Categories Analysis, Retail

Here’s a look at Dollar Tree’s (DLTR) expectations for the remainder of the year

For Q4 2022, consolidated net sales are expected to range between $7.54-7.68 billion

Shares of Dollar Tree Inc. (NASDAQ: DLTR) were down over 1% on Wednesday, a day after the company reported earnings results for the third quarter of 2022. Revenue and earnings beat estimates and the company raised its sales outlook for the full year. Here’s a look at the discount store’s expectations for the remainder of the year:

Sales

Dollar Tree generated consolidated net sales of $6.94 billion for the third quarter of 2022, which was up 8.1% from the same period a year ago. Net sales at the Dollar Tree segment increased 9% to $3.7 billion while at the Family Dollar division, it grew 7% to $3.1 billion versus last year.

Enterprise same-store sales increased 6.5% in the quarter. Dollar Tree same-store sales rose 8.6% while Family Dollar same-store sales grew 4.1%. Both segments witnessed sequential monthly improvement in same-store sales throughout the quarter. In the Dollar Tree division, consumables comps surpassed discretionary comps. Consumables comps were up 9.3%. In the Family Dollar segment, consumables comp rose 4.7%.

Dollar-Tree-Q3-2022-Earnings-Infographic

The company increased its sales outlook for the full year of 2022. Consolidated net sales are now expected to range between $28.14-28.28 billion versus the previous outlook of $27.85-28.10 billion. Comparable store sales are expected to increase in the mid-single digits for the year. This includes a high-single digit increase in the Dollar Tree segment and a low-single digit increase in the Family Dollar segment.

For the fourth quarter of 2022, consolidated net sales are expected to range between $7.54-7.68 billion while same-store sales are expected to increase in the mid to high single digits.

Profitability

In Q3 2022, Dollar Tree’s net income increased 23% to approx. $267 million and EPS increased 25% to $1.20. Total gross margin improved 240 basis points to 29.9%. Dollar Tree segment gross margin improved 520 basis points due to higher initial mark-on and lower freight costs, but was partly offset by a greater penetration of low-margin consumables and product cost inflation. Family Dollar gross margin fell 100 basis points, mainly due to product mix shift and product cost inflation.

Looking ahead, the company expects strength in consumables to pressure near-term margins. For the full year of 2022, EPS is expected to be in the lower half of the previously provided outlook range of $7.10-7.40.

Click here to read more on retail stocks

Looking for more insights on the earnings results? Click here to access the full transcripts of the latest earnings conference calls!

Most Popular

KR Earnings: Kroger Q3 sales, profit increase and top expectations

Department store chain The Kroger Co. (NYSE: KR) on Thursday said its third-quarter sales and adjusted earnings increased year-over-year. The latest numbers also exceeded the market's expectations. Net earnings attributable to

CrowdStrike: Why this cybersecurity stock is a good investment for 2023

CrowdStrike Holdings, Inc. (NASDAQ: CRWD) has steadily expanded its subscriber base over the years, riding the ever-growing demand for cybersecurity solutions. As digital adoption continues -- which accelerated after the

CRM Results: Salesforce Q3 earnings beat; revenues rise 14%

Customer relationship management platform Salesforce, Inc. (NYSE: CRM) on Wednesday reported an increase in third-quarter adjusted earnings, aided by double-digit growth in revenues. The numbers surpassed analysts' predictions. Third-quarter profit,

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top