:DLTR) deal has actually removed the risk of antitrust off the scene. The company, Family Dollar (NYSE:FDO) has been seen quoting its concerns about antitrust over and over again and using it as a reason to reject the offers made by Dollar General (NYSE:DG).

Dollar General (NYSE:DG) has recently shown its willingness to let go of 1500 of its stores as an attempt to avoid the similar problems of antitrust with regulators.

According to the latest news feed from the Family Dollar (NYSE:FDO), Ed Garden has said that the attempts of a hostile takeover by the Dollar General (NYSE:DG) will not meet its successful end because he believes that the regulators will look at the antitrust issues and will reject it straight away.

Dollar General (NYSE:DG) has declared that their offer is valid for a limited time only and the validity of their offers will expire on the 8^th of October at 5 in the evening unless there is some extension in the proposal. The company, Dollar Genera (NYSE:DG), has also declared that is will quickly file applications to start on the procedure with Federal Trade Commission for the approval of antitrust.

Currently the company, Dollar General (NYSE:DG), is putting forward an offer according to which the price of each share of Family Dollar (NYSE:FDO) will be eighty dollars. On the other hand Family Dollar (NYSE:FDO) is being offered a price of 74.50 dollar for each share by another company, aka Dollar Tree (NASDAQ:DLTR). It is believed that about 80 percent of the payment will be in cash and the remaining will be in stocks.

A variety store chain in America with as many as 8100 locations, Family Dollar (NYSE:FDO) is considered as the retailer that holds second place when it comes to the size. With its headquarters in Matthews, North Carolina, this company has 1400 people as its employees.  It is a public company that has food, housewares and clothing as their main products. The company generated revenue of 10.4 million dollars last year where as its operating income was 688 million dollars.

The discount store chain, Dollar General’s (NYSE:DG), deal didn’t go through because it wouldn’t clear the anti-trust faction scrutiny. The North Carolina based company based in Matthews, Family Tree (NASDAQ:DLTR) is pretty vocal that it fears the anti-trust group posing a lot of question directed towards them merging with Dollar General (NYSE:DG).

However, so bent upon acquisition are they that the willingness to divest 1500 stores is an option they are willing to consider. Not only that but Dollar General (NYSE:DG) is also ready to pay $500 reverse backup fees in more antitrust issues get in the way of its takeover plan.

The Goodlettsville, Tennessee based company, Dollar General (NYSE:DG) is bound to win this acquisition tug of war, speculates the analyst Sterne Agee. He thinks that the offer presented to family Dollar (NYSE:FDO) is a solid offer making good financial sense. Family Dollar (NYSE:FDO) is not in a great situation and has still received good bids from two companies willing to buy it out. They are desperately attempting to attract more and more customers and has been cutting prices considerably, however they were still forced to shut down some of its stores.

June this year, Family Dollar’s (NYSE:FDO) activist investor, Carl Icahn forced the company to sell itself out. In July, Family Dollar (NYSE:FDO) accepted the rival bid of $59.6 in cash, $14.90 in Dollar Tree (NASDAQ:DLTR) shares amounting to a total of $74.5 for each share being held. Family Dollar (NYSE:FDO) is sure that this deal will not face any anti-trust hurdles.

The similarity which will raise an eyebrow from anti-trust is the fact that both Dollar General (NYSE:DG) and Family Dollar (NYSE:FDO) sell products which fall into different price categories. Dollar Tree (NASDAQ:DLTR) however, only sells products costing a dollar.

Rick Dreiling, Dollar General (NYSE:DG) CEO and Chairman, tempted the shareholders of family Dollar (NYSE:FDO) by stating that if they choose their bid Family Dollar (NYSE:FDO) shares would get an immediate liquidity boost. The strategy was based on the hope that all Family Dollar (NYSE:FDO) shareholders would opt for the Dollar General (NYSE:DG) bid, putting pressure on the Family Dollar (NYSE:FDO) management and board of directors.

