The second quarter proved pretty comfortable for Dollar Tree as consumers who are dealing with inflation sought out its stores for low prices on key needs.
In the quarter net income was $359.9 million, or $1.60 per diluted share, versus $282.4 million, or $1.23 per diluted share, in the 2021 period, according to the company.
Dollar Tree topped a MarketBeat-published analyst consensus estimate of $1.59 per diluted share but missed the revenue target of $6.8 billion.
Company comparable sales gained 4.9% on a constant currency basis, or 4.8% when adjusted to include the impact of Canadian currency fluctuations. Dollar Tree comps increased 7.5%, or 7.4% when adjusted for currency fluctuations, while Family Dollar comps advanced 2% in the quarter year over year, the company stated.
Consolidated net sales and revenues increased to $6.77 billion from $6.34 billion in the previous year’s second quarter, Dollar Tree maintained. Operating income increased 25.7% to $505.4 million in the year-prior period.
In a second-quarter conference call, as transcribed by The Motley Fool, Mike Witynski, president and CEO, said a 14.2% increase in average ticket, partially offset by a traffic decline of 5.8%, drove the 7.5% year-over-year comp sales increase at Dollar Tree namesake stores. Consumables represented 46.8% of the banner’s sales mix, comping at 7.9%, while discretionary categories comped up 6.7% versus the year-earlier period.
A 3.3% increase in average ticket more than offset a 1.2% stumble in transaction count to produce Family Dollar’s 2% comp gain in the quarter year over year. Consumables represented 77.3% of Family Dollar sales compared to 75.8% in the 2021 period as consumables comp gained 4% for the quarter while discretionary comps slipped 4.1% year over year as shoppers continued to manage through the inflationary economic environment.
In announcing financial results, he said. “Our second quarter performance reinforces the relevance of our brands for millions of households pressured by higher costs for food, fuel, rent and more. We delivered increases of 6.7% in sales, 14.2% in gross profit, 25.7% in operating profit and 30.1% in EPS in the face of great macroeconomic uncertainty. We remain keenly focused on our associates, our DC network and supply chain, our value proposition and our technology. We are improving the shopper experience and positioning the company to deliver long-term profitable growth and attractive returns on capital.”
In the second quarter, Dollar Tree opened 127 new stores, expanded or relocated 29 stores, and closed 57 stores. In addition, the company expanded its multi-price Plus offering into an additional 697 Dollar Tree stores and completed 257 Family Dollar store renovations.
