Dollar Tree (NASDAQ:DLTR), the discount retail chain, has exceeded analysts’ projections for its fiscal second-quarter results due to robust sales and heightened footfall in its stores. In the quarter ending on July 29, Dollar Tree Inc. reported a profit of $200.4 million, equivalent to 91 cents per share. This marked a contrast from the previous year’s earnings of $359.9 million, or $1.60 per share, for the Chesapeake, Virginia-based company.
Surpassing predictions, the earnings per share topped the anticipated 88 cents, as indicated by analysts surveyed by Zacks Investment Research. Notably, the company’s revenue also stood at $7.33 billion, outshining Wall Street’s forecast of $7.22 billion.
Comparable store sales, a pivotal metric for assessing a retailer’s well-being, experienced a 7.8% upswing at Dollar Tree outlets. Additionally, Family Dollar saw a 5.8% rise in this figure. Chairman and CEO Rick Dreiling mentioned, “Both the Dollar Tree and Family Dollar segments reported strong same-store sales trends, driven by increased traffic and accelerated market share gains.”
Looking ahead, Dollar Tree is projecting third-quarter revenue ranging between $7.3 billion and $7.5 billion. This projection diverges from analysts’ predictions of $6.77 billion. The company has now adjusted its full-year earnings forecast to a range of $5.78 to $6.08 per share, with revenue projected between $30.6 billion and $30.9 billion. This comes as a revision from the prior guidance of earnings between $5.73 and $6.13 per share, accompanied by revenue in the $30 billion to $30.5 billion range. Chief Financial Officer Jeff Davis emphasized, “Our outlook takes into consideration several factors including shifting sales mix, unfavorable shrink trends, higher diesel fuel prices, incremental savings on ocean freight, and our improved sales performance.”
In a separate development, regulators in the United States announced an agreement with Dollar Tree Inc., which operates both Dollar Tree and Family Dollar chains. The aim of this settlement is to enhance worker safety across the numerous bargain stores in the country. The U.S. Labor Department highlighted safety concerns, including blocked exits, improper storage of materials, and inadequate access to fire extinguishers and electrical panels.
The agreement mandates Dollar Tree Inc. to identify the “root causes” of violations repeatedly flagged by the Occupational Safety and Health Administration in multiple stores. The company is required to rectify these issues within a two-year timeframe. In 2015, Dollar Tree completed the acquisition of Family Dollar at an approximate cost of $9 billion. Presently, the corporation manages over 16,000 Dollar Tree and Family Dollar stores in 48 states and Canada, providing employment to more than 193,000 individuals, according to the Labor Department. In morning trading, the company’s shares experienced a decline of over 9%.
Featured Image: Megapixl @ Rzyotova
