{"id":33601,"date":"2016-03-01T15:41:59","date_gmt":"2016-03-01T21:41:59","guid":{"rendered":"http:\/\/news.medill.northwestern.edu\/chicago\/?p=33601"},"modified":"2016-03-01T16:02:09","modified_gmt":"2016-03-01T22:02:09","slug":"dollar-tree-earnings-miss-despite-family-dollar-lift","status":"publish","type":"post","link":"https:\/\/news.medill.northwestern.edu\/chicago\/dollar-tree-earnings-miss-despite-family-dollar-lift\/","title":{"rendered":"Dollar Tree earnings miss despite Family Dollar lift"},"content":{"rendered":"

By Harvard Zhang<\/strong><\/p>\n

Dollar Tree Inc. posted worse-than-expected fourth quarter profits despite positive results — and surging sales numbers \u2013 from its recent acquisition of a major competitor.<\/p>\n

In the quarter ended Jan. 30, the Chesapeake, Va.-based discount retailer reported net income of $229.0 million, or 97 cents per diluted share, up 10.8 percent from $206.6 million, or $1.00 per share in the year-ago period.. <\/p>\n

Taking account of the July, 2015 acquisition of rival Charlotte, N.C.-based Family Dollar Stores Inc., adjusted net income edged up to $239.4 million from $239.0 million while per-share profits decreased to $1.01 from $1.16. The adjusted per-share profit was 6 cents shy of analysts\u2019 consensus estimate of $1.07. <\/p>\n

Dollar tree completed the $8.5 billion acquisition of rival Family Dollar last July, spreading its reach for value-oriented customers striving to balance their household budget.<\/p>\n

Reflecting the big acquisition, the \u201ceverything\u2019s-$1\u201d chain store posted fourth-quarter net sales of $5.37 billion, jumping 116.7 percent from $2.48 billion a year ago.<\/p>\n

\u201cThrough a difficult consumer environment, fourth-quarter results validate the relevance of the Dollar Tree brand,\u201d Bob Sasser, Dollar Tree CEO, said in a Tuesday conference call with analysts. \u201cCustomers are shopping with us more often, we are attracting new customers every day, and when customers are in stores they are buying more.\u201d <\/p>\n

<\/p>\n

Speaking about the Family dollar acquisition and the integration process, Sasser added the company was \u201con track to achieve our stated synergy targets,\u201d which is cutting annual costs by $300 million in 2018.<\/p>\n

Net sales more than doubled in the first quarter comparing with a year ago as a result of the $2.68 billion Family Dollar sales and a 1.7-percent same-store sales uptick excluding the impact of exchange-rate fluctuations. <\/p>\n

Top sales categories were party supplies, beauty products, and snacks and beverages, while geographically Midwest and Northeast stores posted the strongest same-store sales growth, according to Sasser. The Fortune-500 company had more than 5,900 stores across North America at the end of last year. <\/p>\n

Dollar Tree quarterly net sales<\/h2>\n

[field name=”graph”]<\/p>\n

The discount retailer experienced three consecutive quarters of net sales increases in fiscal 2015. (Harvard Zhang\/MEDILL)<\/div>\n

Despite an 80-percent gross profit gain, fourth-quarter gross margin narrowed 6.3 percentage points to 30.8 percent from 37.1 percent. The contributors included an increased level of lower-margin products in its sales mix, $15.9 million inventory amortization and $11.5 million of planned markdowns with the transformation of Deals stores into $1-item stores. <\/p>\n

Looking ahead, Dollar tree officials said they expected first-quarter per-share earnings of 75 cents to 83 cents, in line with the consensus estimate of 80 cents analysts polled by Bloomberg LP had been expecting. The company posted per-share earnings of 34 cents, or an adjusted 71 cents a year ago taking account of the then-pending Family Dollar acquisition.<\/p>\n

The discount retailer forecasted first-quarter net sales of $5.06 billion to $5.12 billion based on a low single-digit increase same-store sales and larger stores, in agreement with analysts\u2019 consensus estimate of $5.08 billion. <\/p>\n

Full-year 2015 net income stood at $282.4 million, or $1.26 per share, down 52.9 percent from $599.2 million, or $2.90 per share. Dollar tree posted adjusted net income of $518.2 million, or $2.32 per share, down 19.7 percent from $645.6 million, or $3.12 per share.<\/p>\n

The discount chain stores reported net sales of $15.50 billion in fiscal 2015, up 80.2 percent from $8.60 billion of 2014. <\/p>\n

Dollar Tree\u2019s stock closed at $82.03 Tuesday on Nasdaq, up a modest 2.2 percent, or $1.78, from Monday\u2019s close of $80.25. <\/p>\n

Photo at top: Dollar Tree store, Plainville, Conn. The discount retailer’s fourth-quarter per-share earnings of 97 cents missed by 10 cents analysts’ consensus estimate of $1.07. (Mike Mozart<\/a>\/Flickr)<\/div>\n","protected":false},"excerpt":{"rendered":"

By Harvard Zhang Dollar Tree Inc. posted worse-than-expected fourth quarter profits despite positive results — and surging sales numbers \u2013 from its recent acquisition of a major competitor. In the quarter ended Jan. 30, the Chesapeake, Va.-based discount retailer reported net income of $229.0 million, or 97 cents per diluted share, up 10.8 percent from […]<\/p>\n","protected":false},"author":224,"featured_media":33602,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27,585],"tags":[],"class_list":["post-33601","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-winter-2016"],"yoast_head":"\nDollar Tree earnings miss despite Family Dollar lift - Medill Reports Chicago<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/news.medill.northwestern.edu\/chicago\/dollar-tree-earnings-miss-despite-family-dollar-lift\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Dollar Tree earnings miss despite Family Dollar lift - Medill Reports Chicago\" \/>\n<meta property=\"og:description\" content=\"By Harvard Zhang Dollar Tree Inc. posted worse-than-expected fourth quarter profits despite positive results — and surging sales numbers \u2013 from its recent acquisition of a major competitor. 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