Dollar Tree: Shares Do Not Offer Same Value As Merchandise Yet
Shares of Dollar Tree (DLTR), the operator of discount merchandise stores, fell 3.5% over the past week. The company known from its brands, Dollar Tree, Deal $, Dollar Giant and Dollar Bills, reported its second quarter results on Thursday. Investors were slightly disappointed with the results as they came in line with analysts expectations.
Second Quarter Results
Dollar Tree reported second quarter revenues of $1.70 billion, up 10.5% compared to last year. Comparable sales, for the store which sells merchandise for $1 or loss, grew 4.5% over the quarter. Diluted earnings per share rose 30.8% to $0.51, in line with analysts expectations.
The company boosted operating margins by 80 basis points to 10.8%. The margin increase is entirely attributable to a 80 basis points reduction in selling, general and administrative expenses. Compensation and healthcare costs fell as a percentage of revenues amidst improvements in productivity.
During the quarter, the company repurchased 1.6 million shares, for a value of $81 million. The company has $1.1 billion remaining under its current share repurchase authorization.
Dollar Tree opened 77 new stores during the quarter and closed 5 stores, resulting in a store count of 4,523 by quarter's end. Total retail footage grew 7.1% to 39.2 million square feet. The company still sees plenty of growth potential. Dollar Tree estimates it could operate 7,000 stores in the U.S., and another 1,000 in Canada. READ FULL ARTICLE HERE
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