Dollar Tree beats profit expectations in 3Q results
Dollar Tree beat third-quarter profit expectations but just missed on sales, and provided an outlook below Wall Street estimates amid ongoing weakness at its Family Dollar unit.
Net income rose to $281.8 million, or $1.18 a share, in the quarter ended Nov. 3, from $239.9 million, or $1.01 a share, in the same period a year ago. Analysts had expected $1.14 a share.
Net sales increased 4.2% to $5.54 billion, just missing Street estimates of $5.55. Total same-store sales grew 1.0%, below expectations. Same-store sales rose 2.3% at Dollar Tree and fell 0.4% at Family Dollar.
“We delivered earnings within the range of our expectations despite continued cost pressures related to domestic freight and our investment in store wages,” Gary Philbin, president and CEO of Dollar Tree said. “Dollar Tree delivered its 43rd consecutive quarter of same-store sales growth, with increases in both customer transactions and average ticket. We are pleased with the performance of our newly renovated Family Dollar stores. Additionally, we have begun the important phase of consolidating our store support centers into our Chesapeake campus, which will improve our ability to support Family Dollar stores through enhanced collaboration, communication and teamwork.”
The discounter cut its 2018 net sales guidance range to $22.72 billion to $22.83 billion, from $22.75 billion to $22.97 billion.
During the quarter, the retailer opened 127 stores, expanded or relocated 14 stores, and closed 18 stores. Additionally, it opened 30 Dollar Tree stores that were re-bannered from Family Dollar. It ended the quarter with 15,187 stores across 48 states and five Canadian provinces. Stores operate under the brands of Dollar Tree, Family Dollar, and Dollar Tree Canada.