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Dollar Tree (DLTR) Posts Solid Q4 Earnings & Sales, Stock Up
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Dollar Tree Inc. (DLTR - Free Report) posted robust fourth-quarter fiscal 2016 results, wherein both top and bottom-line grew year over year, thus ending the fiscal on a superb note. Notably, shares of the company gained about 4% in the pre-market trading session following the announcement.
However, shares of Dollar Tree have dipped 2.6% in the past one year, underperforming the Zacks Categorized Retail-Discount & Variety industry, which has showcased growth of nearly 7.1%.
Fourth Quarter in Detail
The company’s quarterly earnings of $1.36 per share registered 40.2% year-over-year growth. Further, earnings exceeded the company’s guidance range of $1.24–$1.33 per share. Per sources, results were aided by reduced costs and increased consumer traffic.
Dollar Tree, Inc. Price, Consensus and EPS Surprise
Consolidated net sales jumped 5% to $5,635.3 million in the quarter. Comparable store sales (comps) grew 1.2%, on a constant-currency basis, backed by improved customer count and average ticket. Barring the impact of Canadian currency adjustments, comps rose 1.3%. While Dollar Tree banner posted currency-neutral comps growth of 2.3%, comps at the Family Dollar banner inched up 0.2%.
The company’s quarterly gross profit increased 9.3% year over year to $1,807 million, on the back of improved gross profit at both Family Dollar and Dollar Tree segments. Gross margin expanded 130 basis points (bps) to 32.1%, owing to reduced merchandise and freight expenses.
Selling, general and administrative expenses decreased 30 bps to 21.7% of sales, primarily benefiting from lower payroll, legal and depreciation costs, partly offset by increased store hourly payroll, advertising, and repairs and maintenance costs.
Balance Sheet
Dollar Tree ended the quarter with cash and cash equivalents of $866.4 million, net merchandise inventories of $2,865.8 million, net long-term debt of $6,169.7 million and shareholders’ equity of $5,389.5 million.
Store Update
Dollar Tree opened 104 outlets, expanded or relocated 27 outlets, and shuttered 55 outlets during the quarter. Moreover, during the quarter, the company launched eight old Family Dollar outlets as Dollar Tree outlets as part of its re-banner efforts. In fiscal 2016, the company opened 584 new stores.
Looking Ahead
Management remains pleased with its fiscal 2016 performance, as it crossed $20 billion in sales, alongside generating record earnings. Further, the company is progressing quite well with Family Dollar’s integration. The company further revealed that it is well on track with its expansion efforts for both Dollar Tree and Family Dollar. The company intends to attract shoppers and enhance customer experience with its diverse reach and desired products. All said, management believes that the company is well placed in the broad retail space, to deliver long-term value to shareholders. Further, the company issued a fresh outlook for the first-quarter and fiscal 2017.
Management projects consolidated net sales for fiscal 2017 in the band of $21.94–$22.33 billion. The guidance stems from comps growth in the range of flat to low single-digit increase and 3.9% increase in square footage. Earnings per share are envisioned in the $4.20–$4.56 range for fiscal 2017, which will include an additional 53rd week. The impact on sales and earnings from the additional week is included in management’s outlook. The current Zacks Consensus Estimate for fiscal 2017 stands at $4.51.
For the fiscal first quarter, consolidated sales are projected in the range of $5.26–$5.35 billion, driven by comps growth in the flat to low single-digit increase range for the combined entity. Earnings are anticipated in the range of 91–98 cents per share, compared with adjusted earnings of 89 cents reported in the same year-ago period. The current Zacks Consensus Estimate for the first quarter stands at $1.08, thus signaling chances of downward revisions.
Zacks Rank & Stocks to Consider
Dollar Tree currently carries a Zacks Rank #3 (Hold).
Big Lots has an average positive earnings surprise of 83% in the trailing four quarters. The stock, with a long-term growth rate of 13.5%, has seen positive estimate revisions in the last seven days.
Burlington, with long-term earnings per share (EPS) growth rate of 19.9%, has topped earnings estimates in each of the trailing four quarters, with an average beat of 25.6%.
Ross Stores’ long-term EPS growth rate of 10.5% and solid earnings surprise history bode well.
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Dollar Tree (DLTR) Posts Solid Q4 Earnings & Sales, Stock Up
Dollar Tree Inc. (DLTR - Free Report) posted robust fourth-quarter fiscal 2016 results, wherein both top and bottom-line grew year over year, thus ending the fiscal on a superb note. Notably, shares of the company gained about 4% in the pre-market trading session following the announcement.
