Dollar Tree fell short of Wall Street estimates for revenues and earnings in the third quarter, but the retailer posted solid comp store sales and pointed to market share gains in a conference call.
Net income was $212 million, or 97 cents per diluted share, versus $266.9 million, or $1.20 per diluted share, in the year-before quarter.
A Yahoo Finance-published analyst consensus estimate called for earnings per diluted share of $1.01 and revenues of $7.4 billion
Comparable sales were up 3.9% with Dollar Tree comps up 5.4% and Family Dollar comps up 2%, the company reported.
Net sales were $7.31 billion and other revenue was $5.7 billion, or $7.31 billion after rounding, versus net sales of $6.94 billion and other revenue was $3.3 million for total revenues of $6.94 billion after rounding in the year-earlier quarter. Operating income was $301.7 million versus $381.3 million in the year-prior period, Dollar Tree maintained.
Among third-quarter business highlights noted by Dollar Tree are the opening of 197 new stores and the expansion of the multi-price Plus offering to 870 additional Dollar Tree locations.
In a conference call, Rick Dreiling, Dollar Tree president and CEO, said the company’s sales momentum continues to be mostly traffic-driven as it attracts new customers and builds unit and dollar market share. Inflationary pressure, reduced government benefits and depleted savings have negatively affected Dollar Tree’s lower-income consumers, Dreiling noted. Dollar Tree CEO Jeff Davis added shrink was another factor impacting results in the quarter.
In announcing the company’s financial performance, Dreiling said, “Our third-quarter results were within our expectations thanks to continued execution across all aspects of our business transformation. In a challenging environment, our performance was among the best in retail as we continue to grow traffic, unit and sales per square foot.”
