Dollar Tree, Inc. Reports Results For The Third Quarter Fiscal 2016

Dollar Tree, Inc. (NASDAQ: DLTR), North America's leading operator of discount variety stores, today reported results for its third fiscal quarter ended October 29, 2016. For the quarter, the Company earned $171.6 million, or $0.72 per diluted share.

Bob Sasser, Chief Executive Officer, stated, "I am proud of our team's achievements in our third quarter. Our results demonstrated a solid performance in our Dollar Tree segment, continued meaningful progress in our integration of Family Dollar, and our ability to refinance and pre-pay a portion of our outstanding debt in order to reduce future interest costs. After adding back $0.09 per share of expenses related to our debt refinancing, our operating performance of $0.81 per diluted share was near the top end of our third quarter EPS guidance range of $0.76 to $0.82."

Third Quarter Results

Net sales increased 1.1% to $5.00 billion from $4.95 billion in the prior year's third quarter. The prior year's quarter included sales from 325 Family Dollar stores that were divested following the third quarter of 2015. Same-store sales increased 1.7%, on a constant currency basis, compared to a 2.1% increase in the prior-year period. Adjusted for the impact of Canadian currency fluctuations, the same-store sales increase was 1.8%. The same-store sales growth, representing the Company's 35 th consecutive quarter of positive same-store sales, was driven by increases in comparable customer count and average ticket.

Gross profit increased 8.6% to $1.52 billion in the quarter compared to $1.40 billion in the prior year's third quarter. As a percent of sales, gross margin increased to 30.4% compared to 28.3% in the prior year. The improvement was driven primarily by lower merchandise and freight costs. The prior year's third quarter included $13.0 million of markdown expense for Family Dollar related to product assortment rationalization and planned liquidations, and $38.4 million for Family Dollar related to the amortization of the stepped-up inventory basis.

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