Dollar store giant beats Street

Dollar Tree turned in a strong quarterly performance that blew past profit and sales forecasts as consumers' love affair with dollar stores shows no signs of abating.



Net income rose to $233.8 million, or 98 cents per share, in the second quarter ended July 29, from $170.2 million, or 72 cents per share, in the year-ago period. Excluding items, Dollar Tree earned 99 cents per share, beating the analysts' estimate of 87 cents per share.



Net sales increased 5.7% to $5.28 billion, better than the $5.24 billion forecast by analysts. Same-store sales at Dollar Tree rose 2.4%, better than expected, and 1% at Family Dollar, also better than expected. (Dollar Tree acquired Family Dollar in July 2015).



"I am extremely pleased with the quarter," stated Bob Sasser, CEO. "Both Dollar Tree and Family Dollar produced positive same-store sales, our enterprise operating margin improved 80 basis points and earnings per share exceeded the high end of our guidance range."



Consolidated net sales for full-year fiscal 2017 are now expected to range from $22.07 billion to $22.28 billion, compared to the company's previously expected range of $21.95 billion to $22.25 billion. The estimate is based on a low single-digit increase in same-store sales and 3.9% square footage growth.



In addition, Dollar Tree now anticipates net income per diluted share for full-year fiscal 2017 will range between $4.44 and $4.60, compared to its previous guidance of $4.17 to $4.43.



"We have a proven business model, an experienced leadership team, momentum in our business and a transformational opportunity," Sasser said. "We are confident that we are well-positioned for the back half of 2017 and look to deliver value to our long-term shareholders in the years ahead."



During the quarter, Dollar Tree opened 133 stores, expanded or relocated 31 stores, and closed 34 stores. It operated 14,581 stores across 48 states and five Canadian provinces as of July 29, 2017. Stores operate under the brands of Dollar Tree, Family Dollar, and Dollar Tree Canada.