US retailer Dollar Tree has reported that its consolidated sales have increased by 4% to $5.29 billion, in the first fiscal quarter which ended 29 April 2017.
The American discount variety retailer released its first quarter results, which also report that the company’s same-store sales grew by 0.5% overall. Same-store sales for the Dollar Tree banner increased 2.5%, however, the same-store sales for the Family Dollar banner decreased 1.2%.
Gross profit increased by 4.7% to $1.63 billion in the quarter. This improvement was mainly driven by lower merchandise and freight costs, partially offset by higher markdowns. The gross margin grew to 30.8% from 30.6% in the previous year.
However, the group also reported a decrease in its net income of $32.2 million, bringing the figure to $200.5 million. Diluted earnings per share was $0.85 compared to $0.98 in 2016. This is mainly due to a receivable impairment charge of $50.9 million.
Dollar Tree remain positive about the overall results from the first quarter. Bob Sasser, CEO of Dollar Tree said, "I am extremely pleased with the first quarter performance of our Dollar Tree banner and with the continued progress in re-building the Family Dollar business.
”Same-store sales were positive and total sales were near the mid-point of our range of guidance. Gross margin and operating margin rates improved, selling, general and administrative expenses were well managed across both banners, and our adjusted EPS (earnings per share) of $0.98 per diluted share, excluding the impairment charge related to the divestiture to Dollar Express, met the high end of our range of guidance.”
The company estimates that in the second quarter its consolidated net sales will be in the range of $5.18 billion to $5.28 billion. It also estimates that, for full fiscal year, consolidated net sales will range from $21.95 billion to $22.25 billion.
Sasser added, "We have a proven business model, an experienced leadership team, many years of store growth ahead of us, and tremendous opportunities to continue improving our businesses to deliver value to our long-term shareholders."
During the first quarter, the Dollar Tree opened 164 stores, expanded or relocated 51 stores, and closed 16 stores.
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Aidan O’Sullivan. Click subscribe to sign up to ESM: The European Supermarket Magazine.