Dollar Tree’s turnaround plans for its Family Dollar business seem to be paying off, as the retailer reported improved results for its second quarter.
Consolidated net sales increased 3.9% to $5.74 billion from $5.53 billion in the prior year’s second quarter. Enterprise same-store sales increased 2.4%. Same-store sales for the Dollar Tree segment increased 2.4%. Same-store sales for the Family Dollar segment increased 2.4%.
Net income was $180.3 million in the second quarter and GAAP diluted earnings per share for the quarter were $0.76 compared to $1.15 in the prior year’s quarter.
Gary Philbin, president and CEO, Dollar Tree, said “The turnaround of the Family Dollar business continues to gain momentum. Family Dollar’s same-store sales increase of 2.4% was the third consecutive quarter of sequential acceleration and represented a 160 basis point improvement in the two-year stacked comp. And, despite sales headwinds created by the global helium shortage, the Dollar Tree segment delivered a same-store sales increase of 2.4%, while cycling a strong 3.7% increase from the prior year’s quarter. Dollar Tree has now delivered 46 consecutive quarters of positive same-store sales, and eight consecutive quarters with two-year stacked comps exceeding 6%. I am proud of the team’s accomplishments. During the quarter, we successfully consolidated our store support centers and, as planned, closed 296 Family Dollar stores as part of our store optimization efforts. Additionally, we completed 542 Family Dollar renovations into the H2 format.”
In addition to the store closings, the company opened 106 Dollar Tree stores that were re-bannered from Family Dollar.
“I am very pleased with the traction and momentum we are seeing in the Family Dollar business. The team’s efforts to improve the consistency of execution across the store base and our acceleration of initiatives to optimize the real estate portfolio are paying off. We are increasing our planned Family Dollar H2 renovations for fiscal 2019 by 150 stores, most of which will occur in the third quarter,” Philbin added.