Dollar Tree reported earnings per share of 98 cents. Adjusted EPS rose 25.4%, to $0.89 from $0.71, topping analysts’ forecasts for $0.81, according to Capital IQ.
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Stock Movement: Dollar shares are up almost 7.5% during pre-market trading hours following the better-than-expected results.
The company reported better-than-expected first-quarter profit, but sales fell short of expectations.
Almost 11 months after buying Matthews-based Family Dollar, Dollar Tree said Thursday that the combined company is off to a “successful start” to 2016.
Rival discount retailer Dollar General also beat Wall Street expectations on profit: Q1 net income increased to $295.1 million, or $1.03 per share, from $253.2 million, or 84 cents per share in the previous year. Revenue is expected between $5.03 billion and $5.12 billion, bracketing analysts’ estimates for $5.09 billion.
Following its Family Dollar acquisition, Dollar Tree aims to better compete against one-time leader Dollar General.
The company’s shares were up 4.6 percent at $88 in premarket trading on Thursday, also helped by a 7 percent jump in quarterly sales.
During the quarter, the company opened 171 stores, expanded or relocated 66, and closed 19 others. Same-store sales – sales at stores open for at least one year, a key metric for investors – rose 3.4 percent over the year.
The company hiked its full-year earnings per share forecast to between $3.58 and $3.80, from $3.35 to $3.65. “Through what continues to be a challenging economic environment, we delivered sales (at) the mid-point of our guidance range, and earnings that exceeded the high end of our guidance range”. Additionally, while not included in our comp calculation, our Family Dollar segment delivered its third consecutive quarter of positive same-store sales.
Sasser added further, “We have gotten off to a successful start to 2016”.
“We are part of what I consider, in this economic environment, the most attractive sector in retail”, Dollar Tree Chief Executive Bob Sasser said in a statement.
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Analysts on average had expected earnings of 95 cents per share. Wall Street is expecting EPS of 75 cents and revenue of $5.09 billion for that quarter.
