Dollar Tree Sees Mixed Results In Q1

Dollar Tree reported mixed results in the first quarter, with sales increasing but earnings impacted by costs and inclement weather.

In the first quarter ended May 5, consolidated net sales increased 5% to $5.55 billion from $5.29 billion in the prior year’s first quarter. Enterprise same-store sales increased 1.4%. Same-store sales for the Dollar Tree banner increased 4% while same-store sales for the Family Dollar banner decreased 1.1%.

Net income compared to the prior year’s first quarter decreased $40 million to $160.5 million and GAAP diluted earnings per share was $0.67 compared to $0.85 in the prior year’s quarter. Excluding debt refinancing costs in the current year quarter and the receivable impairment from the prior year’s quarter, diluted earnings per share improved to an adjusted $1.19 compared to an adjusted $0.98 from the prior year quarter.

Operating income for the quarter increased to $437.6 million compared with $388.8 million in the same period last year.

“Our teams worked hard to deliver top-line sales and bottom-line earnings results within our range of guidance, despite headwinds related to increasing freight costs, colder-than-normal spring weather in many parts of the country and an earlier Easter holiday,” said Gary Philbin, president and CEO, Dollar Tree. “Our Dollar Tree banner demonstrated its continued momentum in sales, delivering a 4% same-store sales increase with growth in both average ticket and customer traffic. Importantly, our Family Dollar banner delivered positive same-store sales in its consumables business. While weather impacted the discretionary side of our business in the first quarter, we have seen an acceleration in sales with warmer weather in May.”

The company estimates consolidated net sales for the second quarter of 2018 to range from $5.47 billion to $5.57 billion, based on a low single-digit increase in same-store sales for the combined enterprise. Diluted earnings per share are estimated to be in the range of $1.07 to $1.16.

Philbin added, “We are pleased with the acceleration in sales we have seen in the first several weeks of our second quarter.”