Dollar Tree gains in ‘volatile sales environment’
Dollar Tree had a strong first quarter overall, as coronavirus buying patterns drove sales but also created challenges in high-demand categories.
The retailer reported results for its first quarter ended May 2, showing same-store sales increases for Family Dollar grow by 15.5%, but Dollar Tree stores dipped nearly .9%. Consolidated net sales increased 8.2% to $6.29 billion from $5.81 billion in the prior year’s first quarter. Enterprise same-store sales increased 7.0%. Gross profit increased 3.9% to $1.79 billion in the quarter compared to the prior year’s first quarter.
“After a relatively normal first month in the quarter, our stores experienced an unprecedented spike in demand for certain products in March,” said Gary Philbin, chief executive officer, Dollar Tree Inc. “The teams quickly rose to the challenge to make our stores safer for associates and customers by following CDC guidelines, along with enhanced cleaning protocols. We were focused and dedicated to delivering essentials to customers when they needed us most.”
Dollar Tree said it’s committed to keeping each of its more than 15,300 Dollar Tree and Family Dollar stores open to serve the critical product needs of customers in a convenient store format at prices they can afford and even expanded stores in the first quarter, opening 99 new locations, and expanded or moved 21 stores. It did close 14.
“Following a volatile sales environment in the first quarter, I am extremely pleased with the momentum we are seeing in our business early in the second quarter,” Philbin said. “At Family Dollar, we are seeing continued sales strength with improvements in our discretionary categories. For Dollar Tree, we have seen a rebound on the discretionary side of the business following the Easter holiday, especially in crafts, graduation, stationery, Mother’s Day seasonal and balloons.”
Philbin continued: “We have a resilient business model that has been demonstrated to work in varying economic climates. With more than 38 million Americans filing unemployment claims in the past nine weeks, we believe that Dollar Tree and Family Dollar are part of the solution to help millions of families stretch their budgets to help make ends meet.”