Dollar Tree shares fell nearly 8% in premarket trading Wednesday after the discount retailer reported fourth-quarter earnings.
Family Dollar, the struggling discount chain that caters to low-income customers predominantly in cities as inflation takes a bite out of consumers’ wallets and low-cost-retailers’ profits.
Dollar Tree Q4 Earning Results
Dollar Tree posted Q4 earnings per share (EPS) of $2.55, falling short of the $2.66 Wall Street expectations. Revenue for the quarter was also slightly below expectations at $8.64 billion compared to the $8.66 billion estimate.
Dollar Tree reported a gross profit increased from 16.2% to $2.77 billion and gross margin expanded 120 basis points to 32.1%. Consolidated net sales increased 11.9% to $8.63 billion.
Consolidated net sales increased 8.0% to $30.6 billion.
- Results Include a $594.4 Million Charge for Portfolio Optimization Review, a $1.07 Billion Goodwill Impairment Charge, and a $950 Million Trade Name Intangible Asset Impairment Charge.
- Adjusted Earnings per Share (EPS) of $2.55, Including $0.17 of Costs Primarily Related to General Liability Claims.
Dollar Tree Year-to-Date Results
Dollar Tree’s consolidated net sales for fiscal year 2023 increased 8.0% to $30.6 billion. While gross profit increased 4.3% to $9.31 billion and gross margin declined 110 basis points to 30.4%.
Dollar Tree Earning Guidance
Looking ahead to fiscal year 2024, Dollar Tree is expected to range from $6.70 to $7.30 against an analyst estimate of $7.04.
The company expects consolidated net sales for the first quarter will range from $7.6 billion to $7.9 billion.
It has set its consolidated net sales for full-year fiscal 2024 are expected to range from $31.0 billion to $32.0 billion, which compares to an estimated $31.65 billion.
While share repurchases are not included in the outlook, the Company has $1.35 billion remaining under its share repurchase authorization as of February 3, 2024.
- Fiscal 2024 Net Sales Outlook Range of $31.0 Billion to $32.0 Billion
- Fiscal 2024 Diluted EPS Outlook Range of $6.70 to $7.30
Family Dollar and Dollar Tree to close 1,000 stores
Family Dollar will close 600 locations in the first half of 2024 and 370 stores over the next several years as store leases expire. Dollar Tree, which owns Family Dollar, also said it will close 30 stores over the next several years as leases expire.
- Portfolio Optimization Review Identifies Approximately 600 Family Dollar Stores for Closure in First Half of Fiscal 2024 and Approximately 370 Additional Stores as Their Leases Expire.