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Dollar Tree/Family Dollar are on track for Q4


Dollar Tree’s third quarter results weren’t as strong as the prior year, but all is well with the integration of Family Dollar and CEO Bob Sasser contends the combined company is well-positioned for the holidays.

Total sales increased 136% to $4.95 billion during the quarter ended Oct. 31, from $2.1 billion in the prior year’s third quarter. The surge in sales reflects the first full quarter in which sales from Family Dollar stores are included in results. Dollar Tree completed its acquisition of Family Dollar on July 6 creating a retailer with 13,600 stores.

Sales from Family Dollar stores added $2.67 billion to the $4.95 billion total and same stores sales at Dollar Tree stores increased 2.1% on a constant currency basis, marking the company’s 31st consecutive quarter of same store sales growth. The comp figure was a deceleration from the prior year’s third quarter when comps increased 5.9%. At the present time, Dollar Tree excludes Family Dollar store from comp store sales calculations.

“Our integration project is on schedule and we are on track to achieve our stated synergy goals,” Sasser said. “Today, I am even more enthusiastic about the long-term opportunity this merger provides for our customers, our suppliers, our associates, and our shareholders. As we entered the fourth quarter, both Dollar Tree and Family Dollar stores were well-stocked and prepared for the upcoming holiday season.”

Nevertheless, the company offered relatively modest guidance for same store sales to increase in the low single digits considering it is up against a strong 5.6% comp increase in the fourth quarter of 2014. Total sales in the fourth quarter are expected to range from $5.3 billion to $5.4 billion and for the full year sales should total about $15.5 billion.

Profits for the combined company totaled $81.9 million, $51.5 million less than the prior year, due to acquisition related costs. On an adjusted basis, the company said its operating profit increased to $442 million from $283.8 million.

Other notable developments during the quarter included the opening of 204 stores and the expansion or relocation of 63 other locations. Additionally, as part of its re-banner initiative, the company closed 167 Family Dollar stores and opened 143 Dollar Tree stores.

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