Dollar Tree Inc
The company reported first-quarter FY24 sales growth of 4.22% at $7.63 billion, which was in-line with the analyst consensus estimate.
Same-store sales increased 1.7% for the Dollar Tree segment, 0.1% for Family Dollar, and 1% for Enterprise.
Gross profit for the quarter increased 5.3% Y/Y to $2.35 billion, and the gross margin expanded 30 basis points to 30.8%.
Operating income for the quarter rose 0.2% to $420.6 million, and the margin contracted 20 basis points to 5.5%.
Adjusted EPS of $1.43 beat the consensus estimate of $1.42.
The company held $618.5 million in cash and equivalents as of May 4. Operating cash flow for the quarter totaled $695.7 million.
The company opened 157 new stores in the quarter and closed 529 stores. Dollar Tree repurchased 2.5 million shares for $313 million, including applicable excise tax.
Dollar Tree has initiated a formal review of strategic alternatives of its Family Dollar business segment, which could include among others, a potential sale, spin off or other disposition of the business.
"The unique needs of each banner at this time - transformation at Family Dollar and growth acceleration at Dollar Tree - lead us to the decision to conduct a thorough review of strategic alternatives for the Family Dollar business," said Chairman and CEO Rick Dreiling.
Outlook: Dollar Tree reaffirmed FY24 net sales outlook of $31 billion - $32 billion versus the consensus of $31.41 billion.
The company lowered FY24 adjusted EPS guidance from $6.70 - $7.30 to $6.50 - $7.00 against an estimate of $6.89.
The updated guidance reflects incremental transportation and other expenses related to the loss of its Marietta distribution center.
Dollar Tree expects second-quarter net sales of $7.3 billion - $7.6 billion versus the $7.59 billion estimate. Adjusted EPS of $1.00 - $1.10 against the Street view of $1.19.
Price Action: DLTR shares are trading lower by 3.49% at $116.10 in premarket at the last check Wednesday.
