Dollar Tree keeps growth streak going
Dollar Tree is proving once again that its brick and mortar value proposition is still attracting scores of shoppers.
The discounter reported a boost in same store sales and profit for the fourth quarter.
The company continues to appeal to shoppers by putting the right product in front of potential customers based on an area's economics and demographics, a strategy that has so far insulated it from online competitors. At a time when many retailers are contracting, Dollar Tree opened more than 600 new stores in 2017.
For the period ended Feb. 3, same store sales at Dollar Tree rose 2.4%. Net income rose to $1.04 billion, or $4.37 per share, from $321.8 million, or $1.36 per share, a year earlier. Net sales rose to $6.36 billion from $5.64 billion.
"I am proud of our team's performance in the fourth quarter and our results for 2017," stated Gary Philbin, President and Chief Executive Officer. "For the quarter, we posted positive same-store sales in our Dollar Tree and Family Dollar banners, while improving gross margin and leveraging costs. For the year, we opened 603 new stores, exceeded $22 billion in sales and improved our operating margin by 80 basis points. I would like to thank each of our associates for their dedicated work and continued efforts throughout the year to deliver value, convenience and our brand standards to our customers every day."
The Chesapeake, Va.-based company recorded a tax benefit of $583.7 million in the latest quarter due to changes in the U.S. tax code.
As a results of the savings from the new tax law, the company plans to invest $100 million over the next year on:
- Employee training
- Employee raises
- Improved retirement benefits
- And adding paid maternity leave for eligible associates
Dollar Tree said it expects net sales for the first quarter of 2018 to range from $5.53 billion to $5.63 billion, based on a low single-digit increase in same-store sales. It expects profit in the range of $1.18 to $1.25 per share.
Philbin added: "I am excited about entering a new year with significant opportunities ahead for our business. We are gaining traction from the work that has been done over the past several years and, with solid execution, we are confident we can build on our momentum to grow and improve our business. At the same time, we intend to continue focusing on delivering great values and convenience to our shoppers, while improving our operating performance and returning value to our shareholders for the long-term."
Dollar Tree operates 14,835 stores across 48 states and five Canadian provinces.