DOLLAR TREE STORES, INC. REPORTS FOURTH QUARTER EARNINGS PER SHARE OF $1.04
DOLLAR TREE STORES, INC. REPORTS FOURTH QUARTER EARNINGS PER SHARE OF $1.04 AND FISCAL YEAR EARNINGS PER SHARE OF $2.09
CHESAPEAKE, Va. – February 27, 2008 – Dollar Tree Stores, Inc. (NASDAQ: DLTR), the nation's leading operator of single price point dollar stores, reported earnings per share of $1.04, for the fiscal fourth quarter ended February 2, 2008. Last year, the Company reported earnings of $0.96 per share for the 14-week fiscal fourth quarter ended February 3, 2007. Last year’s fourth quarter included 14 weeks, commensurate with the 53-week retail calendar. The extra week contributed approximately $0.07 earnings per share to the fourth quarter last year.
As previously reported, sales for the quarter were $1.30 billion, a 5.0% increase compared to the $1.24 billion in the comparable 13-weeks of the fourth quarter last year. Total sales for the 14-week fourth quarter last year were $1.32 billion.
“Our business fundamentals are sound,” said President and CEO Bob Sasser. “The outstanding value that we offer continues to make Dollar Tree extremely relevant to the customer in the face of the current economic environment and we have continued to manage costs, increase margins and grow sales and earnings per share.”
For the fourth quarter 2007, gross margin was 35.8%, a 10 basis-point improvement from 35.7% in the fourth quarter last year. The rate expansion reflects continued improvement in merchandise margin, driven primarily by an increased mix of higher margin general merchandise and improvements in sourcing, which more than offset the loss of leverage in occupancy cost resulting from last year’s fourth quarter having 14 weeks of sales.
Selling, general and administrative expenses, as a percentage of sales, were 23.9% in the fourth quarter of 2007. The rate was unchanged from the same quarter last year, reflecting Dollar Tree’s continued focus on expense control, process efficiency and lower depreciation compared with last year.
Operating margin in this year’s fourth quarter was 11.9%, a 10 basis-point improvement versus 11.8% for the fourth quarter 2006.
For the year, sales totaled $4.24 billion, a 6.9% increase over the 53-week fiscal 2006, on a comparable store sales increase of 2.7%. Operating margin was 7.8%, level with the 7.8% reported for the 53-week fiscal 2006. Diluted earnings per share were $2.09.
During the fourth quarter, the Company repurchased 3.4 million shares for $94.7 million and reduced its long-term debt by $85 million.
The Company recently enhanced its long-term debt structure, replacing the previous $450 million Revolving Credit Facility with a $300 million Revolving Credit Facility and a $250 million term loan. The new structure provides greater flexibility and a more favorable LIBOR spread than the previous structure.
The Company estimates sales for the first quarter of 2008 to be in the range of $1.010 - $1.035 billion. This includes the potential unfavorable impact of the early Easter this year. Based on this sales forecast, diluted earnings per share are estimated to be in the range of $0.37 to $0.40.
For the full year, the Company estimates sales will range from $4.49-$4.62 billion. The Company expects square footage growth of approximately 9% in 2008.