- Dollar Tree Inc DLTR reported first-quarter FY23 sales growth of 6% year-on-year to $7.32 billion, beating the consensus of $7.28 billion.
- Same-store sales increased 3.4% for the Dollar Tree segment, 6.6% for Family Dollar, and 4.8% for Enterprise.
- Gross profit for the quarter declined 4.7% Y/Y to $2.23 billion, and the gross margin contracted 340 basis points to 30.5%.
- Operating margin contracted by 490 basis points to 5.7%, and operating income for the quarter plunged 42.6% to $419.7 million.
- The company held $872.8 million in cash and equivalents as of Apr. 29, 2023.
- Adjusted EPS of $1.47 missed the consensus of $1.52.
- The company opened 107 new stores in Q1, relocated 33 stores, and closed 29 stores.
- Dollar Tree repurchased 1.03 million shares in Q1 for $151.1 million.
- "While we are seeing early results from our initiatives, we are not immune to the external pressures affecting all of retail, notably, the margin impact of elevated shrink and the product mix shift to consumables," said chairman and CEO Rick Dreiling.
- Outlook: Dollar Tree sees Q2 sales of $7 billion - $7.2 billion versus the consensus of $7.15 billion.
- The company expects Q2 EPS of $0.79 - $0.89, below the consensus of $1.22.
- For FY23, DLTR revised its sales guidance from $29.9 billion-$30.5 billion to $30 billion - $30.5 billion against the consensus of $30.37 billion.
- The company lowered its FY23 EPS outlook from $6.30 - $6.80 to $5.73 - $6.13 (consensus $6.68), including an expected benefit of $0.29 contribution from the 53rd week and the $0.12 charge for the legal reserve.
- Price Action: DLTR shares are trading lower by 12.45% at $136.01 in premarket on the last check Thursday.
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