Retail
Merger Costs Hammer Dollar Tree Earnings, Boost Revenues
Published:
Last Updated:
Same-store sales rose 4.5% in the quarter, driven by increases in customer count and average ticket. Including the impact of Canadian currency exchange rates, same-store sales rose 2.4%.
Dollar Tree completed its acquisition of Family Dollar Stores on July 6, and including acquisition costs, the company posted a net loss of $0.46 per share. The adjusted EPS total excludes acquisition-related costs and the impact of an increase to the diluted share count of 8.3 million new shares.
In its outlook statement, Dollar Tree estimated net sales for the third quarter of 2015 to range from $4.78 billion to $4.87 billion, based on a low single-digit increase in same-store sales. For the full year, the company estimates consolidated net sales to range from $15.30 billion to $15.52 billion, based on a low single-digit increase in same-store sales. The company also said it is not providing EPS guidance for the third quarter or the full year due to the recently completed acquisition, the “significant integration issues” and the divestiture process.
The consensus analysts’ estimates for third-quarter EPS are $0.72 on sales and revenue of $4.91 billion, and the full-year EPS estimate is $3.36 on revenue of $15.57 billion.
The company’s CEO said:
We are now an organization with annual sales exceeding $19 billion, more than 13,800 stores across North America and a network of more than 145,000 associates. We remain confident in our ability to deliver $300 million in annual run-rate synergies by the end of the third year post-acquisition.
Dollar Tree’s shares traded down about 4.3% in premarket trading to $73.01. The current 52-week range is $53.70 to $84.22. Thomson Reuters had a consensus analyst price target of $85.77 before the results were announced. The highest price target is $98.00.
ALSO READ: The Next 11 States to Legalize Marijuana
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.