Same-store sales rose 4.4% in the quarter, when taking into account currency translation effects for the company’s Canadian stores.
In its outlook statement, Dollar Tree estimated third-quarter sales in the range of $2.02 billion to $2.07 billion and EPS in the range of $0.61 to $0.66. Consensus estimates call for EPS of $0.66 on revenues of $2.05 billion.
The company also adjusted its full-year outlook. Dollar Tree raised its fiscal year revenues estimate from a range of $8.37 billion to $8.54 billion to a new range of $8.44 billion to $8.55 billion, and its EPS estimate was lowered at the top end from a prior range of $2.94 to $3.12 to a new range of $2.94 to $3.06. The consensus estimates call for EPS of $3.13 on revenues of $8.51 billion. The new estimates exclude acquisition-related costs for the second half of the year.
The company’s CEO said:
Expanded assortments of high-value product contributed to our strongest quarterly comparable store sales performance in two years. Pet supplies, hardware, household products, food, electronics and party goods all performed well in the quarter. … In challenging macro environments, consumers are increasingly relying on Dollar Tree to be part of the solution in managing their family’s budget. Our stores are well-stocked with incredible values and we are prepared for the fall selling season.
The only reference in the report to the company’s offer to buy competitor Family Dollar Stores Inc. (NYSE: FDO) was that it cost Dollar Tree $7.5 million in additional SG&A expenses. Early reports Thursday morning indicate that Family Dollar Stores has rejected the larger, all-cash offer from Dollar General Corp. (NYSE: DG) due to worries about antitrust regulations.
Shares were down about 1.6% in premarket trading, at $54.10 in a 52-week range of $49.59 to $60.19. Thomson Reuters had a consensus analyst price target of around $61.50 before the results were announced.
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