Another Amazon-proof discounter

Gina Acosta
Executive Editor
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The company recently celebrated the opening of its 15,000th store and 23rd distribution center.

Dollar Tree is working toward a future well beyond 15,000 stores after reporting an impressive quarter of same store sales and profit increases.

The company recently celebrated the opening of its 15,000th store and 23rd distribution center.

Discounters such as Dollar Tree and others have been faring well in the Amazon age, since the dollar store experience can't really be replicated online. At least not yet anyway.

“I am proud of our team’s accomplishments in the second quarter. In addition to posting earnings near the top end of our guidance range, our Dollar Tree banner delivered increases in both traffic and ticket, and our Family Dollar banner’s same-store sales were flat compared to last year’s 1% increase. Importantly, Family Dollar’s consumables business was positive for the seventh consecutive quarter,” stated Gary Philbin, President and Chief Executive Officer. 

For the second quarter ended Aug. 4, Dollar Tree earnings rose 16% to $1.15 a share. Sales grew 4.7% to 5.526 billion. Same-store sales rose 1.8%, with Dollar Tree comps up 3.7% and Family Dollar comps flat.

Gross profit increased 2.2% to $1.66 billion in the quarter compared to $1.63 billion in the prior year’s second quarter. As a percent of sales, gross margin decreased to 30.1% compared to 30.8% in the prior year. The 70 basis point decline was driven primarily by higher domestic freight, shrink and distribution costs, partially offset by lower merchandise costs.

Net income compared to the prior year's second quarter increased $40.1 million to $273.9 million and diluted earnings per share increased 17.3% to $1.15 compared to $0.98 in the prior year’s quarter.

During the quarter, the company opened 146 stores, expanded or relocated 13 stores, and closed 26 stores. Retail selling square footage at quarter end was approximately 118.5 million square feet.

Dollar Tree operated 15,073 stores across 48 states and five Canadian provinces as of Aug. 4.