Dollar Tree Results Beat Estimates, Guidance a Little Soft

The discount retailer reported adjusted diluted earnings per share (EPS) for the quarter of $1.01 on revenues of $2.25 billion. In the same period a year ago, it reported EPS of $0.80 on revenue of $1.95 billion. This morning’s results also compare to the Thomson Reuters consensus estimates for EPS of $0.99 and $2.23 billion in revenue.

For the fiscal year, Dollar Tree posted EPS of $2.68 on revenues of $7.39 billion, better than the consensus estimates for EPS of $2.50 and revenues of $7.35 billion.

The company’s CEO said:

I am pleased with the growth of Dollar Tree’s sales and earnings in the fourth quarter and for the year of 2012. On top of a very strong fourth quarter performance in 2011, average basket size increased and customers responded this year in record numbers.

Same-store sales for the quarter rose 2.4%, on top of a 7.3% increase in the fourth quarter a year ago. The retailer is right to be happy about this year’s gain. For the full year, same-store sales rose 3.4% on top of a 6% gain in 2011.

The one down note is that Dollar Tree’s fiscal year included 53 weeks in 2012, compared with 52 in 2011. Backing out the 53rd week and a one-time gain for the sale of the company’s interest in another firm, Dollar Tree’s full-year EPS totaled $2.44 a share.

The company guided first-quarter EPS at $0.53 to $0.58 and sales at $1.84 billion to $1.89 billion. For the full year, the company forecast EPS in the range of $2.54 to $2.74 on revenues of $7.79 billion to $7.97 billion. The consensus estimates for the first quarter call for EPS of $0.58 on revenues of $1.87 billion. For the full year, the consensus EPS estimate is $2.81 on revenues of $7.9 billion.

Dollar Tree’s shares are up 2.2% in premarket trading this morning, at $42.00 in a 52-week range of $37.12 to $56.81. Thomson Reuters had a consensus analyst price target of around $47.65 before today’s results were announced.