Dollar Tree (DLTR) Tops Q4 EPS by 4c, Revenues Miss; Offers Q1 & FY20 EPS/Revenues Guidance Below Consensus
Dollar Tree (NASDAQ: DLTR) reported Q4 EPS of $1.79, $0.04 better than the analyst estimate of $1.75. Revenue for the quarter came in at $6.32 billion versus the consensus estimate of $6.39 billion.
- Consolidated Net Sales Increased 1.8% to $6.32 Billion
- GAAP Diluted Earnings per Share of $0.52
- Adjusted EPS of $1.79 vs. Guidance Range of $1.70 to $1.80
- Enterprise Same-Store Sales Increased 0.4%
- Same-Store Sales by Segment: Dollar Tree +1.4%, Family Dollar -0.8%
- 2020 Plans Include: 1,250 Family Dollar H2 Renovations; Launch of Dollar Tree Plus! 2.0
In the fourth quarter, the Company incurred several discrete charges, as described below:
- $313.0 million non-cash pre-tax and after-tax goodwill impairment charge based on the Company’s annual assessment of the Family Dollar segment.
- $24.6 million reduction in tax expense for the reversal of a valuation allowance related to the Company’s foreign net operating loss carry forwards.
- $18.0 million charge to the litigation reserve.
- $0.3 million acceleration in non-cash deferred financing costs associated with a debt prepayment.
“I am proud of the team’s accomplishments in 2019, including the successful consolidation of our store support centers, the material acceleration in the Family Dollar store optimization program where we continue to see strong performance at renovated stores, and the initial launch of our Dollar Tree Plus! initiative. For the fourth quarter, despite the compressed holiday shopping season, we delivered positive comps for the enterprise, while managing margins and costs effectively to achieve adjusted earnings per share near the top of our guidance range,” stated Gary Philbin, Chief Executive Officer. “Our support functions are now working together in one location under one leadership team; which we expect will build greater collaboration, efficiencies and teamwork to enable us to support Dollar Tree and Family Dollar stores more effectively. Fiscal 2019 was a very important year for our organization to further develop the foundation to grow and improve our business.”
GUIDANCE:
Dollar Tree sees Q1 2020 EPS of $1.00-$1.09, versus the consensus of $1.20. Dollar Tree sees Q1 2020 revenue of $5.89-5.99 billion, versus the consensus of $6.03 billion.
Dollar Tree sees FY2020 EPS of $4.80-$5.15, versus the consensus of $5.29. Dollar Tree sees FY2020 revenue of $24.21-24.66 billion, versus the consensus of $24.76 billion.
The Company’s fiscal 2020 outlook includes an estimated incremental impact of $47 million related to tariffs, with nearly all of it being incurred in the first half of the year. Additionally, the outlook includes an estimated impact of $15 million related to the new clean fuel regulations for ocean shipping. The outlook does not include any potential impact related to the supply chain or other aspects of the Company’s business for the COVID-19 coronavirus.
The Company estimates consolidated net sales for the first quarter of 2020 will range from $5.89 billion to $5.99 billion, based on a low single-digit increase in same-store sales for the enterprise. Diluted earnings per share for the quarter, including tariff costs, are estimated to be in the range of $1.00 to $1.09.
Consolidated net sales for full-year fiscal 2020 are expected to range from $24.21 billion to $24.66 billion. This estimate is based on a low single-digit increase in same-store sales and approximately 3.1% selling square footage growth. Diluted earnings per share are expected to range from $4.80 to $5.15. While share repurchases are not included in the outlook, the Company currently has $800 million remaining under its board repurchase authorization.
“As we enter 2020, our teams are aligned, energized and focused. Plans for the year include approximately 1,250 Family Dollar H2 renovations, the launch of Dollar Tree Plus! 2.0 initiative, and a focus on driving sales, improving gross margin and managing costs effectively,” Philbin added. “While our first quarter outlook includes expected pressure from the incremental tariffs and promotional activity, we believe we are well-positioned to deliver improved sales, operating margin and earnings in the following three quarters and for full-year fiscal 2020. We are focused on growing and improving our business to deliver long-term value to our shareholders.”
For earnings history and earnings-related data on Dollar Tree (DLTR) click here.