Unusually harsh winter weather affecting one in every three days during the fiscal fourth quarter led to softer than expected sales growth and a 7% decline in quarterly net income for Dollar Tree, the Chesapeake, Va.-based discounter said Wednesday.
A calendar shift moving Halloween sales to the third quarter, as well as six fewer holiday selling days due to a late Thanksgiving also negatively affected sales for the period, officials said.
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Sales for the 13-week quarter ended Feb. 1 totaled $2.2 billion, flat as compared to a 14-week quarter in the previous year, while comparable-store sales increased by 1.2%. Net earnings declined by 7% to $213 million. Both sales and earnings were lower than analysts and the company had anticipated, although CEO Bob Sasser in a conference call Wednesday told analysts that “nothing was broken,” accentuating increased store traffic and a 1.2% increase in comparable-store sales.
Sasser said inclement weather negatively affected 33 of 91 shopping days during the quarter, including store closures and partial closures.
“With the worst winter weather in decades, our traffic was up,” Sasser said. “When people were out shopping, they came to Dollar Tree. I believe that Dollar Tree can do even better in the future, and there is much more opportunity ahead of us than behind us.”
The company said it expects around $350 million in capital expenditures during fiscal 2014, covering 375 new stores and 75 store relocations.
For the 52-week fiscal year, Dollar Tree net earnings of $596.7 million declined by 3.6% from the 53-week prior year. Sales increased 6% to $7.8 billion and comps improved by 2.4%.
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