Family Dollar unit sees comp store sales decline

CHESAPEAKE, Va. — Dollar Tree Inc. reported a 4.2% increase in consolidated net sales, to $5.54 billion, for its fiscal 2018 third quarter. Same-store sales for the company increased 1%, and net income increased 5.1% to $281.8 million.

“We delivered earnings within the range of our expectations despite continued cost pressures related to domestic freight and our investment in store wages,” Dollar Tree president and chief executive officer Gary Philbin said in a statement on Thursday. “Dollar Tree delivered its 43rd consecutive quarter of same-store sales growth, with increases in both customer transactions and average ticket.”

Same-store sales increased 2.3% in the Dollar Tree chain for the 13 week period ended November 3, but declined by 0.4% in the Family Dollar stores. The company said it expects the performance of the Family Dollar stores to improve as it moves ahead with a store optimization program. Since completing the acquisition of Family Dollar in July 2015, the company has opened 830 new Family Dollar stores, remodeled 865 Family Dollar stores, and converted 354 Family Dollar stores to the Dollar Tree brand. It has also closed 195 Family Dollar stores.

“We are pleased with the performance of our newly renovated Family Dollar stores. Additionally, we have begun the important phase of consolidating our store support centers into our Chesapeake campus, which will improve our ability to support Family Dollar stores through enhanced collaboration, communication and teamwork.”

The company said it will be accelerating its store optimization program, and currently expects to renovate a minimum of 1,000 Family Dollar stores in fiscal 2019. The company plans to open 350 new Dollar Tree and 200 new Family Dollar stores in fiscal 2019, and also plans to re-bannering an additional 200 Family Dollar stores to Dollar Tree stores.

“Through the hard work we have done over the past three and a half years, we have put in place the foundational elements that we need to be successful over the long term,” said Philbin. “We are now accelerating our program to optimize our fleet of Family Dollar stores to improve the customer experience and accelerate our growth. We are confident that our testing has resulted in creating models for renovations that are effective in both urban markets and rural communities, and when we look across the country, we see a tremendous opportunity ahead of us.”