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Dollar Tree Posts Q1 FY 2024 Results

06/06/2024

In a June 5th release, Dollar Tree, Inc. (DLTR) announced Q1 FY 2024 results for the period ending March 4th 2024.  The Company met expectations for earnings but underperformed on revenue. The holding company operates Dollar Tree and Family Dollar banners. Dollar Tree Inc. posted net income of $300 million on total revenue of $7,633 million with a diluted EPS of $1.38. Comparable values for Q1 FY 2023 ending April 29th were net income of $299 million on revenue of $7,324 million with a diluted EPS of $1.35.

 

Comparing the respective quarters, revenue was up 4.2 percent in Q1 2024. During the most recent quarter, Dollar Tree attained a gross margin of 30.8 percent (30.5 percent in Q1 FY 2023) and an operating margin of 5.9 percent, compared to 5.7 percent in Q1 2023.

 

For Q1, consolidated comparable store sales, increased by 1.0 percent, with Dollar Tree achieving 1.7 percent and Family Dollar, 0.1 percent.

In commenting on results, Rick Dreiling, Chairman and CEO stated, We are pleased to deliver first quarter adjusted EPS results that are towards the high end of our outlook range,” He added “At Dollar Tree we remain focused on rapidly rolling out our next generation of multi-price stores and at Family Dollar we are taking the steps necessary to position the business for long-term success.”

 

Chief Financial Officer Jeff Davis added, “Our operating performance was solid despite a soft Easter season for Dollar Tree. The results reflect our operating discipline and careful expense management throughout the quarter.”

 

Guidance for FY 2024 included consolidated sales of $31,000 million to $32,000 million; a mid-single-digit percent increase in comparable store sales and an EPS ranging from $6.50 to $7.00.

 

Effective May 4th 2024, Dollar Tree posted total assets of $22,110 million including $3,063 as goodwill and intangibles and carried long-term debt and lease obligations of $8,917 million.  DLTR had a market capitalization of $24,951 million on June 5th. The share has traded over the past 52 weeks from $102.77 to $134.96 with a 50-day moving average of $122.40. DLTR closed at $119.00 on June 4th, pre-release, closing June 5th at $114.01. Dollar Tree trades with a forward P/E of 17.9.  For the trailing-12 months the company posted an operating margin of 8.8 percent and a profit margin of negative 3.3 percent.  The company returned 5.0 percent on assets and negative 12.4 percent on equity over the past twelve months.

 

Effective March 4th the company operated 16,397 stores (Dollar Tree, 8,520; Family Dollar 7,897). During Q1 the company continued renovations but closed a net 397 stores with 500 under the Family Dollar banner. Responding to complaints from civic organizations Dollar Tree added frozen and fresh foods to additional stores during the quarter in areas deemed “food deserts”  

 

In the investors’ call the company commented on theft as a headwind and announced preventive measures including removal of self-checkout stations. Management noted an increase in transport expenses following the loss of the Maru=ietta OK. Distribution center to a toronado on April 28th.

 

Dollar Tree is now evaluating the possible sale of the Family Dollar chain after recently announcing an intention of closing 1,000 stores. The banner was acquired in 2015 for $9 billion.