Dollar Tree, Inc. (NASDAQ: DLTR) and Dollar General Corporation (NYSE: DG) both reported their fourth quarter 2022 earnings results this month. The current inflationary environment benefits discount stores as customers look for more value in their purchases. Here’s a look at how these two fared in the most recent quarter:
Revenue and comps
Dollar Tree’s consolidated net sales increased 9% year-over-year to $7.72 billion in Q4 2022 while enterprise same-store sales rose 7.4%. Dollar General posted net sales of $10.2 billion in Q4, up 18% from last year, driven by positive sales contributions from new stores and growth in same-store sales. DG’s sales growth was partly offset by store closures. Its same-store sales increased 5.7% in Q4, driven by an increase in average transaction amount, but partly offset by a slight decrease in customer traffic.
Profits
Dollar Tree reported net income of $452.2 million, or $2.04 per share, in Q4 2022 compared to $454.2 million, or $2.01 per share, in the same period last year. Dollar General’s net income increased 10.3% to $659.1 million while its EPS rose 15.2% to $2.96 in Q4 versus last year.
Category performance
In Q4, Dollar Tree reported an 8% growth in net sales for its namesake banner along with a 10% sales growth in its Family Dollar segment. Same-store sales for the Dollar Tree segment increased 8.7%, driven by a 10% increase in average ticket, partly offset by a 1% drop in traffic. Same-store sales for Family Dollar grew nearly 6%, helped by increases in average ticket and traffic.
Outlook
Dollar Tree expects consolidated net sales for the first quarter of 2023 to range between $7.2-7.4 billion. Same-store sales are expected to increase in the mid-single digits, with a low single digit comp increase at the Dollar Tree banner and a mid-single digit comp growth at the Family Dollar banner. EPS is expected to be $1.46-1.56 in Q1.
For FY2023, Dollar Tree’s consolidated net sales are expected to come between $29.9-30.5 billion. Comparable store sales are expected to increase in the low to mid-single digits, with a low single-digit increase in the Dollar Tree segment and a mid-single-digit increase in the Family Dollar segment. EPS is expected to range between $6.30-6.80 in FY2023.
Dollar General expects net sales growth of 5.5-6% and same-store sales growth of 3-3.5% in FY2023. EPS is estimated to grow around 4-6% for the full year.
Shares of Dollar Tree were up 2% on Monday while Dollar General’s stock was up less than 1%.
Click here to read the full transcript of Dollar Tree’s Q4 2022 earnings conference call