However, shares of Dollar Tree have dipped 2.6% in the past one year, underperforming the Zacks Categorized Retail-Discount & Variety industry, which has showcased growth of nearly 7.1%.
Fourth Quarter in Detail
The company’s quarterly earnings of $1.36 per share registered 40.2% year-over-year growth. Further, earnings exceeded the company’s guidance range of $1.24–$1.33 per share. Per sources, results were aided by reduced costs and increased consumer traffic.
Dollar Tree, Inc. Price, Consensus and EPS Surprise
Dollar Tree, Inc. Price, Consensus and EPS Surprise | Dollar Tree, Inc. Quote
Consolidated net sales jumped 5% to $5,635.3 million in the quarter. Comparable store sales (comps) grew 1.2%, on a constant-currency basis, backed by improved customer count and average ticket. Barring the impact of Canadian currency adjustments, comps rose 1.3%. While Dollar Tree banner posted currency-neutral comps growth of 2.3%, comps at the Family Dollar banner inched up 0.2%.
The company’s quarterly gross profit increased 9.3% year over year to $1,807 million, on the back of improved gross profit at both Family Dollar and Dollar Tree segments. Gross margin expanded 130 basis points (bps) to 32.1%, owing to reduced merchandise and freight expenses.
Selling, general and administrative expenses decreased 30 bps to 21.7% of sales, primarily benefiting from lower payroll, legal and depreciation costs, partly offset by increased store hourly payroll, advertising, and repairs and maintenance costs.
Balance Sheet
Dollar Tree ended the quarter with cash and cash equivalents of $866.4 million, net merchandise inventories of $2,865.8 million, net long-term debt of $6,169.7 million and shareholders’ equity of $5,389.5 million.
Store Update
Dollar Tree opened 104 outlets, expanded or relocated 27 outlets, and shuttered 55 outlets during the quarter. Moreover, during the quarter, the company launched eight old Family Dollar outlets as Dollar Tree outlets as part of its re-banner efforts. In fiscal 2016, the company opened 584 new stores.
Looking Ahead
Management remains pleased with its fiscal 2016 performance, as it crossed $20 billion in sales, alongside generating record earnings. Further, the company is progressing quite well with Family Dollar’s integration. The company further revealed that it is well on track with its expansion efforts for both Dollar Tree and Family Dollar. The company intends to attract shoppers and enhance customer experience with its diverse reach and desired products. All said, management believes that the company is well placed in the broad retail space, to deliver long-term value to shareholders. Further, the company issued a fresh outlook for the first-quarter and fiscal 2017.
Management projects consolidated net sales for fiscal 2017 in the band of $21.94–$22.33 billion. The guidance stems from comps growth in the range of flat to low single-digit increase and 3.9% increase in square footage. Earnings per share are envisioned in the $4.20–$4.56 range for fiscal 2017, which will include an additional 53rd week. The impact on sales and earnings from the additional week is included in management’s outlook. The current Zacks Consensus Estimate for fiscal 2017 stands at $4.51.
For the fiscal first quarter, consolidated sales are projected in the range of $5.26–$5.35 billion, driven by comps growth in the flat to low single-digit increase range for the combined entity. Earnings are anticipated in the range of 91–98 cents per share, compared with adjusted earnings of 89 cents reported in the same year-ago period. The current Zacks Consensus Estimate for the first quarter stands at $1.08, thus signaling chances of downward revisions.
Zacks Rank & Stocks to Consider
Dollar Tree currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the same industry include Big Lots, Inc. (BIG - Free Report) , Burlington Stores, Inc. (BURL - Free Report) and Ross Stores, Inc. (ROST - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Big Lots has an average positive earnings surprise of 83% in the trailing four quarters. The stock, with a long-term growth rate of 13.5%, has seen positive estimate revisions in the last seven days.
Burlington, with long-term earnings per share (EPS) growth rate of 19.9%, has topped earnings estimates in each of the trailing four quarters, with an average beat of 25.6%.
Ross Stores’ long-term EPS growth rate of 10.5% and solid earnings surprise history bode well.
Everything You Need to Know About Snapchat BEFORE It Goes Public
You may be curious about the buzz surrounding Snap Inc.'s IPO on March 2. With the company expected to be valued around $22 billion, it is expected to be the largest IPO since 2014. But should you snap up this tech stock on Day 1?
In the 2017 IPO Watch List, you'll get an inside look at Snap's exciting prospects and potential challenges. You'll also learn about 4 other exciting tech companies with jaw-dropping growth. Each could go public in the coming months.
Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the latest scoop. Download this IPO Watch List today for free >>