Dollar Tree Beats Q4 Earnings Forecast But Family Dollar Hits Comp Sales

Dollar Tree said it hasn't yet factored in the supply chain an demand impact of the coronavirus on its 2020 profit outlook.

Dollar Tree Inc.  (DLTR) - Get Report posted stronger-than-expected fourth quarter earnings Wednesday, but notched disappointing same-store sales while noting that its near-term profit forecasts do not include any impact on supply chains or customer demand linked to the coronavirus.

Dollar Tree said adjusted earnings for the three months ending on February 1 were pegged at $1.79 per share, down 7.25% from the same period last year but 4 cents ahead of the Street consensus forecast. Group net sales, Dollar Tree said, rose 1.8% to $6.32 billion, but fell shy of analysts' estimates of a $6.385 billion tally as Family Dollar sales slipped 3.5% to $2.798 billion.

Same store sales, as well, were disappointing, rising only 0.4% against a Refinitiv forecast of 1.7%.

Looking into the coming financial year, Dollar Tree said it sees full-year sales in the region of $24.2 billion to $24.66 billion, and earnings of between $4.80 to $5.15 per share..

Dollar Tree Q4 Earnings graphic

"For the fourth quarter, despite the compressed holiday shopping season, we delivered positive comps for the enterprise, while managing margins and costs effectively to achieve adjusted earnings per share near the top of our guidance range,” said CEO Gary Philbin. “Our support functions are now working together in one location under one leadership team; which we expect will build greater collaboration, efficiencies and teamwork to enable us to support Dollar Tree and Family Dollar stores more effectively. Fiscal 2019 was a very important year for our organization to further develop the foundation to grow and improve our business.”  

Dollar Tree shares were marked 2% lower in early trading  following the earnings release to change hand at $80.10 each, a move that extends the stock's six-month decline to around 23.7%.