Dollar Tree's Q2 Results Demonstrate A Proven Business Model, Experienced Leadership Team & Business Momentum

Dollar Tree, Inc. (NASDAQ: DLTR), North America's leading operator of discount variety stores, today reported results for its second fiscal quarter ended

July 29, 2017.

About Dollar Tree, Inc.

Dollar Tree operates 14,581 stores across 48 American states and 5 Canadian provinces under the brands of Dollar Tree, Family Dollar, and Dollar Tree Canada. To learn more about the Company, visit www.DollarTree.com.

Second Quarter Results

  • Consolidated net sales: UP 5.7% to $5.28 billion
  • Enterprise same-store sales: UP 2.4% (Dollar Tree stores UP 3.9%; Family Dollar stores UP 1.0%)
  • Gross profit: UP 7.6% to $1.63 billion
  • Gross margin as a percent of sales: UP 50 basis points to 30.8% primarily due to lower merchandise & freight costs and lower markdowns partially offset by higher distribution and occupancy costs
  • Selling, general and administrative expenses: DOWN 20 basis points to 22.9% of sales due to lower depreciation costs, lower payroll costs and workers’ compensation expenses and lower utility costs as a percent of sales, partially offset by higher operating and corporate expenses resulting from increased advertising costs and legal fees
  • Operating income: UP 17.4% to $419.5 million
  • Operating income margin: UP 80 basis points to 7.9% of sales
  • Net income: UP 37.4% to $233.8 million
  • Diluted earnings per share: UP 36.1% to $0.98

During the quarter, the Company opened 133 stores, expanded or relocated 31 stores, and closed 34 stores. Retail selling square footage at quarter-end was approximately 114.5 million square feet.

Company Outlook

For the third quarter of 2017 the company estimates:

  • consolidated net sales to range from $5.20 billion to $5.29 billion, based on a low single-digit increase in same-store sales for the combined enterprise.
  • diluted earnings per share to range from $0.83 to $0.90.

For full-year fiscal 2017 the company expects:

  • consolidated net sales to range from $22.07 billion to $22.28 billion compared to the Company’s previously expected range of $21.95 billion to $22.25 billion. This estimate is based on a low single-digit increase in same-store sales and 3.9% square footage growth.
  • net income per diluted share to range between $4.44 and $4.60, compared to its previous guidance of $4.17 to $4.43. This estimate includes $53.5 million, or $0.14 per diluted share, of receivable impairment charges incurred in the first half of 2017. Fiscal 2017 includes a 53rd week. The extra week, in the fourth quarter, is expected to add $400 million to $430 million to sales and $0.19 to $0.22 to diluted earnings per share, both of which are included in the guidance.
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