While below Wall Street estimates, Dollar Tree produced positive fourth quarter and fiscal year results, with sales increasing and earnings benefiting from the government tax reform.
Consolidated net sales for the fourth quarter increased 12.9% to $6.36 billion from $5.64 billion in the prior year’s fourth quarter. Enterprise same-store sales increased 2.4% on a constant currency basis. Same-store sales for the Dollar Tree banner increased 3.8% while same-store sales for the Family Dollar banner increased 1%.
Net income compared to the prior year’s fourth quarter increased $718.3 million to $1.04 billion and diluted earnings per share increased to $4.37 compared to $1.36 in the prior year’s quarter.
For the fiscal year, consolidated net sales increased 7.4% to $22.25 billion from $20.72 billion in the prior year. Enterprise same-store sales increased 1.9% on a constant currency basis. Same-store sales for the Dollar Tree banner increased 3.4% on a constant currency basis while same-store sales for the Family Dollar banner increased 0.4%.
Net income increased to $1.71 billion from $896.2 million in the prior year, and diluted earnings per share increased to $7.21, compared to $3.78 in the prior year. Included in net income is a benefit of $583.7 million related to the federal tax reform. Adjusted earnings per share for the year was $4.86.
The company noted that it benefited in the fourth quarter and fiscal 2017 with respect to the federal tax reform. The company expects to continue to benefit going forward and currently estimates the benefit to be approximately $250 million for fiscal 2018. As a result of the estimated cash benefit, the company plans to invest approximately $100 million in store and employee initiatives.
Gary Philbin, president and CEO, Dollar Tree, stated, “For the quarter, we posted positive same-store sales in our Dollar Tree and Family Dollar banners, while improving gross margin and leveraging costs. For the year, we opened 603 new stores, exceeded $22 billion in sales and improved our operating margin by 80 basis points.”