Dollar Tree Climbs on Q1 Numbers

Dollar Tree, Inc. (NASDAQ:DLTR) to report quarterly earnings at $0.91 per share on revenue of $6.11 billion before the opening bell.

Consolidated net sales increased 8.2% to $6.29 billion from $5.81 billion in the prior year’s first quarter. Enterprise same-store sales increased 7.0%. Same-store sales for Family Dollar increased 15.5%. Dollar Tree same-store sales decreased 0.9%.

Gross profit increased 3.9% to $1.79 billion in the quarter compared to the prior year’s first quarter. As a percentage of net sales, gross margin was 28.5% compared to a gross margin of 29.7% in the prior year.

The decrease in gross margin was driven by merchandise mix, incremental tariffs of $23 million, markdowns related to Easter merchandise, and higher distribution center payroll costs, partially offset by leverage on occupancy costs from stronger same-store sales.

Selling, general and administrative expenses were 22.7% of net sales compared to 23.1% of net sales in the prior year's first quarter. The improvement was driven primarily by leverage on operating and corporate expenses, occupancy costs, and advertising, partially offset by higher payroll costs related to frontline associate wage premiums and field management sales bonuses.

Operating income for the quarter was $365.9 million compared with $385.5 million in the same period last year and operating income margin was 5.8% in the current quarter compared to 6.6% in last year’s quarter.

Net income was $247.6 million in the first quarter and diluted earnings per share for the quarter were $1.04 compared to $1.12 per share in the prior year’s quarter.

DLTR shares vaulted $10.91, or 12.5%, to $98.44.