Dollar Tree (DLTR) Shares Hammered on 2Q Earnings Miss

Shares of Dollar Tree Inc. (DLTR) were trading down -4.26 or -5.59 percent to $72.00 per share in Tuesday's premarket after the company announced second quarter earnings that missed analyst expectations early this morning. Dollar Tree stock closed at $76.26 per share, down -0.47 or -0.61 percent in Monday's regular trading session.

Chesapeake, Virginia based Dollar Tree Inc. is part of the Fortune 500 and is the operator of a domestic chain of discount variety stores best known for selling items for one dollar or less.
As of August 1st of 2015, Dollar Tree operated 13,864 stores under the Dollar Tree, Family Dollar, Deals and Dollar Tree Canada brands in the 48 continental United States and five Canadian provinces.

Early this morning, Dollar Tree reported a net loss of -$98 million or -$0.46 per share for its fiscal second quarter compared to a profit of $121.5 million or $0.59 per share in the same period one year ago. With the exclusion of some items, such as costs related to the company's takeover of Family Dollar, adjusted earnings for the company's second quarter came to $0.25 per share. Analysts were expecting the company to report earnings of $0.68 in the quarter.

Net sales increased to $3.01 billion from $2.03 billion in last year's second quarter, a gain of +48.3 percent. The notable increase in sales was in large part due to $811.6 million in sales from the company's newly acquired Family Dollar segment since the closing of the transaction.

Same store sales for the company after the acquisition of Family Dollar showed an increase of +2.7 percent on a constant currency basis. For the Dollar Tree segment, same store sales increased +4.5 percent. After the impact of Canadian currency fluctuations, same store sales increased +2.4 percent in the quarter.

Dollar Tree completed its acquisition of Family Dollar Stores on July 6th, 2015, adding an additional 8,284 Family Dollar Stores. Also in the quarter, Dollar Tree opened 141 new stores, relocated or expanded 40 stores and closed one store.

Dollar Tree's Chief Executive Officer, Bob Sasser stated in the company's press release that, "We are very pleased to have successfully completed the acquisition. We are now an organization with annual sales exceeding $19 billion, more than 13,800 stores across North America and a network of more than 145,000 associates. We remain confident in our ability to deliver $300 million in annual run-rate synergies by the end of the third year post-acquisition. This combination provides us with the unique opportunity to leverage our multiple banners to better serve a broader range of customers, while enhancing our ability to deliver long-term profitable growth for our shareholders."

Dollar Tree expects sales of $4.78 billion to $4.87 billion in the third quarter with same store sales growth in the low single digits. Dollar Tree stock is already down over seven percent in this morning's premarket indicating shareholders are not satisfied with the results, also, market weakness this morning is also putting pressure on the stock.

Other News About DLTR

Dollar Tree Appoints New COO Amid Family Dollar Integration

Company appointed Michael Witynski as the new Chief Operating Officer.

Big Value and Upside Seen in Dollar Tree

Wells Fargo analyst reiterated an Outperform rating on Dollar Tree stock.
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Published on Sep 1, 2015
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2016. Content published with author's permission.

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