Dollar Tree Inc. Earnings: Profits Grow by Double Digits For Fifth Straight Quarter

The Cheat Sheet

Dollar Tree Inc. reported its results for the fourth quarter. Dollar Tree operates discount variety stores in the United States. Its stores offer merchandise at the fixed price of $1.00. The company operates stores under the names of Dollar Tree, Deal$, and Dollar Bills.

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Dollar Tree Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for Dollar Tree Inc. rose to $187.9 million ($1.60 per share) vs. $162.5 million ($1.29 per share) in the same quarter a year earlier. This marks a rise of 15.6% from the year-earlier quarter.

Revenue: Rose 12.8% to $1.95 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Dollar Tree Inc. was about in line with expectations as the mean analyst estimate of $1.59 per share. Analysts were expecting revenue of $1.93 billion.

Quoting Management: “I am pleased to report that our business momentum remains strong as Dollar Tree’s sales, operating margin, and earnings continued to expand in the fourth quarter,” said President and CEO Bob Sasser. “Dollar Tree is focused on providing a broad, balanced assortment of merchandise that customers need and want at surprising values. Our stores are clean, bright, convenient, seasonally relevant and fun to shop. We are looking forward to an exciting Spring and Easter selling season.”

Key Stats:

The company has seen double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 12.3%, with the biggest boost coming in the first quarter when revenue rose 14.3% from the year earlier quarter.

The company has now seen net income rise in three straight quarters. In the third quarter, net income rose 12.1% and in the second quarter, the figure rose 21.7%.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 4 cents in the third quarter, by 2 cents in the second quarter, and by 7 cents in the first quarter.

Margins were up in the third quarter, following a drop in the previous quarter. Gross margin grew 0.2 percentage point from the year-earlier quarter to 37.8%. In the second quarter, the figure rose 0.4 percentage point to 35.1% from the year earlier quarter.

Looking Forward: The average estimate for the first quarter of the next fiscal year is steady at 98 cents a share. For the fiscal year, the average estimate has moved down from $4.05 a share to $4.03 over the last sixty days.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com

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