Dollar offerings sizzle

Go in a Target any given day and the dollar-zone department near the entrance is likely to be busy with customers sifting through bins filled with interesting and inexpensive merchandise. Offering an ever-changing assortment of cheap goodies is a hot concept right now, and, while Target doesn’t disclose results by department, it is easy enough to get an idea how well the single-price-point genre is performing by looking at Dollar Tree. The operator of 3,667 stores produced stellar first-quarter results in which its earnings per share increase 37.5% to 66 cents, same-store sales increased 9.2%, margins expanded and expenses decreased. First-quarter sales increased 14.2% to slightly more than $1 billion, the company opened 79 news stores and increased its financial guidance for the year. According to president and CEO, Bob Sasser, “as consumers are searching for ways to balance their budgets in these uncertain times, more of them are turning to Dollar Tree and finding exceptionally high value merchandise and a fun, convenient shopping experience.”

All those dollars add up. The company ended its first quarter with $355 billion in cash on its balance sheet compared to $84 million a year ago.