October 8 will mark the expiry of the bid from Dollar General (NYSE:DG)which was originally priced at $78.5 per share, now includes a 32% premium for the family Dollar (NYSE:FDO) stock. The day the Dollar Tree (NASDAQ:DLTR) deal was announced, Family Dollar’s (NYSE:FDO) share price reduced by 13 cents when trading in July. Earlier this month their stock price hit an all-time high record of $80.97.

Seems that this financial war has momentarily solved their problems of reduced foot traffic; the shareholders would focus on the operational problems of the company once the sale of the company goes through.

This isn’t the first rejection, an earlier offer was rejected by Family Dollar (NYSE:FDO) from Dollar General (NYSE:DG) which amounted to around $9 billion, which was then increased to $9.1 billion. The largest dollar-store of the nation – Dollar General(NYSE:DG)  – revised the proposal as well in order to increase stores that it will divest willingly in the future and also included $500 million of reverse for break-up if antitrust issues surfaced.

This Friday, Family Dollar (NYSE:FDO) stated its antitrust concerns. However, Dollar General (NYSE:DG) refrained from an immediate response to the email that was sent to it.

Ever since its financial crises Family Dollar (NYSE:FDO) has been actively looking cutting prices and closing stores. Carl Icahn, a major shareholder, encouraged Mathews – a company based in North Carolina – in June, to go up for grabs.

After a month, Family Dollar Stores (NYSE:FDO) grabbed a deal with Chesapeake which is a Dollar Tree (NASDAQ:DLTR) based in Virginia for $8.5 billion. The purchase included cash amounting to $59.60 and equal to $14.90 shares of the Dollar Tree Company (NASDAQ:DLTR) for every share owned. The value of the transaction by the companies was $74.50 per share at the time of the deal. While including other costs and debt, Dollar Tree (NASDAQ:DLTR) and Family Dollar (NYSE:FDO) reported the deal’s worth to be around $9.2 billion. Both the companies stated on Friday that they were expecting the deal to go through by the end of November at the latest.

Three days after the announcement of divesting of 1,500 stores came from Dollar General (NYSE:DG), Dollar Tree (NASDAQ:DLTR) gave its consent to get on with the deal and get it finalized. The original deal included Dollar General (NYSE:DG) divesting only 700 stores.
CEO of Dollar Tree (NASDAQ:DLTR), Bob Sasser reported in one of his statements that he thinks the company may have to divest only a few of the stores since it has a different business model compared to Family Dollar (NYSE:FDO). He said that their pricing as well as assortment of products is not affected by the competition offered by local stores and that they have limited overlapping of stores.

Both the Dollar General (NYSE:DG) and Family Dollar stores (NYSE:FDO) operate on a model that is a bit different than Dollar Tree (NASDAQ:DLTR). Both of the former sell products at different prices whereas Dollar Tree (NASDAQ:DLTR) sells items a buck rate. Both companies expect the Federal Trade Commission to ask for more details (second request) regarding the transaction on Monday.
Family Dollar (NYSE:FDO) had to see its stock drop by $1.05 that came to stand at a value of $79.01 in Friday’s morning session. Shares of Dollar Tree (NASDAQ:DLTR) went up by 16 cents reaching a value of $55.18.

Just a few days ago, the chief executive officer of Dollar General, Rick Dreiling, offered to purchase Family Dollar for $9 billion in cash. Currently, Dollar General leads the race in market share in the United States, while Family Dollar holds its position at a close second.

This attempted merger was an effort to push out the smaller competing corporations, including Dollar Tree Inc (NASDAQ:DLTR) who signed a deal to buyout Family Dollar about three weeks before Dollar General made its deal. Family Dollar’s management board stated earlier this week that it would look over and discuss the offer made by Dollar General, which valued the company’s shares at $78.50 per share. However, it seems that it isn’t likely for a deal to happen between the two companies because Family Dollar continued to recommend investors and shareholders to vote for its deal that valued its shares at $74.50 per share with Dollar Tree.

Neither Family Dollar nor Dollar Tree responded to requests for comments.

Mr. Dreiling from Dollar General expressed his surprise over Dollar Tree’s offer for Family Dollar in July, but he has put those events behind him. Dreiling stated that he wished to get the deal with Family Dollar done as soon as possible.

