Dollar Tree Tightens FY23 EPS Outlook Range; Increases Sales Outlook Range

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Dollar Tree, Inc. (DLTR) said the company is bringing in the high and low end of its fiscal 2023 outlook range for EPS to better reflect the balance of opportunities and risks in the current operating environment. EPS is expected to range from $5.78 to $6.08, including the $0.12 charge for the legal reserve taken in the first quarter and the impact of the 53rd week. Consolidated net sales are now expected to range from $30.6 billion to $30.9 billion. The company expects to deliver a mid-single-digit comparable store sales increase for the year, comprised of a mid-single-digit increase in the Dollar Tree segment and a mid-single-digit increase in the Family Dollar segment.

For the third quarter, the company expects consolidated net sales to range from $7.3 billion to $7.5 billion, based on a mid-single-digit increase in same-store sales for the enterprise, and for the Dollar Tree and Family Dollar segments. EPS is estimated to be in the range of $0.94 to $1.04.

Second-quarter earnings came in at $200.4 million, or $0.91 per share compared with $359.9 million, or $1.60 per share, a year ago. Adjusted earnings per share was $0.91 compared to $1.60. Analysts on average had expected the company to earn $0.87 per share, according to figures compiled by Thomson Reuters. Analysts’ estimates typically exclude special items. Gross profit increased 0.5% to $2.13 billion.

Second-quarter consolidated net sales increased 8.2% to $7.32 billion. Total revenue increased to $7.33 billion from $6.77 billion. Analysts on average had estimated $7.18 billion in revenue.

Enterprise same-store sales increased 6.9%. Dollar Tree same-store sales increased 7.8%, driven by a 9.6% increase in traffic, partially offset by a 1.6% decline in average ticket. The company noted that Family Dollar’s 5.8% same-store sales increase was comprised of a 3.4% increase in traffic along with a 2.3% increase in average ticket.

“We are pleased with the progress of our transformation to date and remain confident in our ability to deliver our growth objective of $10 or more of EPS by 2026,” said Jeff Davis, CFO.

Shares of Dollar Tree are down 3% in pre-market trade on Thursday.

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