Dollar Tree Rises After Beating Estimates


Dollar Tree Inc (NASDAQ: DLTR)

Specialty discounter Dollar Tree announced financial results for its fiscal fourth quarter and full year ended Feb. 2 before the opening bell on Wednesday. The company beat expectations on both top and bottom lines during the quarter, but said that it will close as many as 390 Family Dollar Stores in 2019 and re-brand 200 others to become Dollar Tree Stores.

Shares of the Chesapeake, VA-based discount retailer were up $4.06, or 4.25% to 99.53 as of 1:52 p.m. in New York. The stock has risen 10.35% since the of the year.

DLTR Earnings & Outlook

Dollar Tree came out with fourth-quarter net loss of $2.31 billion, or $9.66 per share, compared with earnings of $691.5 million, or $4.37 per share, in the same period last year. The company attributed the loss to a $2.73 billion goodwill impairment charge related to the Family Dollar business acquisition in 2015.

Earnings, adjusted for items, came to $1.93 per share, surpassing Refinitiv consensus of $1.92 per share. The discount retailer posted revenue of $6.21 billion in the quarter, compared with $6.36 billion in the earlier-year period.

On average, analysts had called for revenue of $6.19 billion, based on figures compiled by Refinitiv. Comparable store grew 2.4% beating estimates of 1.4% by Wall Street.

Looking ahead, the company expects earnings of between $1.05 to $1.15 per share on revenue of $5.74 billion to $5.85 billion for the current quarter. For the full year, Dollar Tree views expects earnings to be in the region of $4.85 to $5.25 per share on revenue of $23.45 billion to $23.87 billion.

Analysts model first-quarter earnings of $1.30 per share on revenue of $5.81 billion. For the full year, analysts view earnings of $5.78 on revenue of $23.89 billion.

Dollar Tree CEO Comments

“Sales for the quarter were strong,” stated Gary Philbin, President and Chief Executive Officer. “Our results demonstrate the increasing strength of the Dollar Tree brand, and accelerated progress on the Family Dollar turnaround, as Family Dollar delivered its strongest quarterly same-store sales growth of the year.”

Philbin continued, “We are confident in our progress and we have good momentum. Our merchants at both banners have delivered a 2019 plan that we believe overcomes most of the effect of tariffs at the 25% level, and provides opportunity for margin improvements if tariffs are not increased. We moved aggressively in the fourth quarter to optimize Family Dollar’s performance, including closing 84 stores and announcing plans to renovate at least 1,000 stores in 2019.”

Dollar Tree Profile

Dollar Tree operates discount variety retail stores. It operates through two segments, Dollar Tree and Family Dollar. The Dollar Tree segment offers merchandise at the fixed price of $1.00. It provides consumable merchandise, including candy and food, health and beauty care products, everyday consumables and seasonal goods, which include Valentine’s Day, Easter, Halloween, and Christmas merchandise.

The Family Dollar segment operates general merchandise discount retail stores that offer consumable merchandise, which comprise food, tobacco, health and beauty aids, household chemicals, paper products, hardware and automotive supplies, diapers, batteries, pet food and supplies, home products, including housewares, home décor, and giftware, as well as domestics, such as comforters, sheets, and towels. – CNN Money