Same-store sales rose for Dollar Tree, Family Dollar
“Our team delivered terrific results in the third quarter,” Dollar Tree president and chief executive officer Gary Philbin said in a statement. “Same-store sales accelerated in both the Dollar Tree and Family Dollar banners; we delivered a 120 basis point improvement in enterprise operating margin; and earnings per share grew more than 40% from the prior year. Our third quarter results demonstrate our continuing progress in delivering value and convenience, serving more customers in more markets across North America, through our diversified business model.”
The company reported that consolidated net sales increased 6.3% to $5.32 billion, and same-store sales increased 3.2% (3.3% when the effect of Canadian currency fluctuation is factored in). Same-store sales were up 5% for the Dollar Tree banner and 1.5% for the Family Dollar banner.
Gross profit increased 9.6% to $1.67 billion compared to $1.52 billion in the prior year’s third quarter. Gross margin increased to 31.3% of sales, up from 30.4% in the prior year, with the 90 basis point improvement due to lower merchandise costs, fewer markdowns and decreased occupancy costs as a percentage of sales.
Net income $239.9 million — up $68.3 million compared to the prior year period — and diluted earnings per share increased 40.3% to $1.01.
During the quarter, the company opened 169 stores, expanded or relocated 23 stores, and closed six stores. Dollar Tree ended the quarter with about 115.8 million square feet of retail space.
Looking ahead, Dollar Tree is upbeat about the fourth quarter and the year.
The company estimates that consolidated net sales for the fourth quarter will range from $6.32 billion to $6.43 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 $1.80 to $1.89.
Consolidated net sales for the full fiscal year are now expected to range from $22.20 billion to $22.31 billion, up from the company’s previously expected range of $22.07 billion to $22.28 billion. The company has also raised its guidance on net income per diluted share for the full-year fiscal 2017 to between $4.64 and $4.73, up from its previous guidance of between $4.44 to $4.60.
“Our stores and teams are well-prepared and energized as we enter the fourth and final quarter of 2017,” Philbin said. “We are confident in our ability to continue driving positive same-store sales, through meeting our customers’ needs and wants; improving enterprise operating margin; and delivering year-over-year earnings per share growth. We believe we are well-positioned in the most attractive sector in retail and will remain intensely focused on delivering great value and convenience to our growing customer base. Both banners are ready for the holiday season, and we have an experienced leadership team, momentum in our business and a continued focus on this transformational opportunity.”