Dollar Tree misses in Q4 despite sales boost from Family Dollar

Dollar Tree on Tuesday credited sales at its Family Dollar division as helping to boost the company’s overall results for the fourth quarter. But the increase still fell short of analysts expectations.



Sales for the quarter ended Jan. 30 totaled $5.37 billion, a 116.7% increase from the year-ago period but still less than expected. The boost in revenue was the result of $2.68 billion in sales from the Family Dollar segment.



Dollar Tree’s net income for the quarter was $229 million, compared with $206.6 million last year. Its results were below Wall Street estimates, hurt mainly by the lower-margin product mix at Family Dollar stores and markdowns related to the rebranding of some stores.



“Through a challenging economic environment, we delivered sales of $5.37 billion, which was the mid-point of our fourth quarter guidance range, and our 32nd consecutive quarter of positive same-store sales," said Bob Sasser, CEO. "This was against a strong 5.6% comp from the prior year’s fourth quarter. Additionally, while not included in our comp calculation, for the second consecutive quarter, our Family Dollar banner delivered positive same-store sales increases each month during the quarter.”



Sasser noted that company remains on schedule with the integration of its two companies, “and we are on track to achieve our stated synergy targets.”



During the quarter, the company opened 128 stores, expanded or relocated 53 stores, closed 28 stores and divested of 325 Family Dollar stores.



Additionally, as part of its re-banner initiative, the company opened 58 former Family Dollar store locations as new Dollar Tree stores during the quarter. The company also converted 52 Deals stores to Dollar Tree stores in January. Retail selling square footage at the end of the quarter was approximately 108.4 million sq. ft.