Strong Comps Boost Dollar Tree Q2 Revenue
Dollar Tree reported solid second quarter results as growth in same store sales across the company helped drive the increase.
For the period ended July 29, consolidated net sales were up 8.2% to $7.32 billion. Enterprise same-store sales increased 6.9%, Dollar Tree same-store sales increased 7.8%, and Family Dollar’s same-store sales were up 5.8%. Net income was $200.4 million, down from net income of $359.9 million in the comparable quarter the previous year.
“At our June Investor Conference we shared the details of our strategy to transform the company and unlock the true value of our business, and our second quarter results show us making solid progress against these objectives,” said Rick Dreiling, chairman and CEO of Dollar Tree. “Both the Dollar Tree and Family Dollar segments reported strong same-store sales trends, driven by increased traffic and accelerated market share gains.”
Jeff Davis, the company’s chief financial officer, added that while factors such as sales mix and elevated shrink continue to pressure margins, the company was able to generate a year-over-year increase in gross profit dollars.
We are pleased with the progress of our transformation to date and remain confident in our ability to deliver our growth objective of $10 or more of diluted EPS by 2026,” he added.
Additional business highlights for the quarter included:
- Opened 118 new stores
- Expanded multi-price Plus offering to 715 additional Dollar Tree stores
- Added $3, $4, and $5 frozen and refrigerated items to 1,645 additional Dollar Tree stores
- Completed 276 Family Dollar store renovation projects
- Established $1.5 billion commercial paper program
- Net cash provided by operating activities increased $189.7 million compared to Q2 2022
- Improved free cash flow by $40.5 million compared to Q2 2022
For the full year-to-date, consolidated net sales increased 7.1% to $14.64 billion. Enterprise same-store sales increased 5.9%, Dollar Tree same-store sales increased 5.6%, and Family Dollar’s same-store sales increased 6.2%. Net income was $499.4 million and diluted earnings per share was $2.26.
Company officials said consolidated net sales for fiscal 2023 are now expected to range from $30.6 billion to $30.9 billion. Comparable store sales are expected to increase in the mid-single-digits.
Looking ahead, the company expects to deliver a mid-single-digit comparable store sales increase for the year, consisting of a mid-single-digit increase in the Dollar Tree segment and a mid-single-digit increase in the Family Dollar segment.