It would be easy to doubt that Dollar Tree (NASDAQ:DLTR) has a highly compelling, post-COVID-19 future. Not only is the discount retailing space already crowded by the likes of Dollar General (NYSE:DG) and Big Lots (NYSE:BIG), the venerable Walmart (NYSE:WMT) is always a challenging competitor. There's also the prospect of a rebound from the nationwide economic lull, which can push consumers out of a value-oriented mindset into a more premium-minded spending mode. Throw in the relatively modest e-commerce shopping options its Family Dollar and Dollar Tree brands are able to offer, and most investors may decide to look elsewhere for opportunities.

That would be a mistake, however, especially right now. Although the stock's current price is more or less where it was three years ago, Dollar Tree has never had much of a problem driving steady sales growth. A pandemic -- or lack thereof -- doesn't seem to be a major factor, for good or ill.

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Steady growth

That's not to suggest Dollar Tree hasn't been impacted by the COVID-19 pandemic. It has, mostly for the better. Last quarter's sales grew 7.5% year over year, with average same-store sales (led by Family Dollar) up 5.1%. Revenue through the first three quarters of 2020 is higher to the tune of 8.4%, resulting in double-digit profit growth. Dollar Tree and Family Dollar stores offered lower-cost shopping options in the midst of the pandemic just as well as Walmart and Dollar General did.

Except, much of that sales and earnings growth was probably going to happen anyway.

The graphic below tells the tale, plotting the retailer's quarterly sales and per-share earnings all the way back to 2016.

Dollar Tree has steadily grown sales and earnings before and during the pandemic. That should last once COVID-19 is gone.

Data source: Thomson Reuters. Chart by author.

Just as important as Dollar Tree's reliable past are forecasts of the same sort of growth into the future. Analysts expect more of the same, and for good reason.

More than just a store

Not every investor is as optimistic as analysts are, for understandable reasons.

As was noted, the discount retailing arena is getting quite crowded. Dollar General operates more than 17,000 stores in the U.S., and just unveiled a slightly higher-end concept store called popshelf aimed at more affluent urban areas. Dollar Tree owns more than 15,000 stores between its Family Dollar and Dollar Tree brands, while the Big Lots chain is more than 1,400 stores strong. For perspective, there are more than 4,700 Walmart stores peppered across the U.S. landscape.

That's a lot of accessible choice for the nation's consumers; the need for more is questionable.

It would also be naive to pretend a retailer that doesn't sell any item for more than $1 isn't somewhat limited. Dollar Tree stores have to do a lot of volume on a shoestring budget.

But this particular retailer can institute more strategic initiatives than would be expected for such a simple company. For example, it's experimenting beyond Dollar Tree stores' $1 price point roots. It rolled out a pilot program called Dollar Tree Plus! at more than 100 stores around the middle of last year, which offers goods at price points of $3 and $5 as well. The response has been encouraging enough to prompt plans to expand the program to 500 stores early next year.

Also, though it's older news that's since been buried by political and pandemic headlines, in early 2019 Dollar Tree initiated a turnaround plan for its Family Dollar division that included a meaningful investment in the business. This overhaul included a $1 billion investment in store renovations that create a "wow" factor for the shopper, as well as tough decisions like closing nearly 400 Family Dollar stores that couldn't be salvaged. The 2,240 Family Dollar stores that have already undergone renovations saw measurable sales growth, and Dollar Tree intends to renovate another 1,250 Family Dollar stores next year.

Point being, don't let the apparent cookie-cutter nature of the business fool you. There are lots of ways each of these discounters can differentiate themselves and drive growth.

Unexpectedly more room to grow

Market saturation remains a legitimate concern. The country only needs so many consumer goods stores. It would also be nice to see Family Dollar's omnichannel capabilities improve as well, even if Dollar Tree's never going to become an e-commerce powerhouse. Although the pandemic will eventually end, the swell of preference for online shopping probably won't abate -- at least not back to pre-COVID-19 levels.

Still, this company has carved out a nice piece of the brick-and-mortar retailing market, offering convenience, speed, and price among its core shoppers -- lesser-income consumers who aren't necessarily interested in shopping online or even making the trip to a more distant Walmart. If their shopping habits haven't changed yet, they're probably not going to now.

At the same time, dollar stores as a group have shaken off most of their old stigma and are starting to appeal to consumers in higher-income brackets. Thinknum Media determined last year there are now more dollar stores located in middle-income zip codes than low-income and high-income zip codes combined. Moreover, market research outfit NPD estimates that around a fifth of the nation's dollar store revenue comes from households with annual incomes of more than $100,000.

These subtle shifts suggest the dollar store industry -- including Dollar Tree -- has plenty of growth opportunities ahead, no matter what the future looks like.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.