Dollar Tree Q3 profit, sales top estimates; CFO to step down
Dollar Tree reported better-than-expected third-quarter earnings and revenue amid a rise in traffic and the opening of 255 stores.
The discounter also said that CFO Jeff Davis has agreed that he will step down from his role as CFO after the filing of its fiscal 2024 Form 10-K. Dollar Tree has launched an external search for a new finance chief.
In addition to searching for a new CFO, Dollar Tree is also looking for a new chief executive in the wake of the departure of Rick Dreiling, who stepped down as chairman and CEO, effective Nov. 3., citing health reasons. Michael C. Creedon Jr., COO, has been appointed interim chief.
Dollar Tree said its strategic review of alternatives for its Family Dollar business remains on track and is “moving forward as planned.” The alternatives could include a potential sale, spin-off, or other disposition of the business.
As of Nov. 2, the company has closed about 670 Family Dollar stores identified under its previously announced portfolio optimization review. It expects to close an additional 25 locations during the remainder of fiscal 2024.
“Our Dollar Tree and Family Dollar merchandising efforts produced tangible results, and our third quarter sales came in at the high-end of our expected range,” said Creedon. “As an organization, our top priorities remain accelerating the growth of the Dollar Tree segment, completing the Family Dollar strategic review process, and unlocking value for Dollar Tree shareholders.”
Net income rose to $233.3 million, or $1.08 a share, for the quarter ended Nov. 2. from $212 million, or $0.97 a share, in the year-ago quarter. Adjusted earnings came in at $1.12 a share, beating analysts’ estimates of $1.07 a share.
Consolidated net sales rose 3.5% to $7.57 billion from $7.31 billion, ahead of estimates of $7.45 billion. Total same-store net sales increased 1.8%, driven by a 1.6% increase in traffic and a 0.2% increase in average ticket.
By banner, Dollar Tree same-store net sales increased 1.8%, driven by a 1.5% increase in traffic and a 0.3% increase in average ticket. Family Dollar’s same-store net sales increased 1.9%, driven by a 1.8% increase in traffic and a flat average ticket. Same-store net sales results for the Family Dollar segment do not include any stores.
Approximately 2,300 Dollar Tree stores have been converted to its in-line multi-price format.
Dollar Tree operated 16,590 stores across 48 states and five Canadian provinces as of November 2, 2024. Stores operate under the brands of Dollar Tree, Family Dollar and Dollar Tree Canada.
