Dollar stores continue to enjoy sales growth during the combined pandemic and economic recession, and Dollar Tree delivered a solid second quarter as a result.
Consolidated net sales in the second quarter ended August 1 increased 9.4% to $6.28 billion from $5.74 billion in the prior year’s second quarter. Enterprise same-store sales increased 7.2%. Same-store sales for Family Dollar increased 11.6%. Dollar Tree same-store sales increased 3.1%.
Net income was $261.5 million in the second quarter and diluted earnings per share for the quarter increased 44.7% to $1.10, compared to $0.76 per share in the prior year’s quarter.
“Our store and distribution center teams have done a remarkable job of serving customers through an incredibly dynamic time in retail. Their continual efforts to ensure we are providing a clean, safe shopping experience, along with the great value and convenience our stores offer, contributed to our solid operating performance for the quarter,” said Mike Witynski, president and CEO, Dollar Tree. “The teams delivered strong same-store sales of 7.2%, a 180 basis point improvement in gross profit margin, and a 130 basis point increase in operating profit margin, despite incurring COVID-19 and civil unrest-related costs exceeding $150 million in the quarter.”
“Consumer shopping patterns are evolving. Customers are shopping with a purpose, while looking to minimize risk and exposure. As a result, we are seeing material increases in average ticket, while seeing a decline in average visits. At Dollar Tree, we were pleased to see a nice bounce back in the higher margin discretionary side of the business following Easter; and the expanded Crafter’s Square assortment continues to perform very well. At Family Dollar, we continue to gain traction as we had a material improvement in the discretionary side of the business, another quarter of double-digit same-store sales, a 390 basis point improvement in gross margin and a 470 basis point increase in operating profit margin,” Witynski added. “We will continue to manage our business with increased clarity, focus and speed to deliver the value and convenience that customers are looking for. I could not be more proud of the entire team’s commitment and efforts, and we are well-prepared for the back half of the year.”