Dollar Tree 1Q Profit Tops Expectations, Boosts Full Year Forecast

Dollar Tree, Inc.

announced better than expected profit for the first quarter. The company also boosted its earnings forecast for the full year while offering a tepid outlook for the second quarter. However, the stock traded more than eight percent after the upbeat guidance and earnings beat. Dollar Tree reported net income of $232.7 million or $0.98 a share for the first quarter. Excluding any adjustments, it would have earned $0.89 a share, up 25.4 percent from $0.71 a share in the year-ago quarter. Street analysts' estimated the company to deliver earnings of $0.81 a share. The company's consolidated net sales jumped 133.6 percent to $5.09 billion from $2.18 billion in the previous year quarter. The $2.91 billion increase in revenue included $2.70 billion in sales from Family Dollar stores, sales from new Dollar Tree stores, and a 2.3% same-store sales growth, on a constant currency basis. Its Same-store sales, on a constant currency basis, grew 3.4% in the prior-year period. Analysts' predicted $5.1 billion revenue. Dollar Tree's CEO, Bob Sasser, commented about the results, "I am very pleased with the Company's performance in the first quarter. Through what continues to be a challenging economic environment, we delivered sales of $5.09 billion, which was the mid-point of our guidance range, and earnings that exceeded the high end of our guidance range. Additionally, while not included in our comp calculation, our Family Dollar segment delivered its third consecutive quarter of positive same-store sales." Sasser added further, "We have gotten off to a successful start to 2016. We continue to serve a loyal customer base by providing terrific values every day; we remain on schedule with our integration of Family Dollar; we are on track to achieve our stated synergy targets; and we are part of what I consider, in this economic environment, the most attractive sector in retail. Looking ahead, we are committed to growing and improving our Dollar Tree and Family Dollar businesses to better serve more customers, while delivering long-term value to our shareholders." Going forward, the company lifted its earnings guidance to $3.58 - $3.80 a share for the full year from $3.35 - $3.65 projected earlier. The company also tightened its revenue forecast to $20.79 - $21.08 billion from $20.76 - $21.11 billion. Street expects Dollar Tree to report earnings of $3.67 a share on revenue of $21.05 billion. For the second quarter, the company sees earnings of $0.66 - $0.72 a share on revenue of $5.03 - $5.12 billion. Analysts' predict earnings of $0.75 a share on revenue of $5.09 billion. The stock traded 8.17 percent higher in the pre-market trading on Thursday.