Dollar Tree profits from Family Dollar deal
The acquisition of Family Dollar in the second quarter led Dollar Tree Inc. to report quarterly sales that were up more than 48% from a year ago.
For the second quarter ended Aug. 1, Dollar Tree reported sales of $3.01 billion, boosted by $811.6 million in sales from Family Dollar. Same store salesrose 2.7%.Dollar Tree reported income of $138.9 million. The retailer’s earnings were 67 cents.
“We delivered our 30th consecutive quarter of positive same-store sales, broke ground on our southeast distribution center in South Carolina, successfully completed our acquisition of Family Dollar, and quickly initiated our integration plan,” Dollar Tree Chief Executive Officer Bob Sasser said in a statement.
Dollar Tree completed its purchase of Family Dollar in July. The deal’s was worth about $9.1 billion.
Sasser added: “We are very pleased to have successfully completed the acquisition. We are now an organization with annual sales exceeding $19 billion, more than 13,800 stores across North America and a network of more than 145,000 associates. We remain confident in our ability to deliver $300 million in annual run-rate synergies by the end of the third year post-acquisition. This combination provides us with the unique opportunity to leverage our multiple banners to better serve a broader range of customers, while enhancing our ability to deliver long-term profitable growth for our shareholders.”
During the quarter, the company acquired 8,284 Family Dollar stores, opened 141 stores, expanded or relocated 40 stores, and closed 1 store. Additionally, as part of its re-banner initiative, the company closed 18 Family Dollar stores, of which four have re-opened as Dollar Tree stores and the other 14 re-opened as Dollar Tree stores following quarter-end. Retail selling square footage at the end of the quarter was approximately 108.2 million square feet.
The company estimates consolidated net sales for the third quarter of 2015 to range from $4.78 billion to $4.87 billion, based on a low single-digit increase in same-store sales. For the full year, the company estimates consolidated net sales to range from $15.30 billion to $15.52 billion, based on a low single-digit increase in same-store sales.
As a result of the recently-completed acquisition, the significant integration initiatives and the divestiture process, the company is not providing earnings per share guidance for the third quarter or full year at this time.