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UPDATE: Dollar Tree Posts Downbeat Q2 Profit, Revenue Beats View


Dollar Tree (NASDAQ: DLTR) reported weaker-than-expected second-quarter profit. However, the company reported upbeat sales for the quarter.

The Chesapeake, Virginia-based company posted a quarterly net profit of $121.5 million, or $0.59 per share, versus a year-ago profit of $124.7 million, or $0.56 per share. Excluding acquisition-related costs, its adjusted earnings per share rose 8.9% to $0.61.

Its sales increased to $2.03 billion from $1.854 billion. However, analysts were expecting earnings of $0.64 per share on revenue of $2.01 billion.

Dollar Tree's comparable store sales rose 4.5% on a constant currency basis in the quarter. Analysts were expecting a 2.5% gain in comparable store sales.

Its gross profit rose 7.0% to $694.1 million versus $648.7 million, while selling, general and administrative expenses came in at 24.1% of sales, versus 24.1% of sales.

During the quarter, Dollar Tree opened 90 stores, expanded or relocated 20 stores, and closed 4 stores. Retail selling square footage climbed 6.8% y/y to 44.8 million square feet.

Chief Executive Officer Bob Sasser said, “Expanded assortments of high-value product contributed to our strongest quarterly comparable store sales performance in two years. Pet supplies, hardware, household products, food, electronics and party goods all performed well in the quarter.”

Dollar Tree expects Q3 earnings of $0.61 to $0.66 per share on revenue of $2.02 billion to $2.07 billion. Analysts expected earnings of $0.66 per share on revenue of $2.05 billion.

For the full-year 2014, the company expects earnings of $2.94 to $3.06 per share on revenue of $8.44 billion to $8.55 billion.

Dollar Tree shares gained 0.53% to close at $55.00 yesterday.


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