Dollar Tree Makes Post-Merger Strides In Q3

The continued integration of Family Dollar seems to be paying off for Dollar Tree, which reported positive results for its third quarter.

In the third quarter ended October 29, Dollar Tree recorded earnings of $171.6 million, or 72 cents per diluted share, versus $81.9 million, or 35 cents per diluted share, in the year-earlier period. Adjusted for one-time charges, diluted earnings per share were 81 cents, which surpassed a MarketBeat-published analyst average estimate of 78 cents.

Comparable store sales advanced 1.7%, on a constant currency basis. Net sales increased 1.1% to $5 billion while operating income was $342.4 million versus $223.7 million in the quarter a year before. Dollar Tree division sales were $2.47 billion versus $2.27 billion in the year-previous quarter, and Family Dollar sales were $2.53 billion versus $2.67 billion in the 2015 period.

In the 2015 quarter, Dollar Tree pointed out, selling, general and administrative expenses included merger-related costs of $11.8 million.

Bob Sasser, Dollar Tree CEO, stated, “I am proud of our team’s achievements in our third quarter. Our results demonstrated a solid performance in our Dollar Tree segment, continued meaningful progress in our integration of Family Dollar and our ability to refinance and pre-pay a portion of our outstanding debt in order to reduce future interest costs. After adding back nine cents per share of expenses related to our debt refinancing, our operating performance of 81 cents per diluted share was near the top end of our third quarter EPS guidance range of 76 cents to 82 cents.”

Dollar Tree opened 153 stores in the third quarter, expanded or relocated 39 stores and closed 10 stores. As part of its re-banner initiative, the company converted 42 former Family Dollar locations in the quarter and opened them as new Dollar Tree stores. The company operates 14,284 stores across 48 states and five Canadian provinces.