Dollar Tree Inc (DLTR) - Get Report posted stronger-than-expected third quarter earnings Tuesday but noted that coronavirus uncertainty, as well as a lack of visibility on government stimulus, continues to cloud its near-term profit guidance.
Dollar Tree said diluted earnings for the three months ending on November 2 came in at $1.39 per share, up 28.7% from the same period last year and 23 cents ahead of the Street consensus forecast. Group revenues, Dollar Tree said, rose 7.5% to $6.18 billion, fractionally ahead of analysts' estimates.
Same store sales rose by a better-than-expected 4%, Dollar Tree said, with comparable sales at Family Dollar rising 6.4%.
Looking into the final months of the year, Dollar Tree said the "continued volatility and uncertainty related to the COVID-19 pandemic, as well as a lack of visibility into government stimulus initiatives" prevented the group from issuing holiday quarter profit guidance.
“I am incredibly proud of our team’s efforts to continue serving customers effectively, while driving operational improvements in both banners through this dynamic retail environment,” said CEO Mike Witynski. “Dollar Tree delivered its strongest same-store sales performance in the past ten quarters, along with a 50 basis point improvement in operating margin."
"At Family Dollar, the improvement continues as the team delivered a 6.4% comparable store sales increase, a 230 basis point improvement in gross profit margin and a 250 basis point improvement in operating margin,” he added.
Dollar Tree shares were marked 11.2% higher in pre-market trading immediately following the earnings release to indicate an opening bell price of $118.53 each, extending their six-month gain to around 40%.