Dollar Tree (DLTR) Shares Tank on Lower Than Expected Earnings, Revenue

Shares of Dollar Tree Inc. (DLTR) were trading down -5.14 or -6.40 percent to $75.11 per share in Tuesday’s premarket after the company announced fourth quarter earnings that missed analyst expectations early this morning. Dollar Tree Inc. stock closed at $80.25 per share, off -1.38 or -1.69 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.
Stores operated by Dollar Tree offer a variety of consumable merchandise including food, candy and health and beauty products, as well as housewares, toys, gifts, party goods and greeting cards. As of January 30th of 2016, Dollar Tree operated 13,851 stores under the Dollar Tree, Family Dollar, Deals and Dollar Tree Canada brands in the 48 continental United States and five Canadian provinces.

For the company’s fourth quarter, Dollar Tree reported net income of $229 million or $0.97 per diluted share compared to $206.6 million or $1.00 per share in 2014’s fourth quarter. On an adjusted basis, net income increased from $239.0 million last year to $239.4 million with adjusted diluted earnings per share of $1.01 versus $1.16 in the same period one year ago.

Sales increased to $5.27 billion from $2.48 billion last year, in large part due to the additional revenue from Dollar Tree’s Family Tree acquisition. The analyst consensus was for the company to report adjusted earnings of $1.07 per share on sales of $5.41 billion.

Same store sales increased +1.7 percent on a constant currency basis compared to an increase of +5.6 percent in constant currencies in the same period last year. Adjusted for the impact of fluctuations of the Canadian Dollar, same store sales increased +1.3 percent in the fourth quarter.

Bob Sasser, Dollar Tree’s Chief Executive Officer said in the company’s press release that, “2015 was a very successful year for Dollar Tree. I would like to thank all of our associates for their commitment and hard work throughout the year. We continued to serve our loyal customer base by providing terrific values every day; we successfully completed the acquisition of Family Dollar; we initiated, and remain on schedule with, the integration of our companies; and we are on track to achieve our stated synergy targets. Looking ahead, we are committed to growing and improving our Dollar Tree and Family Dollar businesses to better serve more customers, while delivering long-term value to our shareholders.”

The company’s guidance for the first quarter is for earnings per share of $0.75 to $0.83 on sales of $5.05 to $5.12 billion. Analysts were expecting the company to issue guidance of $0.81 on sales of $5.09 billion. For the full 2016 year, the company sees earnings per share of $3.35 to $3.65 on revenue of $20.75 billion to $21.11 billion. The analyst consensus was for full year earnings of $3.76 on revenue of $20.92 billion.

Dollar Tree shares have recovered considerably since trading under $62 per share in mid October of last year. This morning’s action has seen the stock regain more than half its losses and is only down -2.8 percent as of this writing, indicating investors are taking the selloff as an opportunity to go long.

Other News About DLTR

Dollar Tree: Has It Benefited from the Family Dollar Acquisition?

Article focusing on Dollar Tree’s valuation after its acquisition of Family Dollar.

Buckingham Initiates Buy Ratings On Dollar Stores

Analyst issues buy rating on both Dollar General and Dollar Tree.
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Published on Mar 1, 2016
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 2020. Content published with author's permission.

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