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Party supplies lift Dollar Tree in Q4

2/25/2015

As Dollar Tree prepares to absorb the costs associated with its pending acquisition of Family Dollar, the discounter beat Wall Street estimates of earnings for the fourth quarter.


Dollar Tree said net revenue improved 11% to $2.48 billion. Analysts had projected $1.15 a share in earnings and revenue of $2.47 billion. Dollar Tree said same-store sales rose 5.6% in the quarter and that the number of transactions rose 5%. For the period ended Jan. 31, Dollar Tree posted a profit of $206.6 million, or $1 a share, down from $213 million, or $1.02 a share, a year earlier.


"I am extremely proud of our company's performance in the fourth quarter and throughout 2014. Our quarterly comp sales increase of 5.6% was largely driven by a 5% increase in transaction count,” said Bob Sasser, Dollar Tree CEO. “Top performing categories included party supplies, household products and food. Our results continue to validate that Dollar Tree is part of the solution for millions of customers seeking great value as they strive to balance their household budget. We exceeded 1 billion transactions in a year for the first time in company history. Our business model is strong, our inventories are fresh, our shelves are full of incredible values, and our store teams are ready for the Spring selling season."


Dollar Tree’s $8.5 billion deal to buy Family Dollar is awaiting approval from the Federal Trade Commission. Dollar Tree has said it is working to close the deal by April 27. The company opened 90 stores, expanded or relocated six stores, and closed five stores during the quarter. Retail selling square footage increased to 46.5 million square feet, a 7.4% increase compared to the prior year.


Looking forward to 2015, Dollar Tree estimates $3.30 to $3.50 a share in earnings, along with $9.21 billion to $9.45 billion in net sales. Analysts polled by Thomson Reuters were expecting $3.57 a share and $9.4 billion in revenue for the year.


Dollar Tree operated 5,367 stores across 48 states and five Canadian provinces as of Jan. 31.


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