Dollar Tree reported sales and earnings that topped analysts’ estimates but provided guidance that fell short.
Net income totaled $374.5 million, or $1.60 per share, up from $247.6 million, or $1.04 per share in the year-ago period. Analysts expected earnings per share of $1.42.
Sales totaled $6.477 billion, also better than expected, up from $6.287 billion last year. Total same-store sales inched up 0.8%.
Same-store sales for Dollar Tree increased 4.7%. Family Dollar same-store sales decreased 2.8%, “compared to a very strong 15.5% increase in the prior year’s first quarter,” the company noted.
The banner’s first-quarter same-store sales increase, on a two-year stacked basis, was a strong 12.7% as the Family Dollar brand continues to gain market share with its great value and compelling mix of products.
The company reiterated its plan to open 600 new stores and to renovate 1,250 Family Dollar stores in fiscal 2021. The new stores are expected to consist of 400 Dollar Tree stores and 200 Family Dollar stores. The Family Dollar stores will be comprised of H2 and combo Store formats, based upon market locations.
In new initiatives, the company is beginning a self-checkout pilot in a small number of Dollar Tree stores to enhance labor efficiencies. And the Family Dollar banner is in the early phases of testing fresh produce and frozen meat in select markets.
“Dollar Tree delivered its strongest quarterly same-store sales since 2017, while improving its operating margin by 290 basis points,” stated Michael Witynski, president and CEO. “Family Dollar effectively cycled a 15.5% comp sales increase from the prior year by driving its best post-merger quarterly operating profit. Combined, our enterprise produced positive same-store sales against a tough comparison, and a 220 basis point improvement in operating margin, driven by improved gross margins and better expense leverage.”
For the full year, Dollar Tree expects earnings per share between $5.80 and $6.05 and enterprise comparable sales growth in the low-single digits.
At the end of the quarter, Dollar Tree operated 15,772 stores across 48 states and five Canadian provinces.