Dollar Tree Inc. Earnings Cheat Sheet: Five Straight Quarters of Double-Digit Growth

Dollar Tree Inc. (NASDAQ:DLTR) reported its results for the third 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 Third Quarter

Results: Net income for Dollar Tree Inc. rose to $104.5 million (87 cents per share) vs. $93.2 million (73 cents per share) in the same quarter a year earlier. This marks a rise of 12.1% from the year earlier quarter.

Revenue: Rose 12% to $1.6 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: DLTR beat the mean analyst estimate of 83 cents per share. Analysts were expecting revenue of $1.58 billion.

Quoting Management: “I am very pleased with the Company’s performance in the third quarter,” said President and CEO Bob Sasser. “Dollar Tree achieved double-digit growth in sales, operating margin and earnings per share against a very strong performance last year. Our merchandising and store teams continue to deliver exciting products at great values and a fun, friendly, convenient shopping experience for our customers.”

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 12.7%, 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 second quarter, net income rose 21.7% and in the first quarter, the figure rose 58.8%.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 2 cents in the second quarter, by 7 cents in the first quarter, and by 3 cents in the fourth quarter of the last fiscal year.

Gross margin shrank 0.2 percentage point to 35.3%. The contraction appeared to be driven by increased costs, which rose 12.5% from the year earlier quarter while revenue rose 12.2%.

Looking Forward: Expectations for the company’s next quarter performance are higher than they were ninety days ago. Over the past three months, the average estimate for the fourth quarter has risen to $1.54 per share from $1.51. Over the past three months, the average estimate for the fiscal year has climbed from $3.90 per to share to $4.

Competitors to Watch: Dollar General Corp. (NYSE:DG), Family Dollar Stores, Inc. (NYSE:FDO), 99 Cents Only Stores (NYSE:NDN), Target Corporation (NYSE:TGT), Fred’s, Inc. (NASDAQ:FRED), Wal-Mart Stores, Inc. (NYSE:WMT), Gordmans Stores, Inc. (NASDAQ:GMAN), Big Lots, Inc. (NYSE:BIG), Duckwall-ALCO Stores, Inc (NASDAQ:DUCK), and Wal-mart de Mexico S A B de C V (WMMVY).

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

 

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