CHESAPEAKE, Va. — Dollar Tree Inc. cited continued improvement for its Family Dollar unit in posting a 3% increase in sales in the quarter to May 1.

Enterprise same-store sales increased 0.8% on a constant currency basis (or 0.9% when adjusted to include the impact of Canadian currency fluctuations), the company said.

Same-store sales for Dollar Tree increased 4.7%. Family Dollar same-store sales declined 2.8% from “a very strong 15.5% increase” in the year-earlier period. Nonetheless, the Family Dollar unit had its most profitable quarter — an operating profit of $211 million — since Dollar Tree acquired the Family Dollar banner in 2015. The Family Dollar brand continues to gain market share with its great value and compelling mix of products, the company said in its fiscal first quarter earnings statement.

“Our record first quarter performance reflects the progress we continue to make on numerous initiatives to provide even greater value and convenience to our shoppers,” said Michael Witynski, Dollar Tree’s president and chief operating officer. Dollar Tree delivered its strongest quarterly same-store sales since 2017, while improving its operating margin by 290 basis points.”

Dollar Tree is staging a new format that combines features of its two store brands and that executives believe offers significant growth potential.

The concept brings together Family Dollar’s value and assortment with Dollar Tree’s “thrill of the hunt” and fixed price point — creating a new store format that initially will be situated in small towns and rural communities with populations of 3,000 to 4,000 — markets where the company would traditionally not open a freestanding Dollar Tree outlet, though the company does operate Family Dollar stores in such locales. After analyzing the store’s performance and customer feedback, Dollar Tree refined the concept before rolling out an additional 32 such stores in the second half of 2020. It currently operates about 50 combination stores housing both Dollar Tree and Family Dollar merchandise under one roof, blurring the line between the chains.

Net income in the first quarter increased 51.3% to $374.5 million, and diluted earnings per share increased 53.8% to $1.60, compared to $1.04 in the prior year’s quarter.

During the quarter, the company opened 106 new stores, expanded or relocated 36 stores, and closed 19 stores. The company also completed 414 Family Dollar store renovations. Retail selling square footage at quarter-end was approximately 125.9 million square feet.