Dollar Tree (DLTR) Tops Q2 EPS by 18c, Revenues Beat
Dollar Tree (NASDAQ: DLTR) reported Q2 EPS of $1.10, $0.18 better than the analyst estimate of $0.92. Revenue for the quarter came in at $6.28 billion versus the consensus estimate of $6.22 billion.
- Same-Store Sales by Segment: Family Dollar +11.6%, Dollar Tree +3.1%
- Enterprise Same-Store Sales Increased 7.2%
- Consolidated Net Sales Increased 9.4% to $6.28 Billion
- Diluted Earnings per Share Increased 44.7% to $1.10 vs. $0.76
“Our store and distribution center teams have done a remarkable job of serving customers through an incredibly dynamic time in retail. Their continual efforts to ensure we are providing a clean, safe shopping experience, along with the great value and convenience our stores offer, contributed to our solid operating performance for the quarter,” stated Mike Witynski, President and Chief Executive Officer. “The teams delivered strong same-store sales of 7.2%, a 180 basis point improvement in gross profit margin, and a 130 basis point increase in operating profit margin, despite incurring COVID-19 and civil unrest-related costs exceeding $150 million in the quarter.”
Update on Company Outlook, Initiatives and Liquidity
Due to uncertainty related to the COVID-19 pandemic, the Company withdrew its fiscal 2020 guidance in its March 31, 2020 Business Update. Given the expectation of continued volatility and uncertainty, the Company is not issuing updated guidance at this time.
The Company continues to expect the completion of 500 new store openings (consisting of 325 Dollar Tree and 175 Family Dollar) and 750 Family Dollar H2 store renovations in fiscal 2020.
Capital expenditures for fiscal 2020 are expected to be approximately $1.0 billion.
The Company ended the quarter with $1.75 billion in cash on its balance sheet, including $500 million drawn on the Company’s revolving line of credit. The Company paid down $250 million on its line of credit during the quarter.
“Consumer shopping patterns are evolving. Customers are shopping with a purpose, while looking to minimize risk and exposure. As a result, we are seeing material increases in average ticket, while seeing a decline in average visits. At Dollar Tree, we were pleased to see a nice bounce back in the higher margin discretionary side of the business following Easter; and the expanded Crafter’s Square assortment continues to perform very well. At Family Dollar, we continue to gain traction as we had a material improvement in the discretionary side of the business, another quarter of double-digit same-store sales, a 390 basis point improvement in gross margin and a 470 basis point increase in operating profit margin,” Witynski added. “We will continue to manage our business with increased clarity, focus and speed to deliver the value and convenience that customers are looking for. I could not be more proud of the entire team’s commitment and efforts, and we are well-prepared for the back half of the year.”
For earnings history and earnings-related data on Dollar Tree (DLTR) click here.