Dreiling also stated that when he met with Mr. Levine from Family Dollar to discuss about the potential merger, Mr. Levine did not mention to him that he was in talks with Dollar Tree about a possible deal then. Dreiling stated that Levine failed to make it known that there was any urgency to act or that the company had other offers on the table.

Dreiling also said that Dollar General has shown its interest in a merger with Family Dollar on multiple occasions, in which Levine reciprocated the enthusiasm and showed his own interest in the social issues of a merger, including his desire to be chief executive officer of the combined companies. Dreiling states that he is wondering if Dollar General does not meet those desires, would Levine pursue a deal with Dollar Tree instead.

A few days ago, Carl Icahn published a criticism piece of Family Dollar’s Levine. Icahn was the activist investor who campaigned publicly and strongly encouraged Family Dollar to put itself up on the market for sale.s

Icahn sold his stake in Family Dollar after Dollar Tree announced its bid for Family Dollar. However, the billionaire investor still commented on the internal logistics behind Family Dollar’s negotiating moves. He said that Family Dollar will likely embrace the deal with Dollar Tree because that would allow the chief executive officer Mr. Levine to retain his current position.

Mr. Icahn said that it was surprising that Family Dollar is willing to agree to a $305 million breakup fee to Dollar Tree before making sure that Dollar General was out of the game. He expressed his distaste for how far executive boards will go to protect the company’s chief executive officer at the expense of shareholders.

Increase in Revenues

The consensus estimate from analysts is that Wal-Mart will pull revenues of $119 billion for this quarter, which would be an increase of 1.8 percent from the $116.9 billion posted in the same quarter one year ago. The company believes that its same-store sales in the United States will show little to no growth during the second quarter in 2015. This means that the company will have improved during the second quarter of 2014. This quarter, comparable store sales have declined by 0.3 percent as well.

Last quarter, the retail sector in the United States shows significant improvement. Sales were expected to improve even further due to the sales driven by the Fourth of July weekend. However, the majority of the improvement in sales was attributed to the increasing preference for online shopping, which shows that traffic to physical stores are declining.

For Wal-Mart, the lack of foot traffic is a major issue. The company pulls roughly 95 percent of its sales through sales from its physical stores. Also on the hot plate are stores like Target Corp (NYSE: TGT) and Bed, Bath & Beyond Inc (NASDAQ: BBBY), both of which also generate 95 percent of their revenue from physical store sales and are feeling the squeeze.

In an effort to capture more shares of the market and increase its sales figures, Wal-Mart has executed a new plan to open smaller stores in certain neighborhoods in the United States, such as the Wal-Mart Neighborhood Market stores. This plan could yield profitable results for the company, which typically does not focus on catering to locality based customers. So far, the retail giant is operating thirteen Neighborhood Markets, and plans to open several more small stores and Supercenters in 2015. By opening smaller stores, Wal-Mart increases its accessibility for customers, and could increase the company’s revenues.

Wal-Mart has also made considerable efforts to expand its customer base in the United States through expansion. However, it may need to redesign its strategy at the threat of competing stores like Dollar Tree Inc (NASDAQ: DLTR) and Family Dollar Stores Inc (NASDAQ: FDO).

Wal-Mart’s Bottom Line Could Plummet

While the retail giant’s revenues have the possibility of increasing, its earnings could fall. For this quarter, the company predicts that it will hit a earnings per share range of $1.15 to $1.25, which means that its EPS dropped 3.2 percent year over year.

Costs could rise, due to the company’s investments in e-commerce, the membership programs of its discount warehouse store Sam’s Club, and the increasing health care costs in the United States.

However it is important to note that the company has a history of buying back shares Last quarter, Wal-Mart spent $626 million to repurchase 8 millions shares. Further share buybacks could give the company some leeway in its earnings per share.

Conclusion

As Wal-Mart prepares to announce its earnings report, investors will be eagerly waiting to see how the compare does in the second quarter. While it is preparing to release a mixed report with growing revenues but shrinking earnings, investors are still attracted to the company due to its considerable generation of free cash, share buybacks, and dividend payouts.