In a December 4th release, Dollar Tree, Inc. (DLTR) announced Q3 FY 2024 results for the period ending November 2nd 2024. The Company exceeded expectations for sales and earnings. The holding company operates Dollar Tree and Family Dollar banners.
Dollar Tree Inc. posted net income of $233 million on total revenue of $7,568 million with a diluted EPS of $1.08. Comparable values for Q3 FY 2023 ending October 28th were net income of $212 million on revenue of $7,309 million with a diluted EPS of $0.97.
Comparing the respective quarters, revenue was up 3.5 percent in Q3 2024. During the most recent quarter, Dollar Tree attained a gross margin of 30.9 percent (29.7 percent in Q3 FY 2023) and an operating margin of 4.4 percent, compared to 4.1 percent in Q3 2023.
For Q3, consolidated comparable store sales, increased by 1.8 percent, with Dollar Tree achieving 1.8 percent and Family Dollar, +1.9 percent. The Company posted a 1.5 percent increase in traffic and 0.3 percent in ticket.
In commenting on results, Mike Creedon Interim CEO stated “Our Dollar Tree and Family Dollar merchandising efforts produced tangible results, and our third quarter sales came in at the high-end of our expected range,” He added, “As an organization, our top priorities remain accelerating the growth of the Dollar Tree segment, completing the Family Dollar strategic review process, and unlocking value for Dollar Tree shareholders.”
During the investors’ call Creedon expressed concern over imposition of tariffs noting possible responses including raising prices, dropping certain categories, pressuring suppliers for lower prices and changing product specifications.
Jeff Davis will step down from his role as the Company’s Chief Financial Officer.
Guidance for FY 2024 was upgraded from the Q2 report and included consolidated sales of $30,700 million to $30,900 million; a low-single-digit percent increase in comparable store sales and an EPS ranging from $5.30 to $5.50.
On November 2nd 2024, Dollar Tree posted total assets of $23,333 million including $3,063 as goodwill and intangibles and carried long-term debt and lease obligations of $8,297 million. DLTR had a market capitalization of $15,450 million on December 6\th compared to $28,460 on January 31st. The share has traded over the past 52 weeks from $151.22 down to $60.49 with a 50-day moving average of $67.49. DLTR closed at $73.05 on December 3rd, pre-release, opening December 4th at $76.02, up 4.1 percent but falling in trading to close at $73.81. Dollar Tree trades with a forward P/E of 11.6. For the trailing-12 months the company posted an operating margin of 2.8 percent and a profit margin of negative 3.4 percent. The company returned 4.6 percent on assets and negative 13.0 percent on equity over the past twelve months.
Effective December 4th the company operated 15,500 stores (Dollar Tree, 8.621; Family Dollar 6,874). During Q3 the company continued renovations with 2,300 completed with conversion to multi-pricing strategy. During Q3 the company opened 249 new Dollar Tree and 6 Family Dollar stores. Responding to complaints from civic organizations Dollar Tree continued to add frozen and fresh foods to stores in areas deemed “food deserts”
Dollar Tree is now evaluating the possible sale of the Family Dollar chain after recently completing a portfolio review. The parent company has closed 670 Family Dollar stores and has scheduled 370 locations for closure on termination of leases. The Family Dollar banner was acquired in 2015 for $9 billion.