Dollar Tree (DLTR) Q3 2024 Earnings Report Highlights and Key Takeaways

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Dollar Tree had a strong quarter with consolidated net sales reaching $7.56 billion, a 3.5% increase year-over-year, which beat estimates. Both GAAP earnings per share and adjusted EPS saw healthy growth, with adjusted EPS reaching $1.12, above the expected $1.08. This is definitely positive news for Dollar Tree.

Business performance

In terms of business performance, Dollar Tree saw a 1.8% increase in enterprise same-store sales, driven by a 1.6% rise in traffic and a 0.2% increase in average ticket. The Dollar Tree segment experienced similar growth, with same-store sales up 1.8%, fueled by a 1.5% traffic increase and a 0.3% bump in average ticket. The Family Dollar segment also did well, with a 1.9% growth in same-store sales, thanks to a 1.8% increase in traffic.

Net sales for the Dollar Tree segment were up 8% year-over-year to $4.33 billion in the third quarter, with a gross margin increase to 35.4%. Meanwhile, the Family Dollar segment saw a slight decrease in net sales to $3.22 billion, but an improvement in gross margin to 24.9%.

Updated outlook

Looking ahead, Dollar Tree adjusted its outlook for fiscal year 2024. The company now expects consolidated net sales to range between $30.7-30.9 billion, up from the previous forecast. Adjusted EPS is also expected to be higher at $5.31-5.51 compared to the prior outlook. Dollar Tree is still anticipating low-single-digit comparable store sales growth for both its enterprise and divisions.

Management change

There is a change on the horizon for Dollar Tree, as Chief Financial Officer Jeff Davis will be stepping down. The company is already in the process of searching for his replacement. This follows the recent departure of Chief Executive Officer Rick Dreiling due to personal reasons.

Portfolio review

Dollar Tree continues to evaluate strategic alternatives for the Family Dollar business. As part of this review, the company has identified around 970 underperforming Family Dollar stores. Approximately 670 stores have already closed, with plans to shutter another 25 stores by the end of fiscal year 2024. It’s all part of Dollar Tree’s ongoing effort to optimize its portfolio.

In conclusion, Dollar Tree’s latest earnings report shows positive momentum and strategic moves to drive growth. It will be interesting to see how these developments play out in the months to come.