dollartree

Dollar Tree beats estimates in 3Q

Stock in Dollar Tree Stores was up more than 8% Tuesday after the discounter reported strong profit performance in the fiscal third quarter. 

The Chesapeake, Va.-based retailer said sales improved by 1.1% to $5 billion in the quarter, which ended Oct. 29 led by sales gains in its Dollar Tree format and improved results at Family Dollar, the multi-price operator acquired last year, officials said in a conference call.

Comparable store sales for the quarter improved by 1.7% led by increased in traffic and average ticket, CEO Bob Sasser said. Net earnings of $89.7 million were up by 109.5% from the same period last year, reflecting a jump in gross margin as a percent of sales (30.4% this quarter from 28.3% in the prior period) sparked by lower costs for transportation and goods.

At Family Dollar, comps declined in the low-single digits, but officials were encouraged that sales trended better from the second quarter, and faced difficult comparisons cycling clearance sales in the year-ago period.

The company forecast low-single digit positive same-store sales in both Dollar Tree and Family Dollar divisions for the fourth quarter and raised its guidance for earnings by three cents per share.

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