In a coronavirus-impacted first quarter, Dollar Tree saw a rise in its overall comparable store sales with Family Dollar leading the way.
Consolidated net sales in the first quarter ended May 2 increased 8.2% to $6.29 billion from $5.81 billion in the prior year’s first quarter. Enterprise same-store sales increased 7%. Same-store sales for Family Dollar increased 15.5%. Dollar Tree same-store sales decreased 0.9%.
Operating income for the quarter was $365.9 million compared with $385.5 million in the same period last year. The first quarter of 2020 included incremental operating costs of $73.2 million, or $0.23 per diluted share, for COVID-19 related expenses, which included wage premiums paid to hourly store and distribution center associates, and safety and sanitization supplies.
Net income was $247.6 million in the first quarter and diluted earnings per share for the quarter were $1.04 compared to $1.12 per share in the prior year’s quarter.
“I am extremely proud of the team’s extraordinary efforts to serve customers through what has been an incredibly tumultuous time,” said Gary Philbin, CEO, Dollar Tree. “After a relatively normal first month in the quarter, our stores experienced an unprecedented spike in demand for certain products in March. The teams quickly rose to the challenge to make our stores safer for associates and customers by following CDC guidelines, along with enhanced cleaning protocols. We were focused and dedicated to delivering essentials to customers when they needed us most.”
Looking forward, the company now expects to complete approximately 750 Family Dollar H2 renovations in fiscal year 2020 compared to its original expectation of 1,250. The company now expects to open 500 new stores in fiscal 2020 (consisting of 325 Dollar Tree and 175 Family Dollar), compared to its original plan of 550 new stores (consisting of 350 Dollar Tree and 200 Family Dollar). The timing for completion of new store openings is also expected to be deferred.
“Following a volatile sales environment in the first quarter, I am extremely pleased with the momentum we are seeing in our business early in the second quarter. At Family Dollar, we are seeing continued sales strength with improvements in our discretionary categories. For Dollar Tree, we have seen a rebound on the discretionary side of the business following the Easter holiday, especially in crafts, graduation, stationery, Mother’s Day seasonal and balloons,” Philbin added.