Dollar Tree reported a modest same-store sales increase for the first quarter as the company continued with its plan to integrate Family Dollar stores.
Sales at Dollar Tree stores open at least a year were up 2.3%, which company officials said were driven by increases in customer transactions and average ticket.
Consolidated net sales increased 133.6% to $5.09 billion from $2.18 billion in the prior year’s first quarter. The $2.91 billion increase included $2.7 billion in sales from Family Dollar stores.
“I am very pleased with the company’s performance in the first quarter,” said Bob Sasser, Dollar Tree CEO. “Through what continues to be a challenging economic environment, we delivered sales at the mid-point of our guidance range, and earnings that exceeded the high end of our guidance range. Additionally, while not included in our comp calculation, our Family Dollar segment delivered its third consecutive quarter of positive same-store sales.”
Operating income increased 79.9% to $418.7 million compared with $232.8 million in the same period last year. This increase is the result of $138 million of operating income in the Family Dollar segment and a $47.9 million increase in operating income in the Dollar Tree segment.
Net income compared to the prior year’s first quarter increased $163.2 million to $232.7 million, and diluted earnings per share increased by 188.2% to $0.98. Excluding the current quarter one-time tax benefit and acquisition-related costs from the prior year quarter, diluted earnings per share increased 25.4%, to $0.89 from $0.71.
Sasser said Dollar Tree’s integration of Family Dollar remains on schedule.
During the quarter, the company opened 171 stores, expanded or relocated 66 stores, and closed 19 stores. Additionally, as part of its re-banner initiative, the company opened three former Family Dollar store locations as new Dollar Tree stores. The company also converted 126 Deals stores to Dollar Tree stores and converted nine Deals stores to Family Dollar stores. Dollar Tree operates 13,997 stores across 48 states and five Canadian provinces.