Dollar Tree, Inc. (NASDAQ: DLTR) saw its shares drop steadily on financial results for the quarter ended November 2
The discount-store chain, based out of Chesapeake, Va., reported that consolidated net sales increased 3.7% to $5.75 billion from $5.54 billion in the prior year’s third quarter. Enterprise same-store sales increased 2.5%. Same-store sales for the Dollar Tree segment increased 2.8%.
Gross profit increased by $32.6 million to $1.70 billion in the quarter compared to the prior year’s third quarter. As a percentage of net sales, gross margin was 29.7% compared to 30.2% in the prior year.
Selling, general and administrative expenses were 23.5% of net sales compared to 23.2% of net sales in the prior year's third quarter. The increase was driven primarily by operating and corporate expenses related to the consolidation of the Company’s store support centers, costs related to asset disposals for closed stores, and slightly higher depreciation expense, partially offset by lower payroll and benefits expenses.
Operating income for the quarter was $358.4 million compared with $387.8 million in the same period last year and operating income margin was 6.2% of net sales in the third quarter compared to 7.0% of net sales in last year’s quarter. Net income was $255.8 million in the third quarter and diluted earnings per share for the quarter were $1.08 compared to $1.18 in the prior year’s quarter.
CEO Gary Philbin said, "The third quarter represented another period of solid sales performance for both brands, Dollar Tree and Family Dollar. Our store optimization efforts and sales driving initiatives are working.
"The teams have completed more than 1,150 Family Dollar H2 renovations, nearly 200 Dollar Tree re-banners, more than 1,000 Dollar Tree Snack Zones and launched our Dollar Tree Plus! test already this year."
Shares slumped $18.14, or 16.1%, to $94.25.
